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. Last Updated: 07/27/2016

PEOPLE IN BUSINESS:Ramstor Chief Rides on Success




ISTANBUL, Turkey -- With hypermarkets in Azerbaijan and Kazakhstan and a second store almost completed in Moscow, Bulend Ozaydinli looks over his Ramstor fiefdom and surveys the Russian playing field with glee.


Russia -- a world of bureaucratic hoops, malignant taxes and economic uncertainty -- can paralyze foreign investors who are thinking of entering its frigid waters. But not Ozaydinli, who, as head of one of Turkey's largest supermarket chains, says he's got an edge -- experience in Turkey.


"Since we were accustomed to difficulties in our own country, Moscow looked like a great place for us to invest," he said at his desk, a map of Russia adorning the wall behind him.


Russia's current inflation of about 9 percent pales in comparison to Turkey's 80 percent, and the description of Russian taxes as Byzantine is a mere tribute to Ozaydinli's hometown. Besides, he says, even from a Turk's perspective, the difficulties of opening a business in Moscow are hardly different from the rest of the world.


"The bureaucracy is terrible all around the world," he said. "Try to open a hypermarket in Paris or London and we will see what kind of difficulties you face."


The soft-spoken Ozaydinli is the general manager of Migros, the 45-year Turkish chain of supermarkets and hypermarkets that partnered up with Turkish builder Enka and Turkish food-trading mogul Ram Foreign Trade to enter the Russian market.


Operating under the name of Ramstor, the group opened its first market -- a 6,000-square-meter behemoth offering goods ranging from food to electronics and household products -- last December in western Moscow at a cost of $34 million.


The push to build its own premises rather than rent, as the company usually does in Turkey with its 180 stores, is hailed by Ozaydinli as proof that the Ramstor partners came to Russia to play serious ball.


"We don't invest in stores in Turkey, we rent or lease them," he said. "But in Russia, we do [invest], and this shows our belief in this country. If not, we wouldn't spend millions of dollars in real estate."


Ozaydinli, whose work before joining Migros in 1988 included industries such as car manufacturing and pesticide production, said he has been optimistic about Russia since his first visit in 1992.


"Looking at the difficult conditions of those days, we were a bit hesitant to invest in Russia," he said. "But looking at the potential of the country, we tried to make estimates about its future, and it was very promising."


Now, Migros and its partners are building a second store in southeast Moscow. They are planning a third store by the end of the year and a fourth next year. The joint venture has established distribution and supply lines that it claims can support 10 such hypermarkets, Ozaydinli said, and it is keen to make use of the potential if it hopes to turn a profit soon.


"We should operate at least four hypermarkets ... but we are operating only one. In these conditions, it is not a profitable business at all," he said.


Migros' Turkish chain, Ozaydinli says, maintains a net profit of about 4 percent of turnover.


Ozaydinli acknowledges that his venture has received a high-level boost from Moscow Mayor Yury Luzhkov, who was inspired by the megastores he'd seen abroad and wanted to bring the concept to his capital city.


"When we were in his office, he even wanted to show us his ideal store by drawing a picture of it," Ozaydinli said. The Turks solidified their chances with the nationalist mayor by promising to sell both Russian and Turkish goods in their stores. The result has been lower prices, which Ozaydinli said he hopes will soon compete with the outdoor markets favored by bargain-hunting Russian shoppers.


"Even when there's rain or snow, people still come to the [outdoor] markets. They have an image that in these conditions, prices will be lower," he said, adding confidently, "But with more Ramstors, this will gradually change."