spring
2006
QUARTERLY NEWSLETTEROF THE CANADA EURASIA RUSSIA BUSINESS ASSOCIATION
5TH ANNUAL CHARITY
AUCTION
Trade Missionto TyumenRussia’s Forestry Sector:Growing Opportunities by EDC
People are the key to your success
in Russia by Antal
New member profile: CEMBA (Certificate Executive MBA)
Courtyard byMarriott Moscow City Center: New CERBA partner
Canada Eurasia Russia Business Association (CERBA)Association d'affaires Canada Russie Eurasie (ACCRE)Канадская деловая ассоциация в России и Евразии (КДАРЕ)www.cerbanet.org
CERBA Offices International:MOSCOW CHAPTERElena Settles � Regional DirectorTel: 7 (495) 230�6132Fax: 7 (495) 787�2701E�mail: [email protected] CHAPTERFrank Kense � Regional DirectorTel: 1 (403) 218�4164Fax: 1 (403) 218�8727E�mail: [email protected] TORONTO CHAPTEROksana Ermolenko � Regional DirectorTel: 1 (416) 946�0024Fax: 1 (416) 352�5183E�mail: [email protected] MONTREAL CHAPTERBrendan Scully � Regional DirectorTel: 1 (514) 344�3347Fax: 1 (514) 371�4605E�mail: [email protected]
CERBA Boards of Directors:National Board of DirectorsChairmanDonald Whalen, High River Gold MinesDirectorsPiers Cumberlege, StraightviewPaul Drager, Macleod Dixon LLPNathan Hunt, Ronald A. Chisholm InternationalMoscow Board of DirectorsPresidentNathan Hunt, Ronald A. Chisholm InternationalDirectorsAnatoly Andriash, Macleod Dixon LLPSheldon Bennett, Ernst & YoungIan Bird, Golden Telecom, Inc.Andrew Ivanyi, Aerostar HotelJohn Kur, Embassy of CanadaRon Lewin, TerraLink TechnologiesRene Marion, Barrick Gold CorporationIan McColl, Hatch AssociatesCarol Patterson, Baker & McKenzie Neil Withers, Bank VozrozhdeniyeCalgary Board of DirectorsChairmanJim Chernyk � Foremost IndustriesVice ChairmenHans Gjerdrum � KUDU Industries Inc.; Paul Drager � Macleod Dixon LLPDirectorsLinda Niro � Export Development CanadaRichard Donaghy � CIBCRandy McCord � Schenker Steines LogisticsKurt Kennedy � IMV ProjectsToronto Executive CommitteeChairmanDonald Whalen, High River Gold MinesBoard of DirectorsFrank Herbert � Centerra Gold CorporationPeter Antonoff � Aluma SystemsBoris Aryev � Marhope SystemsDmitri Buterin � BonasourceRuth Fothergill � Export Development CanadaPiers Cumberlege � StraightviewJohn Ivany � Kinross Gold CorporationSteven C. Nichols � Canadian Urban InstituteAlina Pekarsky � York University, Schulich School of BusinessPeter Solomon � University of TorontoSergei Timoshenko � Access AirMontreal Local BoardChairmanRon Denom � SNC� Lavalin International DirectorsPiers Cumberlege � StraightviewAnne Leahy � Foreign Affairs CanadaAlexander Lokshin � Dana & Co. Trading Inc.Edouard Namts � WE Consulting Inc.Jocelyn Neron � Quebec Ministere of Economic and RegionalDevelopmentElise Paul�Hus � McMillan Binch Mendelsohn (Law Partners)Jo�Ann Roux � International Trade Canada
CERBA News Editors: Elena Settles and Alex GrichineCERBA News Publisher and Layout: Troy MediaCover Photo: Baikal�Lena State Nature Reserve.Courtesy of Michail Stepanzov
Page 2Looking Back � Past CERBA Events
Page 3People are the Key to your Success in Russia by Antal
Page 4�5Charity Auction 2006
Page 6�7Tyumen Trade Mission Possible
Page 8�9Russia's Forestry Sector:Growing Opportunities by EDC
Page 10Courtyard by Marriott Moscow City Center:New CERBA partner
Page 11New member profile:CEMBA (Certificate Executive MBA)
01
CERBA Quarterly News (spring 2006)
In This Issue:
Nortel reception at the Canadian Ambassador'sResidence. From left: Canadian Ambassador in RFChristopher Westdal, CERBA Moscow RegionalDirector Elena Settles, Nortel CEO Mike Zafirovski,and CERBA Moscow President Nathan Hunt
Moscow
CERBA Moscow chapter held its 5thAnnual Charity Auction with VladislavTretiak on January 25th. This eventwas a great success raising moremoney than any previous auctions.Please read the full story in this issue.
On February 14th CERBA organized aReal Estate Breakfast Brief with repre�sentatives of Noble Gibbons/CBRE.The speakers were Michael Packham,Associate Director; Jeff Kershaw,Director of Retail; Darrell Stanafordand David Brodersen, Co�ManagingDirectors of the company. The eventwas very highly rated by over 30attendees as it provided extremelyuseful and up�to�date information onthe Moscow commercial real estatemarket. The specific topics coveredduring presentations included a gen�eral overview of the office market inMoscow, talking about warehousespace, investment opportunities andpotential, valuation, project manage�ment, and others. These topics are ofgreat interest to foreign companiesworking in Russia, and suggestionswere made to CERBA to hold anotherevent focusing on real estate.
On February 21, 2006 CERBA jointlywith Russo�British Chamber ofCommerce (RBCC) held a networkingreception at the Katerina�City Hotel inMoscow. Guests of honor includedMr. Anthony Brenton, HMAmbassador of the UK to Russia, Mr.Christopher Westdal, Ambassador ofCanada to Russia, and Mr. IanPearson, British Minister for Trade.The event was kindly sponsored byDeloitte and Pepeliaev, Goltsblat &Partners. The honorary guestsaddressed the public; the livelyspeech by Ambassador Westdal whospoke to the peculiarities of theCanadian�British cultural relation�ships was very well received. The restof the evening was devoted to the
social interaction and networkingamong over 180 attendees.According to the feedback receivedfrom CERBA members, as well asfrom RBCC members, this was a high�ly effective networking event. Thelong history of friendship and collabo�ration between CERBA and RBCC are,thus, bringing outstanding benefits toboth associations, and will undoubt�edly result in many joint initiatives inthe future.
Another important highlight of thespring was Trade Mission to Tyumenon March 19�23, which focused pri�marily on oil and gas industry andservice as well as geophysical explo�ration, machinery, and equipment.Please read full story on this event inthis issue.
In preparation to the upcomingBusiness Development Mission to theRussian Far East visiting Magadanand Khabarovsk (May 28�June 3,2006), the Moscow chapter held aBreakfast Brief on March 28 at theNovotel. The event is organized jointlyby CERBA and Club France. Thisevent gathered over 30 people, whoprovided an attentive audience for theregion presentations by Mr. YuriZasko, The Assistant to the Governorof Magadan Region and Mr. ValeryBeliaev, Deputy Head of KhabarovskTerritory representation in Moscow.The trade mission will focus primarilyon the mining, construction, forestry,food industry, and tourism sectors inthese regions, which enjoy the statusof Special Economic Zones of Russia.
Two social events took place in April.The traditional Easter Brunch, whichwas held on Sunday, April 16th at theMarriott Grand Hotel, brought togeth�er families and friends of CERBAmembers. On April 26th CERBA held aWine Tasting Reception at the newvenue Courtyard by Marriott MoscowCity Center. Members of the
Association of European Businesseswere invited to join CERBA partici�pants at the official "Wine & RiedelGlasses" ceremony hosted by DmitryPinsky of DP Trade wine importer.Close to sixty people enjoyed a fineselection of wines and a fascinatingdemonstration of the profound effectthe wine glasses have upon the tasteand aroma of the different wines. Theguests were very content with theevent and the new venue; many peo�ple stayed at the Terraneo restaurantfor the dinner special generouslyoffered by the Hotel.
CERBA Quarterly News (spring 2006)
02
LOOKING BACKPast CERBA Events
WHO'S NEW AT CERBA!
CERBA is very happyto welcome FrankKense as the newRegional Director ofthe Calgary Chapterof CERBA, startingApril 1, 2006.Although born in theNetherlands, Frankgrew up in Montrealbefore moving toAlberta in 1975 to
complete his post� graduate studies inArchaeology at the University ofCalgary. He was fortunate enough toundertake archaeological fieldresearch in Africa over several sea�sons, working in the Sudan, Ghanaand The Gambia. Frank has been asessional instructor at the Universitiesof Alberta and Calgary for over 20twenty years. Frank's other life careerhas been in association management,working with a number of non�profitassociations since 1986. He hasresided in Victoria, BC and Edmonton,Alberta since 1989. He is also current�ly developing a home base business inhealth and wellness. Frank is excitedabout joining the CERBA team and islooking forward to working with a busi�ness association as a change of pace.If you are ever passing throughCalgary, or have the good fortune tobe living there, please give him a call atthe CERBA office!
Dmitry Pinsky of DP Trade explainsthe peculiarities of the effect ofglasses on fine wine during WineTasting reception
From left: UK Ambassador Tony Brenton, RBCC Director Neil Cooper, andCanadian Ambassador Chris Westdal
03
CERBA Quarterly News (spring 2006)
Whether you have an established business in Russia orare currently planning to begin operations in what has
now become one of theworld's fastest growing,and most exciting markets,this no doubt involves hir�ing local nationals into yourorganisation.Myths and stereotypesaside, Russia remains anextremely challenging mar�ket as the lack of top candi�dates has become a realissue. There are severalindustries with candidategridlock caused by lack ofexperience; this is due tothe incredible growth indemand combined with alack of appropriate experi�ence. Retail grows at such
a rapid pace that the supply of mid�managers simplycan't keep pace; there are relatively few mid�seniorlevel managers who have quality "best practice" expe�rience. Rapidly expanding industries such as retailbanking, insurance, particularly life assurance, arehaving to resort to more established areas to recruitfrom i.e. we are being asked to move people fromFMCG sales roles into customer relationship manage�ment roles, and also move people from the regions toMoscow to fill the gap. We are also noticing more Moscow based profession�als taking the plunge and relocating to the regions totake up management roles with increased responsibil�ities. This moves their careers forward more quickly.Russia has always been associated with a low labourforce mobility; this remains the case however there arenow more opportunities as companies surge forwardinto the less saturated markets outside of Moscow.Another interesting feature of the global recruitmentmarket is that some companies are now searching forRussian Nationals to fill positions in locations asdiverse as South America, South Africa and Australia �Our technical team has run searches for RussianNational technical staff for all these locations in themining and Oil & Gas industries. There are still consid�erable cost savings and there is a supply of talent.As the market matures we have also seen a growingchallenge in managing expectations of candidates. It'snot necessarily their salary expectations but the speedwith which they believe their career can develop. Tenyears ago it was not uncommon to see a CV of a CFOwith just 3 � 5 years experience. This is virtuallyunheard of in Western Europe / USA. High calibre peo�ple were given real opportunities at a very early stagein their careers. This could not continue indefinitelyand job hunters are finding it difficult to come to termswith a slightly slower market where career progressionis more moderate (although still rapid compared tomore developed markets)There is still an impatience to move into a "manage�ment" role within a year of starting work. Over 75% ofour candidates quote management as a goal. Some
candidates even come to us straight from universityhaving studied "management" and want to be man�agers. They usually have little preparation and under�standing for the realities of working life and what man�agement actually means. Many cannot give an answerto the question "manage what?"Transparency is not only a buzz word in America, manycandidates are now demanding complete transparen�cy from their employers. Companies that propose"net" salaries with ingenious and black or grey pay�ment schemes are the dinosaurs of the recruitmentmarket. Top talent usually avoids them. Income tax isstill comparatively low here, the more you declare themore credibility you have with your bank if you need amortgage or other financial product. There is also aincreased awareness that it is a legal requirement(hitherto a mere inconvenience for many). On a moremacro level transparency and the Sarbanes Oxleyrequirements has led to increased demand for auditand control staff. Tax and other legislative changeshave also increased demand in the financial discipline.Many educational institutions are still lagging behind inproviding contemporary courses so some majoremployers have forged closer relationships with uni�versities and are assisting with content and workplacements. Training Centres and Industry universitiesare also a welcome feature now of Russian corporatelife. RPO � Recruitment Process Outsourcing has started inRussia, Antal has set up a team to promote the 3rdparty management of large�scale recruitment proj�ects. The essence is to reduce the cost per recruit bymore effectively managing various sources of candi�dates. Traditionally this means direct approaches, bet�ter utilisation of web tools, better "multiple source"agency management and recruiting from within. 2006will be another year of growth, challenges, opportuni�ties. Antal International is a British executive recruitmentcompany specialising in mid to senior level positionswith multinational companies, particularly in theemerging markets of Central & Eastern Europe,Russia/CIS & China. We have had a physical presence in Moscow for over12 years, recruiting largely within the energy and tech�nology sectors throughout Russia and CIS countries �our key strengths lie in our ability to work on cross�bor�der assignments, sharing knowledge, information andexperience for the benefit of our clients (every officeworks using the same methodology, and we have beensuccessful in recruiting Russian/CIS nationals who arecurrently based abroad, and bringing them backhome. This is particularly important, given the short�age of talent in Russia at the moment). Our size � over70 people in Russia � allows us to have consultantsfocusing on specific industry sectors, as well as coredisciplines. Additionally we have recently opened anoffice in Ekaterinburg to cover the needs of our clientsin the Urals region.For more information on how Antal International canhelp improve your business by bring top talent onboard for you, please contact Luc Jones, Partner at:[email protected] � +7 495 935 86 06.
People � they're the key toyour success in Russia/CIS!
Luc Jones, PartnerAntal International
On January 25th, 2006, CERBA held its 5th AnnualCharity Auction, which was organized by Moscowchapter in association with Vladislav TretiakFoundation and Canadian International Develop�ment Agency (CIDA).The 2006 Charity Auction has brought record suc�cess in both amount raised and attendance levels.The 2006 Charity Auction raised a total of CAD67,863 [$61,292 USD]! CERBA would like to expressits deepest gratitude to all those who sponsored,participated and assisted in making this event anunprecedented success. We owe a very specialthank�you to the largest auction sponsors: CIDA,Petro�Canada, Aktis�Story � Yevgeny Novikov, White& Case LLC, and Barrick Gold. CERBA is also verygrateful to Mr. Vyacheslav Albu of National TradeNetwork "Soyuzpromimpex" for his generous contri�butions and inspiring address at the event.CERBA already has an established tradition oforganizing charity auctions since 2002, which areconsidered to be very important and popular events
of the year. In past years, the visibility of the auctionhas been excellent and results were highly com�mendable. The first event, orga�nized by CERBA in2002, gathered over USD 5,000 to benefit theRonald McDonald House charity in Moscow. In2003, the Moscow Times ran a half�page article (inc�luding photos) detailing the event's achievements.That year, we gathered nearly USD 22,000 all ofwhich was dona�ted to the Mo�rozovski Children'sHospital in Moscow. The auction held in 2004 waseven more successful, raising USD 32,000, whichwas split between the Social Shelter for Children and
Teenagers "Dove�riye" and Child�ren's Hospital #2in Saratov. Neve�rtheless, the auc�tion held in 2005exceeded therecord of pastyears and raisedover USD 38,000.The money wasused to purchasem u c h � n e e d e dmedical and play�ground equip�ment for the Sa�ratov Children'sHospital #2 andthe Mezen Or�phanage in Ar�changelsk oblast.The attendanceat the 2006 Auction was extremely high � the finereception hall generously provided by the BaltschugKempinski hotel gathered 150 Canadian andRussian business and government representatives,press, and cultural activists. The presence of theCanadian Ambassador to Russia ChristopherWestdal and a number of the officials from theCanadian Embassy in Moscow raised the profile ofthis event. The personal appearance of the hockeylegend Vladislav Tretiak also added substantially tothe Auction's popularity among the public.The event created a warm atmosphere of interna�tional friendship and cooperation to help the worthycause. Baltschug Hotel kindly offered one of itsfinest banquet halls for the event and provided a verynice reception. It started with the official openingspeech by CERBA President Nathan Hunt andVladislav Tretiak's Assistant Vera Terekhova. Upongreeting the guests, the speakers provided a reporton the use of last year's charity donations, which wasaccompanied by the wholehearted applause fromthe audience. Canadian Ambassador ChristopherWestdal and State Duma Deputy Vladislav Tretiakalso welcomed the guests. During the event, the representatives of the benefici�ary organizations � Galina Zaitseva [SaratovChildren's hospital #2], Olga Kasayeva [SaamiCommunity Kildin] and Tamara Varyukhina [Special
CERBA Quarterly News (spring 2006)
04
CERBA 5th Annual Charity Auction
CIDACAD 15,154
Petro�CanadaCAD 5,560
Aktis�StroyCAD 5,560
White & Case LLCCAD 4,000
Barrick GoldCAD 2,220
Auction proceedsCAD 35,370
Saratov Children’s Hospital #2CAD 33,174
Special Olympic CommitteeCAD 7,382
Indigenous Saami Community KildinCAD 7,772
Saratov OrphanageCAD 7,715
Ronald McDonald House CharitiesCAD 5,551
Auction reception/organizing costCAD 6,270
Total Auctionproceeds:
CAD 67,863 [60,994 USD]
Olympics Committee] � made excellent presenta�tions of their respective organizations. Anna
Maximenko from one of the sponsors of the event,White & Case LLC, also addressed the public.The auction itself featured a fine selection of lots,including dinners with Canadian Ambassador andVladislav Tretiak, oil painting, fur jacket, RussianOlympic jacket, fine wine selection, hotel stays andspa treatment, jewelry item, Canadian maple syrupcollection, and an art book of poetry. CERBA wouldlike to thank everyone who generously donated thelots for this auction: Ambassador Westdal, VladislavTretiak, Ararat Park Hyatt, Fred Boyce, BaltschugHotel, Bosco di Ciliegi. Andrew Ivanyi, John Kur, RonLewin, Marriott Royal Aurora, Andrey Medvedev, IanMcColl, Santosh Mullapalli, NAFA and Alexey Sa�vishchev, Lou Naumovsky, Celia Verrier, and NeilWithers.Once the bidding was closed at the designated hour,another exciting part of the evening be�gan � the raf�fle lottery. The lottery was also very popular amongthe guests: a little girl was spinning the drum withraffle tickets and drawing winning numbers for theexpectant audience. We are also very thankful to theBritish Style, Holiday Inn, Nathan Hunt, McDonalds,McLeod Dixon, Marriott Royal Aurora, SantoshMullapalli, and Carol Patterson for kindly offering afine collection of excellent prizes, such as Tretiakhockey memorabilia, magazine subscription, finestspirits, gift certificates, and dinners. All participantswere greatly satisfied not only with being able to helpthe worthy cause but also with excellent networkingexperience at the event.Another creative innovation was brought into thisyear's Auction by its organizer, Elena Settles. For thefirst time the CERBA Charity Auction featured an
online component. Vladislav Tretiak provided per�sonally autographed hockey memorabilia for theOnline Charity Auction and Sale. Thus, CERBAmembers and friends residing outside of Moscowcould participate in both bidding for the lots and pur�chasing the items. This innovation proved to be verysuccessful adding several thousand dollars to theproceeds. The Auction proceeds were distributed among sev�eral beneficiaries. CIDA's funds [CAD 15,154] werechanneled to support the women entrepreneurs ofthe Indigenous Saami Community Kildin inMurmansk oblast [CAD 7,772] and Saratov regionalyouth organization of the disabled Special OlympicCommittee [CAD 7,382]. A large portion [CAD33,174] was transferred to the Saratov Children'shospital #2 for purchasing the special equipment tobe used in the neonatal intensive care unit for theprematurely born babies. Another $5,551 went toRonald McDonald House Charities to support theFamily Room Project. Finally, around CAD 7,715 wasused to help an orphanage in Saratov.In addition to the aforementioned people, CERBAwould like to express it special thanks to the organ�
izers of the event � Vera Terekhova, Elena Settles,and Alex Grichine.By all accounts, the 2006 auction was a greatachievement. Such outstanding success would nothave been possible without the wholehearted sup�port of this event received from CERBA membersand friends in Moscow. Thank you very much and weare looking forward to your help with our future char�ity initiatives to help those in need.
05
CERBA Quarterly News (spring 2006)
On March 19�23 CERBA Moscow chapter organized atrade mission to Tyumen region for a series of meet�ings with political and economic leaders of the region
and visits to thekey companies ofthe region. Themission proved tobe a great suc�cess and wasextremely usefulin providing adeeper under�standing of theregion's ecnomicposition and gov�ernmental sup�port for interna�tional coopera�tion. It also pro�vided insight into
the existing and potential opportunities for collabora�tion between Russian and Canadian businesses.The visit was focused on the oil and gas industry sincethese industries form Tyumen'sindustrial base. Tyumen region issimilar to the Alberta Province interms of economic structure andclimate conditions. TyumenOblast is the third largest regionin Russia, which covers 1.4 mil�lion square kilometers (554,000square miles) and comprises8.4% of the Russia's territory.Over 90 percent of Russia's gasdeposits and over 60 percent ofits oil deposits are located in theTyumen region. According toRussian reports, oil and gas pro�duction in the region accountsfor 7% of the country's GDP.There are great opportunities forCanadian companies in oil andgas, forestry, construction, andother sectors in this region. Oiland gas machinery and equip�ment building has in recent years begun its rapiddevelopment. There currently exists a heavy demandfor investment in new equipment and technology, aswell as the need to upgrade the oil and gas transporta�tion network. Major oil companies in the Oblast includethe internationally known TNK�BP JSC Tyumen,LUKoil, RUSIA Petroleum, Yukos, and OJSCSurgutneftegas. Other major companies in the regioninclude SIBUR�Tyumen, Tyumen Airlines, TyumenMotor Builders, Tyumen Peat Works, Tyumen StorageBattery Plant, Tyumen Timber, and Sibneftemash.Representatives from Canadian companies and gov�ernmental authorities took part in this visit. There were14 delegation members: Drury Mason, AssistantDeputy Minister, Alberta province; Greg Jardine, TeamLeader � Eastern Hemisphere, Energy Industries andServices; Jacob Kunzer, Commercial Counsellor of theCanadian Embassy in Moscow; Yuri Baidukov,Financial Director, Schlumberger; Barry Blacklock,Business Development�International, Petro�Bank;Renee Chernecki, Deputy Director, (SAIT); Leo Fox,
President and Alexandr Golyashov, Geophysicist fromPhoenix Geophysics ltd.; Michael Elinson, President &CEO Amelin Engineering; Olga Moseychuk, DeputyGeneral Director, Foremost; Andrei Orlov, Vice�President of Business Development, SNC�Lavalin;Jenny Varlamova, Arrow Com; and Nathan Hunt andElena Settles from CERBA Moscow.The regional and city administration were extremelyhelpful in organizing the meetings and showed theirhospitality in hosting the delegation. CERBA delega�tion was greeted at the airport upon arrival by theregional government representative and escorted tothe Tyumen Hotel, which provides the finest accom�modation in town. The next morning, a roundtable was organized by theregional administration with the representatives oflarge oil corporations in the Tyumen region as well asrepresentatives of companies specialized in oilfieldservice, including Schlumberger and Tyumen motorbuilders. Sergey Putmin, Director of IndustryDepartment, presided over the meeting. After CERBAcompanies made their presentations, the participantsdiscussed the prospects of collaboration between
Canadian and Tyumen compa�nies. The meeting was followedby lunch kindly hosted by theCanadian Embassy at the"Potaskuy" restaurant located ina historic wooden mansion of19th century.The afternoon was dedicated tovisiting Zapsibgasprom enter�prises, which turned out to be avery exciting, informative anduseful field trip. In the eveningsome of the guests exploredTyumen downtown in search ofnice restaurants, while othersreconnected with their existingbusiness contacts in town.The next day, March 21, startedwith a meeting of the official del�egation with the Governor ofTyumen Region VladimirYakushev and Deputy Governor
Alexander Moor. During this meeting, an official giftwas presented to the Governor from the Premier ofAlberta Ralph Klein by Alberta government officialDrury Mason, Assistant Deputy Minister, InternationalOffices and Trade Division. Mr. Mason also providedsome comments on the relationship between Tyumenand Alberta andinvited Tyumen tosend a delegationto the GlobalPetroleum Showin Calgary onJune 13 � 15,2006. GovernorYakushev re�ceived an invita�tion to head theRus�sian delega�tion planning toattend this large�scale important
CERBA Quarterly News (spring 2006)
06
TYUMEN TRADE MISSION POSSIBLE
Delegation members enjoyinglunch at the historic Potaskuyrestaurant.
Visiting Zapsibgasprom facilities �inside the newly�built gas funace.
From left: Nathan Hunt, CERBA MoscowPresident, Drury Mason, ADM Alberta, ElenaSettles, CERBA RD, Vladimir Yakushev,Tyumen Governor, Jacob Kunzer,Commercial Counsellor Canadian Embassy,Alexander Moor, Tyumen Vice Governor
event. Governor Yakushev thank�ed Alberta officialsfor this invitation and stated that he will be happy toparticipate provided his schedule allows. He also reit�erated the willingness of the regional government tosupport work with foreign businesses and joint devel�opment of new projects.Another official meeting followed � Mayor of TyumenCity Sergey Smetanyuk and Alexey Krupkin, Head ofthe Investment Policy and Strategic DevelopmentDepartment of the City Administration received thedelegation at the Mayor's office. Sergey Smetanyukhas already been developing the Canadian�Tyumenrelationship in his previous position as a Deputy�Governor of the region. In fact, his visit to Moscow andthe breakfast brief held by CERBA on November 10th2005 was a catalyst for organizing the current trademission. The Canadian business people wereimpressed with the open�minded attitude of theregion's officials and became keen on further explor�ing the opportunities for collaboration by visiting theregion.The afternoon was once again dedicated to visiting thelocal enterprises. The delegation traveled to the"Tyumen Motor�builders" company. A detailed tour ofthe plant's facilities was given by one of the managers;
the facilities and products were demonstrated in fullgear since the tour took place during regular workinghours. The group also visited the newly�builtSchlumberger facilities located on the premises of thesame plant. CERBA would like to thank Yuri Baidukov,who was very helpful both in facilitating the programcoordination and providing local knowledge during thevisit. Mr. Kulchikhin, General Director of "TyumenMotor�builders" treated the guests to a generous tra�ditional Russian meal featuring whole�baked sturgeonand abundance of red caviar. The delegation proceeded to the next item on its tight�ly planned schedule � visit to SIBNATS � SiberianScientific and Analytical Center. The delegation wasvery impressed with the high level of research con�ducted by this institution and the wealth of informationabout the region's existing natural resources and long�term projections of the economic potential and viabili�ty. Mr. Brekhuntsov, Deputy General Director, made adetailed presentation of the region's economic stateand potential. The walls of SIBNATS were covered withvarious maps containing data that would be preciousand indispensable for any foreign company consider�ing entering the regional market and making seriousinvestments. However, after considerable discussion,the delegation members were disappointed to discov�er that it is forbidden for SIBNATS to disseminate anyof the information they collect and process. Mr.Brekhuntsov indicated that the Center would, natural�
ly, be interestedin developing thebusiness con�tacts and sellingthe informationthey produce;however, thereneeds to be aspecial permitobtained fromthe federal gov�ernment first. The final day ofthe mission start�ed with the ro�undtable withmembers of theRegional Boardof Entrepreneurs in Tyumen headed by Mr. EdwardAltfater. This is a local chapter of the RSPP, which isactive in the region. Despite the early morning start,the conference room was full with over 60 peopleattending the session. The local business people rep�resented all the major industries of Tyumen region andwere very interested in learning about the Canadianproposals and projects.In the afternoon of March 22nd each delegation par�ticipant had individual business meetings with localcompanies and organizations to discuss in detail thespecific projects and proposals.In the evening, the delegation took part in a receptionhosted jointly by CERBA and Corporate GovernanceCenter at the State University � Higher School ofEconomics. The pleasant unofficial setting of theevening provided a nice atmosphere for networkingbetween representatives of Tyumen regional govern�ment and businesses, CERBA delegates, andCorporate Governance Center seminar participants.Overall, the Tyumen trade mission participants werevery pleased with this memorable and effective visit.We would like to thank all the people who assisted inorganizing, hosting, and coordinating this visit andhelped to make it an informative, fun, and wonderfulexperience that it was. CERBA is looking forward tofurther developing relationships with Tyumen region aswell to exploring new possibilities in other parts ofRussia and in other industry sectors.
07
CERBA Quarterly News (spring 2006)
Tyumen Mayor SergeySmetanyuk [right] presents offi�cial gifts to the CERBA delegationmembers.
Lunch hosted by Mr. Kulchikhin [top], GeneralDirector of “Tyumen Motor�builders” for CERBAdelegation
Tyumen trade mission delegation members visitingthe Schlumberger facilities at the Tyumen Motor�Builders Company.
This past February, EDC teamed up with other gov�ernment agencies to play "matchmaker" between 10Canadian forestry sector companies and severalmajor Russian forest product companies who are inthe market to secure everything from investmentcapital and consulting expertise to technology andmachinery. "EDC is well�known for its financial and insuranceservices," says Rod Lever, EDC Regional Managerfor Russia and the Commonwealth of IndependentStates (CIS). "But as the name Export DevelopmentCanada suggests, our mandate is also to help devel�op export opportunities, especially in emerging mar�kets such as Russia. The Canadian forestry productssector is very strong in terms of technology, and wewanted to build awareness among Russian marketleaders of Canadian capabilities." EDC recognized opportunities for Canadian compa�nies in the Russian forestry market in 2005, afterfinancing a $16 million deal between Canadian com�panies Groupe Laperriere & Verreault Inc. (GL&V)and Sandwell Inc. and the Russian pulp and papermanufacturer North�West Timber Company, struc�tured in partnership with Gazprombank. This deal,led by EDC Financial Services Manager Stephen
Hebert, established a relationship with North�WestTimber and is publicly cited by the company as thekind of financial solution they would like to pursue inthe future. "Some 25 per cent of the world's forest resourcesare in Russia, yet most of their facilities and equip�ment need to be modernized," says Lever. "We havestrong relationships with Canadian forestry sectorsuppliers and we wanted to develop relationshipswith Russian forestry companies." This idea of building relationships is especiallyimportant, since competition is stiff in the Russianforestry market. Canada is also farther away fromthe Russian forest products equipment market thansome of its competitors, which include Finland andGermany, and this adds in shipping, travel and trans�portation costs. Canada is also a latecomer to themarket.
THE CANADIAN ADVANTAGE"But our country does have advantages in thatRussia and Canada have similar landscapes. Ourequipment is made for similar forest conditions, soCanadians have expertise in this area," Lever says."Canadians also have the experience and expertiseto modernize the same types of plants. Sandwell is aprime example. All kinds of technologies, productsand services are needed for everything from therefurbishment of mills, construction of forest roads,automotive timber transporting, and more. There'ssuch a wide variety that the Russians want to buy,and if we could get even five to 10 per cent of thatmarket, we'd be looking at substantive incrementaltrade volumes." Since the market holds promise, it was decided thata matchmaking event was in order. Exfor, a high�pro�file industry trade show held during PaperWeekInternational 2006 in Montreal, seemed like the per�fect venue, where some 7,538 participants from 24countries gather for an annual conference put on bythe Pulp and Paper Technical Association of Canada(PAPTAC). Russian companies attending the eventincluded North�West Timber Company, SFTManagement Group, Solikamskbumprom, PermPulp and Paper and Segezha Pulp and Paper. "Wedecided to build the matchmaking event around theshow and even house it in the same building," saysLever. "This would provide the Canadians with aneffective way to meet several potential customers atan event they were probably going to be attendinganyway. And it cost them nothing." Meanwhile, the Department of Foreign Affairs and
CERBA Quarterly News (spring 2006)
08
Russia's Forestry Sector:Growing Opportunities
THE CANADIAN COMPANIES�����������������������������������������������������1. Babcock & Wilcox�����������������������������������������������������2. Canadian Paper Connection�����������������������������������������������������3. Cordiant Capital�����������������������������������������������������4. Gerrard Ovalstrapping�����������������������������������������������������5. Invensys�����������������������������������������������������6. KSH Solutions�����������������������������������������������������7. Paprican�����������������������������������������������������8. Rockwell Automation�����������������������������������������������������9. Sandwell Inc.�����������������������������������������������������10. Tigercat�����������������������������������������������������11. GL&V
BY JANE DALY Next time you're wondering where to find buyers for your company's products, con�sider this: somewhere, someone is wondering where to find what your company isselling. The trick is getting together, and EDC is working to make that a whole lot eas�ier.
Taken from the spring 2006 edition of Exportwise, EDC's magazine for Canadian exporters with permission.
International Trade's (DFAIT) Gilles Couturier,Europe Commercial Relations Division, wasresearching the market and approaching Russiancompanies and associations and arranging for themto meet the Canadian suppliers. "This was the firsttime such a large Russian pulp and paper missionhad been organized," says Couturier. "EDC andDFAIT work together all the time, and it was impor�tant for us to team up along with Canada EurasiaRussia Business Association (CERBA) and othergovernment agencies to ensure the event was use�ful for both sides. We needed to have a strong andthorough program to make a lasting impression. Atthe same time, we wanted the Russian attendees tobe very high level � general directors and owners � toensure that they were the decision�makers for theircompanies." In addition to mobilizing the Russian delegation toCanada, the DFAIT team worked with CERBA tosecure guest speakers and subject experts to con�duct seminars on issues that could affect the
Canadian companies when dealing with Russia,such as sustainability and timber certification.Before meeting the Canadians, the Russian compa�nies also made presentations about their industryand their requirements. To make the meetings as efficient as possible, EDCfirst reviewed its database of customers to compile alist of suitable forestry sector companies that couldsupply the Russians with what they needed.Invitations were then sent out to the prospectivesuppliers with the descriptions of the Russian forestproduct companies, and the Canadians pre�regis�tered which Russian companies they wanted tomeet. The Russians had already indicated to EDCwhat kind of potential suppliers or investors theywere interested in meeting. And the results were a definite success. "On themorning of the matchmaking session, each Russiancompany had seven or eight, 20�minute meetings,and overview presentations by our Russian guests,discussions about their capital investment plans,and how the capabilities of Canadian companiescould fit the needs of the Russian companies," saysLever. "It's one thing to have a delegation come toCanada, but it's another to provide facilitation forserious discussions. It's much more proactive andproductive." EDC was, of course, on hand to discuss any financialor insurance needs the parties might have. "Thereare two main products EDC supplies that these com�panies might need � one is financing and the other isinsurance," Lever says. He adds that vendor financing schemes can bestructured either directly with foreign buyers, or indi�rectly with a Russian bank as the intermediary. "Notall Russian companies have financial reporting stan�dards that EDC would readily accept for its directlending program," says Lever. "A Russian bank willhave the knowledge and expertise required to knowwhether a Russian company is credit�worthy. By put�ting in place a funding arrangement in partnershipwith the Russian bank, the Canadian vendor canthen offer an approved EDC financing solution,which improves the competitiveness of their prod�ucts and services." Accounts Receivable Insurance allows the exporterto provide flexible payment options to the buyer,which buyers frequently demand. "EDC can attachvarious tenors to insure the receivables of a Russianentity for a period of time, " says Lever. A Canadianbank, seeing receivables from a foreign company inRussia, might consider it too risky to extend workingcapital to the Canadian company. But with EDC onthe hook for buyer non�payment risk, they're usuallymore willing."The event was so successful that Lever would like tosee similar matchmaking events for other industrysectors in the future. "We're helping to develop tradein targeted sectors, not just provide financial servic�es," he says. "By showcasing our technology andarranging meetings like this, we're laying thegroundwork to build long�term, beneficial relation�ships."
09
CERBA Quarterly News (spring 2006)
THE RUSSIAN COMPANIES�����������������������������������������������������1. North�West Timber CompanyNorth�West Timber Company (NWTC) is a vertical�ly�integrated group of industrial enterprisesincluding the Neman Pulp and Paper Mill, theKamennogorsk Offset Paper Mill, and the VelskGlued Timber Structures Mill. NWTC is based inSt�Petersburg and its activities run the full produc�tion cycle, from logging and manufacture of cellu�lose and paper, to specialized paper products.With more than 2,000 employees, they have expe�rienced a 72 per cent growth in sales volumes overthe past three years. Over the next five years, thecompany wants to invest $50 million in theKamennogorsk Mill, as well as $400 million for thereconstruction of the Neman Pulp and Paper Mill.They are also looking to reconstruct paper�makingmachines and a cooking chemicals regenerationsystem in a $50 million project.�����������������������������������������������������2. SFT Management GroupSFT Management is majority shareholder of sev�eral enterprises, consolidated under one group.These include the Pitkyaranta Pulp Mill in theRepublic of Karelia, the Kamenskaya Paper BoardMill in the Tver region, and the Aleksin Board Mill,in the west of Russia. With almost 1,200 employ�ees at the Pitkyaranta Pulp Mill, the plant special�izes in unbleached sulfate manufacturing and pro�duced 88,000 tons of cellulose in 2004. It is look�ing to invest in increasing output of the plant.�����������������������������������������������������3. SolikamskbumpromSolikamskbumprom is based in Solikamsk in thePerm Oblast (region) of Russia and focuses onlogging and paper production, including 500,000tons of newsprint annually, wrapping paper, andpackaging for the domestic market. Established in1941, it employs nearly 4,000 workers. The com�pany is looking to improve its newsprint quality andreduce its energy consumption through continu�ous equipment expansion and upgrades.
The Courtyardby MarriottMoscow CityCenter is abrand�new fullservice proper�ty locateddowntown atVosnesenskiyPereulok in
Moscow. The hotel is CERBA's newest partner �Moscow chapter held a wine tasting there in April,which was very well received by close to 60 partici�pants. Also, CERBA has made an agreement forspecial room rates for our members. Please contactMoscow office to obtain the specific details andmake the reservation arrangements.Voznesenskiy Pereulok got it's name in honor ofMaloye Voznesenie Church which was built in 1584in honor of the inauguration of Czar Fedor Ioanovich,the son of Ivan the Terrible, and is located at thebeginning of the street. This street is one of theMoscow famous historical places. Well�knownRussian poet, journalist and critic of 19th century, agood friend of Alexander Pushkin, Prince PyotrVyazemskiy, lived there.The hotel is located right in the heart of townbetween Tverskaya and Nikitskaya streets, sur�rounded by residential buildings and the TchaikovskyMusic Conservatory. It is an ideal place to stay,whether you are on business or leisure, since thehotel is a mere 10�minute walk from Kremlin, RedSquare, City Hall, and the Old Arbat; all major busi�ness centers and several embassies are within easyreach. Behind a historical facade, a world of con�temporary lodging opens up for you. The stunning555 sqm naturally�lit atrium lobby welcomes you to amemorable stay at one of Moscow's finest hotels. The hotel offers to its guests 218 modern and spa�cious rooms. The rooms feature high�speed Internetaccess, two�line phones, Sat�TV and Radio, individ�ual climate control, alarm clock, in�house movies,mini�bar, safe, iron & ironing board, hair dryer andmake�up mirror. Non�smoking and accessible
rooms are available. Some rooms offer view of theKremlin.The hotel has all attributes required by the modernstandards: guest laundry and dry�cleaning service,safety deposit boxes, 24�hour Room Service, busi�ness center, limousine service, luggage service,bank/exchange office, ATM, WLAN in all public areasand function rooms, gym with exercise equipment,secure underground parking for 65 spaces, shoeshine machine, complimentary coffee and tea from6am to 9am in the lobby, complimentary morningnewspaper.The Courtyard also provides to its guests excellentmeeting facilities � it has three conference roomswith a spacious foyer, totaling 250 m2, with a totalmaximum capacity of 150 people. For gala�recep�tion, there is a "Grand Courtyard" Atrium that canaccommodate up to 300 guests. The Courtyard'smeeting professionals approach every event, largeor small, with a dedicated focus�providing you thecomfort level you deserve.The hotel also features two restaurants: "Terraneo" �Cuisine of the Sun, which offers a large BreakfastBuffet as well as Mediterranean a la carte for lunch &dinner, and "Flat Iron" Bar and Roadhouse, bar &casual restaurant with great selection of good foodand drinks in a rustic oak�wood setting.
Contact Information:Courtyard by Marriott Moscow City CenterVoznesenskiy Pereulok 7, Moscow, 125009, RussianFederationPh: +7 495 981 33 00Fax: +7 495 981 33 01Web: www.courtyardmoscow.com
CERBA Quarterly News (spring 2006)
10
Courtyard by Marriott Moscow City Center:New Hotel, New CERBA Partner
CERBA would like to welcome itsnewest member who joined the asso�ciation in 2006 as educational organi�zation � CEMBA (Certifi�cateExecutive MBA) Program. CEMBAwas established jointly by the RotmanSchool of Management at theUniversity of Toronto and theGraduate School of CorporateManagement at the Academy ofNational Economy under the RFGovernment. The current article pro�vides an overview of the educationalopportunities offered by these institu�tions and their joint program.The international discourse givesmuch attention to exploring the per�sonal qualities required for the headof a successful organization. Aftercareful study, the reader can make afollowing conclusion: there is no uni�versal standard, it depends both onthe individual and the nature of thebusiness managed by him/her.However, there are some personalqualities that every successful man�ager has to possess: successful man�ager should constantly comparehis/her skills with the requirementsimposed by the modern businessenvironment, and update them on aregular basis. Today high�class top managerial spe�cialists in Russia are at the crossroads� whether to go to the West to com�plete the prestigious program ofExecutive Education or to take acourse in Russia. Why should they goabroad if world�famous and respect�ed business schools are ready toshare their experience with Russianstudents? One of the best businessschools in the world, the CanadianSchool of Management, named afterJoseph L. Rotman, has recently cometo the Russian educational market.According to Business Week, it isranked among top ten best non�American business schools in theworld.For a long time the Rotman School ofManagement has been considered apearl in the ocean of business educa�tion � due to its educational level,quality of programs and the highestprestige in the field of consulting. Itwas established at the University ofToronto � the oldest university inCanada � founded in 1827 and con�
sidered to be one of the leading edu�cational institutions of the world. TheRotman School of Management hasthe past, rich in its traditions, but italso keeps up to date by giving its stu�dents fundamental and the newestknowledge, modern vision of eco�nomical situation in the world, andforming the integrative model ofthinking. This is the thinking whichcan operate with the most generalfundamental regularities of the worlddevelopment in the whole and toquickly master the environment.Forming of integrative thinking andability to project the development ofbusiness are the basis of innovativeapproach of the Rotman School to themanagement training. The IntegrativeThinking and Business Design are theregistered trademarks of the RotmanSchool of Management.That is why in 2005 the RotmanSchool was ranked 13th in the worldin corporate management trainingand 20th in the world in ExecutiveMBA programs, according toBusiness Week. Rotman School grad�uates are the elite of the world busi�ness. They hold top managementpositions in many world�famous com�panies: Ritz�Carlton Hotels, Researchin Motion, Citigroup, Siemens,Porsche, Pepsi, Ford, Sony and manyothers. Entering the Russian educationalmarket, the Rotman School naturallythought about both a program suit�able for Russian business environ�ment and a reliable partner. As for theprogram, the choice fell on ExecutiveEducation. The partner that RotmanSchool chose to develop its educa�tional program in Russia is theAcademy of National Economy underthe RF Government. The choice wasbased upon the high prestige of thethis institution (the names of this insti�tution graduates are well�known inRussia and abroad, and include,among others, L. Kuchma, V.Chernomyrdin, N. Nazarbaev, V.Khristenko etc.), its longstandingexperience in management training,and, also, on its close connectionwith the RF Government. The result of collaboration betweenthese two institutions is the joint edu�cational program � CEMBA
(Certificate Executive MBA) �Strategic Unity: Management andBusiness Administration.The program consists of 6 courses,and its content reflects both thebasics of classical MBA and thenewest knowledge in the field of man�agement. The Canadian part of theprogram is taught in English by theleading instructors from the RotmanSchool using original academic mate�rials and the most successful casestudies of the School's ExecutivePrograms.The Russian part of the program istaught in Russian. It is designed toprovide a comprehensive trainingadapted to the Russian learning styleto ensure mastering of the materialsby the students. After successfulgraduation from the program, stu�dents receive two diplomas: CEMBA � International Certificate ofthe Joseph L. Rotman School ofManagementCEMBA � Certificate of ExtensionCourses at the Academy of NationalEconomy under the RF Government.This type of training is very convenientfor busy top managers, companyowners, CEOs, CFOs and mid�levelmanagers. The program duration is 5months with 3 day sessions withinstructors for every block, independ�ent studies of academic materials andregular tests. Executive Education Program pro�vides its students with outstandingopportunities for self�realization andcareer promotion. The cost of theRotman School Executive Program inRussia is 5,400 dollars per full trainingcourse taught by instructors withhighest qualification. Training coursestaught by instructors from theAcademy in accordance with theschedules and subjects of theCanadian part of the program areoffered at a price of 4,600 dollars percourse. This program is an excellentinvestment which can provide the stu�dent with outstanding benefits interms of professional and personalimprovement. If you are interested inlearning more about CEMBA pro�gram, please contact LyudmilaUzhinskaya, CEMBA ProgramDirector at [email protected] orby phone at +7 (495) 937�0299.
CERBA Quarterly News (spring 2006)
11
QUALITY OF EDUCATION �
QUALITY OF LIFEАКАДЕМИЯ НАРОДНОГО ХОЗЯЙСТВАПРИ ПРАВИТЕЛЬСТВЕ РОССИЙСКОЙ ФЕДЕРАЦИИ
CERBA Quarterly News (spring 2006)
12
CEBRA would like to thank its sponsors for their commitment to making the association a success.
CERBA Quarterly News (spring 2006)
