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Sakhalin boom attracts white goods firm |
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By Vanora Bennett Boris Postovalov is heading where the money is: east. His Vladivostok-based business manufacturing and selling washing machines, fridges and TVs is already one of the leading suppliers of consumer electronics and white goods in the Russian Far East. Now he plans to use his €7.5 million loan from the EBRD to open more stores in the Europe-sized chunk of Russia he’s made his own. One of his next stops will be Sakhalin Island. This remote Pacific Ocean territory an hour’s flight north and east of Vladivostok was once home to the Tsar’s prisoners. Then oil and gas were discovered. Now its biggest city, Yuzhno-Sakhalinsk, is a boom town, a bustling mix of men in checked shirts and cowboy boots from Shell and Exxon and bewildered locals wondering how to find a new niche in their fast-changing domestic economy. Mr Postovalov’s company, V-Laser, already has two stores in Yuzhno-Sakhalinsk. And business is so brisk there that he’s building a third. “Sakhalin is on the threshold of a breakthrough,” Mr Postovalov said, relaxing after signing his deal at the EBRD headquarters in London. “The oil and gas on Sakhalin means high pay levels and high employment – which in turn means that workers can buy more. So we do good business there. The downside,” he added ruefully, “is that labour costs a lot there, too – there’s so much competition for staff that you have to pay one and a half times more than anywhere else in the Far East.” “We’ve been working on Sakhalin since 1997,” he added. “We opened a small shop there first, to see how things turned out; that’s what we always do when we move into a new region. We only opened the first big store this year. But it’s gone well -- well enough to justify a third store.” Stimulating competition Building V-Laser’s presence on Sakhalin is only one element in Mr Postovalov’s strategy for V-Laser. The six-year loan will be used to build four modern retail outlets, mainly catering to low to middle income families in the Far East, focussing on the mainland Khabarovsk region north of Vladivostok. The project is expected to help stimulate competition in the sector as well as set new industry standards by introducing best international practice, particularly in terms of corporate governance, to this regional market. Additional knock-on effects are due to include improving distribution networks in a remote region of Russia and promoting international trade links. In 12 years, Mr Postavalov has built his business from nothing into a thriving concern. The company employs more than 2,500 people and assembles goods for leading Asian manufacturers under licence as well as producing under its own brand, repairing white goods, and selling them from an ever-expanding chain of stores stretching from Irkutsk in the west to Sakhalin in the east and Yakutia in the north to Vladivostok in the south. He ticks off his business principles on the fingers of one hand. “I’ve always observed a few simple rules. Keep out of the clutches of criminals. And be prompt, efficient and honest in your dealings with government, but don’t get too close to the authorities.” Hard decision, good decision Mr Postovalov’s success began more than a decade ago, when the Soviet Union collapsed and he decided to get out of the naval engineering firm he worked for and go it alone. “After perestroika and the economic collapse that followed, I had a strong feeling that I should get out and do something by myself,” the ex-captain says now. “It was the hardest but the best decision I ever made.” Mr Postovalov didn’t have much to build a new life with – “no capital, no flat, no car,” – he recalls ruefully. After having been respected as Russia’s youngest naval captain, it sometimes grated to be patronisingly called “ty” – the Russian word for “you” when addressing children, intimates or inferiors. All he had was a supportive wife and family and a knack with electrical goods. But he turned them to good account. His first venture was assembling and installing his own burglar alarms. When components stopped coming from the no-longer-Soviet Baltic states, he moved on to trading in the TVs, fridges and radios he’d always loved to take apart and compare. It was profitable. But he wanted more. He wanted to produce goods, too. Less than a decade ago, when his white-goods trading business was already thriving, Boris Postovalov bought a factory. The Rodina factory near his home town of Urussiisk, 100 km outside the Far Eastern port of Vladivostok, had been privatised and its new owners were selling. The Korean firm LG supplied him with equipment. Mr Postovalov’s firm, V-laser, gradually became both an assembler of LG goods and the region’s official dealer. South Korean firms are V-Laser’s biggest foreign partners, even though the Russian Far East is only over the water from Japan. “Traditionally Japanese firms have been more popular but Korean firms are gradually squeezing them out and occupying a bigger share of market. In the TV market especially, the Koreans now have three times the stake of the Japanese,” he says. “The Japanese are not brave when it comes to working in Russia; they’re seen as more rigid than the Koreans.” “Samsung is the Korean company with the biggest presence in Russia,” he adds, and grins. “And in our region, it’s LG – thanks to us.” Vanora Bennett is an EBRD Press Officer.
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24 January 2006 |
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