A Love for Russia Brings Great Rewards
- Dec. 03 2015 00:00
Roca Group, one of the world's leading manufacturers of sanitary ware, has witnessed the growth of the Russian market since it arrived in Russia in 2004. Antonio Linares, general director of Roca Group in Russia and the CIS, spoke to The Moscow Times about the importance of understanding realities, making the right decisions, falling in love with Russia and collaboration with the Bolshoi Theater.
Roca Group has been working in Russia for 10 years. How much has the market been transformed during this period? Has the company revised its perception of doing business here?
The market has changed a lot. Some of the big players disappeared, new ones popped up. We are revising our perception daily to adjust to the latest challenges. Those who could not understand the new realities went bankrupt. This market changed from being driven by a huge demand with a limited supply in the 1990s and early 2000s into a market with almost every market player present, expecting to find a goldmine here; and finally into a market with strong competition and shrinking demand.
Roca Group built a factory to produce sanitary ware in the city of Tosno, in Leningrad region. Why did the company decide to create its own production facilities immediately after entering a new market?
There were several reasons. When we looked at the real estate sector we understood that the amount of renovation and new construction needed was enormous. We realized that none of the international players were present in Russia and we could set up our factory first. And the high cost of logistics made it worthwhile — transportation and customs were taking a huge share of the ultimate cost of our goods.
How does the factory perform now? What is its productivity?
We have now seven factories in Russia. All of them are performing well, with production mixes of great complexity and they have costs that are among the lowest of all the 78 factories that we have around the world. We produce goods in Russia under several brands, including Roca, Aquaton, Jika, Santek and Santeri, but we also produce for several multinational DIY chains.
What are the main channels of distribution for Roca Group's products in Russia? Do you sign direct contracts with big retail chains or work via intermediaries?
We as a rule work through wholesalers. Russia is a very vast country and logistics is an issue. We believe that there need to be specialists in every field. We are great at producing, but put all our efforts into making our customers feel confident that the product that they purchase meets the highest standards.
What were the main difficulties that Roca Group encountered when entering the Russian market? What are the main difficulties at present? How do you tackle them?
We first had to convince all major players that we were here to stay. I still remember many of our clients saying with certain skepticism that we were just another foreign producer "studying the ground to eventually do nothing." We still work with some of them and when we meet we have some laughs remembering those times and those talks. Also, we had to learn and understand how to get things done when it came to local rules and regulations, and also draw lines that we would not cross. That took time and effort, but it proved possible.
There are many that hide their own mistakes by trying to blame Russia, but in Russia, as almost everywhere else, if you make the right decisions and do your homework, things come to a good end. The main difficulties now are mostly associated with a shrinking economy but we have managed to find ways to continue growing. Our team is strong and feels committed; many of them started with us when we were building our first factory and they grew with the company. We also try to live our business as an integral part of our lives, enjoying the privilege of playing a game that can transform the life of our customers. It may sound weird, but can you imagine how it feels being in one of every four bathrooms in Russia? I want to believe that we contribute to bringing comfort and relaxation to the bathrooms of many families.
Did you face many competitors on the Russian market back in 2004? How do you find the competitive environment?
As you would expect, competition has been growing steadily. In Russia you can find products from almost every corner of the world in the shops. And we are fine with that. But we are one of the few that can say with pride that we love Russia. Not just words. We are here. We have invested a lot here. More than 2,500 people work with us here. We pay our taxes here.
What disadvantages of the Russian market can you identify?
Many businesses started not long ago and there is certainly a certain lack of experience. The economy is not very diversified and that means that many services are still difficult to get or too expensive. Many companies do not have their professional structure set up with enough efficiency and control. But competition and time will put things in their right place, little by little.
What advantages could you name?
There is still a lot to do, there is energy in the air. The country will surely develop, sometimes at a fast speed, sometimes a bit slower. There are many apartments that still require renovation, and we hope that we will be there to deserve the confidence of all those who decide to make their bathrooms better. I read an analysis recently which said that because of the weak ruble we have now, many would decide not to travel abroad and would instead spend their money in making their homes a better place to spend their holidays. Well, a cozy renovated home might be a wonderful place to spend holidays. When it comes to holidays I am usually so tired of traveling between our seven factories that I often choose to stay at home.
Could you shed light on the history of your partnership with the Bolshoi Theater?
To make a long story short, we are there in the Tsarskaya Lozha (Imperial Box) and on several floors. The details go beyond the limits of this interview, there is not enough time. But we are glad to be there, as we are glad to be part of the Eiffel Tower in Paris and many other iconic places all around the world.
Speaking about culture, it's worth remembering that Roca Group participated in the organization of the Cinderella ballets in Moscow in June during the Chekhov International Theater Festival. What inspired you to support the Russian cultural heritage? Do you have any plans for similar partnerships in the future?
As I said, we love Russia, it's not just words. And Russian culture is so immensely rich. I believe that the Chekhov International Festival is among the best in the world. I enjoyed two of their shows this year and I recommend that those who still have not seen it try to go in the future. Yes, we have plans to continue supporting these events. We supported the Tretyakov Gallery as well and we will continue finding projects that share our values and bring joy and fun to the public.
Roca Group collaborates with the Italian fashion house Armani. Would you like to launch any partnership with Russian designers?
We already work closely with them, we participate in some of their projects and we look forward to having them participating in ours. By the way, it was thanks to The Moscow Times that we met Vladimir Pirozhkov, with whom we are working on one of his projects. He is an excellent industrial designer, but most importantly, an excellent person full of ideas and charisma. We have also worked and developed some projects with Yaroslav Rassadin, another very talented Russian industrial designer. And we have close friends among Russian architects and interior designers. We have recently completed a project in the Detaly Interior Design School in Moscow, and we recently finished the International Terminal in the Samara Airport with VOX Architects led by Boris Voskoboinikov, one of our key partners, who has already become a friend.