Netherlands to Become Russia’s Top Trade Partner

Posted by

Dec. 22 – The Netherlands has made itself Russia’s top trade partner for the period from January 2010 to October 2010, accounting for 10 percent of Russian trade turnover.

According to federal statistics, other top trade partners are Germany (8.3 percent), Italy (6.1 percent), France (3.7 percent), and Poland (3.4 percent).

Dutch companies have been pumping investment into Russia in recent years — US$11.6 billion in 2009 made up 14.2 percent of all foreign investment in Russia.

“As a small country, the Dutch are used to adapting themselves to other countries and other cultures. Take two steps and you’re out of the country — if you want to do business in Holland, you have to do it internationally,” Jeroen Ketting, managing director of the Lighthouse Group, which provides business support, management services and strategic advice to many Dutch companies in Russia, says to an interview with The Moscow Times.

“What Dutch business brings to Russia is know-how, effective processes, optimization of businesses and profit,” says Ketting.

“There’s openness,” said Dick Bongard, Eastern Europe director for the manufacturing giant DSM. “Especially now with the trend in Russia to modernize, diversify and localize, there’s a strong trend to look for Western partners.”

DSM has had a sales presence in Russia since 1991 and has ambitions to expand its activity.

“If you don’t enjoy it here, every little obstacle becomes a gigantic problem, psychologically in your mind. The only people I see here who have success are people who like it here. They all have an affinity with Russia, they all like the craziness of the place,” Ketting said.

“In all of my years working in Russia, I have found it impossible to be successful if there is no personal connection with the people at the other side of the table, because through these connections one develops that essential relationship where mutual trust is the key,” said Dominiek Ampe, CIS Regional Manager for Dockwise, a Dutch marine engineering firm that has joined with 16 other Dutch firms to form Project Delta to push their bids for oil infrastructure projects.

Dutch technology companies see great opportunities in the projected development of Russia’s untouched arctic gas fields, above all in the development of the Shtokman oil field and the Yamal Peninsula in northern Russia.

Dutch businessmen believe the cause of most of the problems of foreign businesses in Russian is not legislation or bureaucracy or customs or logistics — the problems are in communication and lack of mutual understanding or lack of trust.

Dutch insurance firm Eureko, which arrived on the country market in 2008 with the acquisition of local Oranta, is taking a chance in Russia.

“There is great potential in the insurance market. We want to be insured for everything, but if we can change just 5 percent of the nation’s mentality, that’s a quite a large part of the market,” said Eureko’s spokesman Bert Rensen.

In 2006, UFG, the investment bank owned by Deutsche Bank, forecast that non-life insurance alone would grow from about US$12.5 billion in 2006 to over US$100 billion in 2016.

Dutch businesses are looking toward the regions. A trade mission with 34 Dutch companies in spheres as varied as water treatment, building machinery and accountancy, will head to the cities of Samara and Kazan in coming year.

“The real market development in the coming decade from 2010 to 2020 will not come in Moscow and St. Petersburg, but in the regions,” said Ketting.