46% of exports to Russia are generated by indigenous Irish businesses – Minister Perry
·Russia is now the ninth most important international export market for Enterprise Ireland companies
·Irish companies have excelled in exports to Russia, showing export increases of 19% in 2012 compared to 2011 and a 64% increase compared to 2010
·Ireland-Russia Joint Economic Commission relationship forms the backbone of Enterprise Ireland’s market strategy for Russia for the next 3 years
Your Excellency Ambassador Peshkov, ladies and gentlemen, members of the Irish Russian Business Association, a Cairde, welcome to this Russia Business Forum here at Enterprise Ireland’s international headquarters, East Point.
It’s a pleasure to be here with you to see so many representatives of Irish business with an interest in, or curiosity about, Russia, as well as those representing Russian business in Ireland.
I wish to thank John Whelan of the Irish Exporters Association, Constantine Gurdgiev and Jennifer Condon of the Irish Russian Business Association, Gerard MacCarthy of Enterprise Ireland’s Russia and CIS office, and the Commercial Department of the Embassy in Moscow, and Kate Kostyunina of the Enterprise Ireland’s High Growth Markets division for their efforts in organising this event.
It is, given the numbers in attendance, a testimony to the potential of the Russian market for Irish businesses, a market which we expect to contribute significantly to the Government’s strategic objective of supporting, through Enterprise Ireland, indigenous Irish companies to deliver 60,000 new jobs and €17 billion exports by 2015.
In my capacity as Minister for Small Business, events like this are of special importance. Many small businesses, by their very nature, can only focus on the domestic market. However, for many others, overseas markets offer an aspiration goal a target to aim for once local stability has been secured.
That goal in relation to Russia has been defined clearly over the past number of years. In terms of exports to Russia, Irish companies have excelled showing export increases of 19% in 2012 compared to 2011, and a 64% increase compared to 2010.
Russia is now the ninth most important international export market for Enterprise Ireland companies.
Most significantly, 46% of these exports are generated by indigenous Irish businesses - Enterprise Ireland client companies – Irish owned, with an Irish work force. Typically in other markets, this figure is around 10%.
We are confident these figures can grow, as more Irish companies explore the Russian market. But for this to happen, we need many more companies to look at Russia and include it in their development strategies. And we need to support Irish companies, already active in the Russian market, to further develop sales and exports contacts and strengthen their relationships with key partners, increasing market awareness of Ireland, of Irish excellence and the uniqueness of what we can offer to Russia.
The developing bond is reflected in the Ireland-Russia Joint Economic Commission process, formally underway following the signature of a ‘Declaration for Partnership in Modernisation’ by An Tánaiste, and Minister Lavrov in November 2011.
We now have a very solid, and very promising government to government platform, in five sectors; Education and training, aviation and transport, agriculture and food, ICT and high technology, and energy/renewable energy/sustainability. That will be yet again consolidated, in the visit of the JEC Chair from Russia, Maxim Travnikov at the end of June and the full 9th JEC Session in Dublin later this year. An Enterprise Ireland Aviation and Transport trade mission to Moscow will also be lead by Minister for Transport, Tourism and Sport, Leo Varadkar, in October, reinforcing the government’s commitment to the market.
The JEC relationship forms the backbone of Enterprise Ireland’s market strategy for Russia for the next 3 years, in the belief that it can build on the already strong business to business activity reflected in the trade results and the strong person to person connection that lies behind those figures.
The JEC, from our side, acts as a vital door opener on all levels, while also allowing us share with our Russian colleagues, our development experience, as a country of innovation and technological excellence.
The spirit of the JEC is to offer not just products or services, but to seek mutually beneficial solutions, as both sides face up to the challenges of – in Russia’s case, modernisation and in our case, economic rejuvenation.
On an objective level, Russia is a world economy on the up. It demonstrates the highest per capita GDP of the BRICS at $17,700; it has the second largest currency reserves ($500 billion excluding gold) and lowest level of debt. Per capita foreign direct investment, bolstering local growth and stability, is twice that of Brazil, five times greater than in China, and 14 times greater than in India. This accounted for an estimated $31.3 billion in 2012.
Russia is the second largest retail market in Europe, and soon will be the largest auto market. Current estimates indicate that Russia’s GDP will overtake that of Germany, between 2018 and 2020. These indicators point confidently towards a market of great potential.
Russia is far closer to Ireland than many of us think. It is geographically the closest of the BRICS. Moscow is just over half the distance from Dublin than New York is. But it is also possibly the closest to us culturally and socially.
The Russian people may speak a different language yet, once that barrier is removed - and many Irish people will confirm this – they share many of the sensibilities that set us apart from so many other nations.
Irish companies – companies with proven track records and a clear international export strategy – can, with the help of Enterprise Ireland, offer to Russia niche, world-class business solutions, products and services.
The fact that many Irish companies are small and medium in size, can be seen as a distinct advantage, as they can adapt and respond quickly to changing market forces and match very closely particular customer requirements.
Enterprise Ireland’s Moscow office, headed by Gerard, with 24 years of experience in Russia, is there as a first contact point, support office and conduit to the right partners for anyone entering the market.
At home, the availability of a skilled, flexible English-speaking labour force, our pro-business environment and innovative and entrepreneurial spirit, makes Ireland uniquely positioned to meet international market requirements.
But Ireland, as it becomes more and more diversified, also has a very significant Russian-speaking population, whose talents and local knowledge can be invaluable, specifically when trading with the Russian market, making Ireland even more of a natural match for dealing with Russia.
The presence of so many Russians in Ireland is being viewed by Irish people as a very positive development and once again, reflects the cultural and social similarity between our peoples.
There are barriers and challenges to doing business with Russia. These include:
· the lack of direct flights between Russia and Ireland, (a solution for which is being sought by the Embassy of Ireland, DAA, and Enterprise Ireland);
· time-consuming and bureaucratic visa application processes;
· negative perceptions of Russia’s distance and coldness (the ‘Psychological Iron Curtain’ as Gerard has labelled it);
· low awareness of Ireland in Russia (confusion with Iceland, Greenland, Holland, Scotland);
· and intense competition from Europe and Asia.
All of these elements are being constantly worked on by our Embassy and our Agencies in Russia, in collaboration with their Russian counterparts.
We have done much within the Irish Government to eradicate these barriers, including the introduction of a very flexible visa system for Russians which, as well as a visa waiver programme, recognising validated UK visas for entry to Ireland, also sees one, two and three year multiple visas being issued to all, but exceptional business and tourist visa applicants to Ireland, by the Visa Department in Moscow.
There is committed, proactive business support through the activities of Enterprise Ireland, the Embassy and the Irish Trade and Investment agencies reinforcing Ireland’s commitment to working with Russia at Government, Business to Business and individual levels.
We are vigilantly conscious, that continued improvements to our systems and regulations are required, to ensure that Ireland remains a very competitive, efficient and important trading partner for Russia. Not just a partner, but also a friend!
I would finish by again thanking Enterprise Ireland, the IEA, IRBA, Russian Embassy and all of you for attending today’s event.
If there is strength in numbers, then based on the evidence of today’s turn-out, the Ireland-Russia relationship, seems very strong indeed.
Thank you.
ENDS