NQ 13/1994
IN THE INTEREST
OF 100,000 RUSSIAN FIRMS
The representative office of the Russian Chamber of Commerce
and Industry in South Africa is helping
businessmen and dispelling illusions
FIVE OUT OF TWO HUNDRED
The Russian Chamber of Commerce and Industry (CCI) took the
initiative in developing relations with the Republic of South
Africa, as it had done in the case of Israel and South Korea:
the bridgehead of business ties built in these countries later
on formed the prerequisite for the establishment of official
relations. Beginning 1990 we began to study the possibility of
trade between Russia and South Africa. We paid primary
attention to partner organizations - local chambers of trade,
of which there are more than 200 in South Africa.
One of our partners is the South African Chamber of Business,
which unites numerous regional chambers, Another one is an
organization that expresses the interests Afrikaans
businessmen, called De Afrikaanse Handels Instituut. The third
is a Chamber of Commerce uniting black businessmen - the
National African Federated Chamber of Commerce (NAFCOC).
As result negotiations with these partners, we signed an
agreement as a basis for further cooperation. A Protocol on
cooperation was also signed with the South African Foreign
Trade Organization - (SAFTO), which is responsible for
promoting export operations of South African firms, and for the
organization of exhibitions and exchange information. It helped
us to establish business ties. Our structure has a group called
Vneshekonomservis, which with other Chamber’s, covers the whole
spectrum of activities of SAFTO.
We have also established ties with the influential South
African Chamber of Mines. It has no exact counterpart in Russia
- it brings together all mining enterprises arid firms,
participates in dialogue between entrepreneurs and trade unions
in the mining industry, and establishes contacts with foreign
partners.
VISIT TO NORILSK
Relations with these five organizations have been established
on a long-term basis, which makes it possible for us to develop
ties with them on behalf of CCI members. Within the framework
of the agreements signed, we conducted an exchange of
delegations; delegations of South African firms visited Russia
twice along SAFTO lines. They established ties with our
industrial enterprises. A Seminar on mining subjects was held:
in the mining sphere, including mining technologies, the two
countries have vast experience in. The South Africans also
visited the Norilsk Integrated Plant, the Lebedinsky Ore
Concentration Plants in Belgorod Region, and the Kola
Peninsula. As a result the Norilsk Project was bom. The South
African firm Impala, which produces platinum concentrate, sent
its product for processing in Norilsk. As far as I know these
operations have been completed. But on the whole the potential
of cooperation in mining has not been used to the full.
With some countries (France, USA, Italy) the Russian Chamber of
Commence and Industry cooperates by Setting up joint chambers
of trade. Our cooperation with South Africa has not reached
this stage yet, but I think this is still possible since it
would be a logical development of the present structure of
relationships, The CCI's representation apparatus in South
Africa, which is designed to promote the interests of its
100,000 members, is for the time being obviously inadequate for
its tasks - there is only me and my assistant working here in
South Africa. We Study the proposals of Russian entrepreneurs,
companies, shops and even private individuals, and also those
of banks, investment companies and other financial
institutions. No matter who comes to us - whether it is a super
powerful organization like the Russian motor-vehicle maker ZIL
or a tiny firm - we try to be helpful: an inquiry is an inquiry
whether it is made in Africa or elsewhere. It is our duty to
help all who come to us.
A huge number of proposals also come from South African firms,
for which we likewise try to select partners based in Russia.
We are most often asked to look for Russian exporters of
ferrous and non-ferrous metals, building materials (cement,
timber), fertilizers, different kinds of instruments, and
technologies. Ninety nine per cent of the inquiries come from
operators based in South Africa but representing South African
or overseas firms - British, American, Australian. In the case
of Australian firms the goods are intended for a third
country. We give priority to satisfying inquiries about goods
intended for South Africa. Or, on the contrary, we assist in
the delivery of goods from South Africa to Russia.
We would like entrepreneurs of high caliber come to us. The
problems we face are sometimes very serious, concerning those
same deliveries of metals or, say, large scale freights.
Sometimes we spend a lot of time preparing an exhaustive answer
to an inquiry, and then it transpires that the inquiry was not
serious or came from an incompetent inquirer. Firms seldom
notify us of any contracts concluded through our mediation.
ALONE IT IS HARDER TO WORK ONE’S WAY THROUGH
Many Russian companies and individual businessmen try to do it
alone. When they come to South Africa they sometimes disregard
the CCI representative in an attempt to keep the "the firm’s
secret", fearing competition and leak of information. There
are, of course cases when such entrepreneurs are lucky but very
often disappointment awaits them because of their
self-assurance. After their failure they normally come to us we
try to select reliable South African partners, whom we know
better bet we have relevant knowledge and databases.
Although the CCI representative office in Johannesburg has been
in existence for a mere 18 months, we are, so to speak, in the
concluding stage of formation. By no means do we claim to be
the sole agency capable of assisting in the establishment of
ties, if only by virtue of our massive bilateral business
probes. On the Russian side this pressure is fuelled by notions
that in distant South Africa, little known for long years
"diamonds grow on trees and the roads are paved with gold".
This gives rise to many illusions that there are fantastic
business opportunities in South Africa. Such illusions have to
be dispelled and replaced with common sense. But in so doing we
should take care not to stifle the desire to promote business –
we must not dampen the enthusiasm of enterprising individuals.
We do succeed in this endeavor: many of the businessmen who
visited South Africa come back this time with well thought-out
and proposals. And they have a far greater chance of success.
Vadim Mezhnikov represents the Russian Chamber of Commerce and
Industry in the Republic of South Africa.
