We have a clear understanding of our customers’ needs
“Russia obviously intrigues in many ways with its great geography, its strong industrial base and its fantastic people”, said Mats Friberg, Director General of 3M Russia and the CIS, in an exclusive interview with Capital Ideas.
Mr. Friberg, today it is uncommon to hear good news from the business sector. Economic reports more often contain such threating words as “crisis”, “recession”, “slowdown”… However, it does not seem to apply to the activities of 3M Company in Russia. Anyway, last year the company achieved great success. So, what is the secret of your success?
I think fundamentally success starts with having good people in our team that have a clear understanding of our customers’ needs and solutions we offer to solve their problems. Our team is obviously a result of a long-term strategy aimed at empowering, training and developing organization, and it really pays off.
Secondly, we have been able to identify the growth spots on the market and adjusted our product portfolio in order to fill those areas.
Of course, this is not something that can be done overnight, this is rather a delivered strategy, careful analysis and a really good execution that finally enabled us to grow.
We as everyone else see obvious areas which are more difficult for us to be successful in, where either competition is very, very strong, or other limitations in the market that do not enable us to be successful.
So it is also around prioritization and putting the resources and the focus into something that you believe in, that you would have a chance to win.
Foreign companies operating in Russia only dream of localizing their production. For 3M Company this is not a dream, but a reality. Your enterprises are located in Volokolamsk (Moscow region) and Tatarstan. Could you tell us when the company first thought about the localization process in Russia? Why have you made such decision? How was the process?
Our local manufacturing is a very important component in our presence in the market place, and this decision was made in the early 2000s to make really a serious investment in Russia and start to produce key platforms for this market. And we have been able to scale it out almost year-on-year. This year actually we are investing an additional 6,5 mln dollars into Volokolamsk facilities to increase manufacturing capacities for breathing protection.
The reality is that in a company with such a wide portfolio as ours, we need to be thoughtful about how we can serve our customers particularly in the strategic product lines as we have in Alabuga and in Volokolamsk, really make sure we are as close to customers as possible.
And there is absolutely no secret that the product families that we have and are producing locally are also strategic market products for us and is really a large portion of our financial success in Russia.
We obviously have manufacturing plants in many, many countries around the world, and we have an internal, good process to support us in building out manufacturing capacity in any place around the world. But in the case of Russia I would like to mention the great support that we had from the government and from Republic Tatarstan particularly. It gave us confidence that we should do this and it enables us to be more long-term in our project as well.
One of the great advantages of having a local manufacturing and local R&D is that you can tailor your local portfolio more to the specific needs in a country like ours.
We came together with our customers, develop products for their specific purposes and that clearly also helps us to build intimacy and relevance for our most important customers.
Russia is very familiar to you. You have studied Russian in St. Petersburg. In 1996, you started here your professional career. In your opinion, what are the peculiarities of doing business in Russia?
Personally, I think that all of the countries of Central East Europe are more fascinating and interesting to do business in.
Russia obviously represents that a lot. The dynamic here is much higher, your opportunities in many ways are still untapped and in general I would say the willingness to think new and the willingness to challenge traditional ways is higher.
And in a company like 3M this type of country are often also investment areas. And personally I find that much more fun to try to develop business than to maintain positions in a market place that we are often forced to, such as in Western Europe.
Russia obviously intrigues in many ways with its great geography, its strong industrial base and its fantastic people.
And having privilege of being part of this country just a little bit is surely something I enjoy a lot. Trying with my experiences to guide 3M organization to try to improve every life, advance every company, enhance every home with our products.
What advice could you give to foreign companies wishing to enter the Russian market, but fearing to do it for some reasons? For example, some are still afraid of the Russian mafia, the other fear Russian bureaucracy, the third say about mysterious Russian soul… What would you say to them?
I have experienced very little of Russian bureaucracy. There is a bureaucracy in Russia, there are ways that the Russian government would like to guide and making sure that companies present in the market place here follow. It might be seen as a complex for a non-Russian, but if you make sure you have a good team around you, you’ll be able to navigate that without any bigger difficulties.
When it comes to the Russian mafia I don’t know to what extend it still exists today as I have heard nothing about it. And then the Russian soul is one of the really interesting parts. Having an opportunity as a foreigner to get to know closer the Russian people and their habits and the ways they are doing things is just exciting to me.
To be serious Russia in my mind is a very stable country. And there are pretty clear game rules, the predictability is probably higher than in many other countries in the Central East Europe region.
Tell us how you live in Moscow. Do not you get bored? How and where do you spend your free time?
It is really fascinating, particularly if you are as I, interested in culture, art, music scenes, theatre. If somebody asks me, I would say Moscow is probably in top 5 cities in the world to live in. Tremendously rich when it comes to influences from both Russia and the world. I for one tried to dive into this culture metropolis. If you don’t find me in the museum or ballet theatre, you will probably find me out on the street walking, I spend a lot of my free time on the weekends walking around in Moscow, exploring areas that I never seen before.