Business

Federal Trade Fair for Light Industry

The Federal Trade Fair for Light Industry “TextileLegProm” is the main venue for forming market ties between Russian Light Industry and trade. This is one of the specialized exhibitions and forums that have been held since 1993. More than 1,600 participants from Russia and other countries gather at the present samples of their textile production and also view materials and equipment for the textile industry. According to analysts the exposition is a good indicator of what is happening in the Russian Light Industry market.

Mikhail Novikov, Alexander Biryukov, Alexander Kruglik

Fourteen years has demonstrated that the market is growing, along with the exhibition, which strives to present Russian products in a more attractive way inside Russia and abroad. The number of participants has increased ten fold.

By the 1990’s the interest for what was produced in post-Soviet Russia was so low that the huge VDNKh exhibition center almost turned into a large open market of private commercial concerns. One of the few exhibitions that still attracted crowds was the Federal Trade Fair for Light Industry. The exhibition now takes place twice a year in several pavilions and is organized by Roslegprom (Ministry of Light Industry) and RLP-Yarmarka, the Russian leader in exhibition management. The exhibition is supported by the Russian Ministry of Economic Development and Trade, the Russian Union of Manufacturers and Entrepreneurs, and also by the Moscow Government.

The VDNKh (literally the Exhibition of Economic Achievement) was the center of business exhibitions during Soviet times. The exhibition was established in 1935 as the All-Union Agricultural Exhibition or VSKhV. The existing site, then known as Ostankino Park, was a suburban territory that had been recently incorporated into the city limits. The VSKhV opened on August 1, 1939, and was open from 8:00–23:00 every day until October 25 with 40,000 in daily attendance. In 1959 the park was renamed the Exhibition of Achievements of the National Economy or VDNKh. By 1989 the exhibition had 82 pavilions with an exhibition area of 700,000 square meters. Each pavilion was dedicated to a particular industry or field of science and technology; the Engineering Pavilion (1954), the Space Pavilion (1966), the Atomic Energy Pavilion (1954), the People’s Education Pavilion (1954), the Radio electronics Pavilion (1958) and the Soviet Culture Pavilion (1964). It was the site of expositions in different fields from arts to atomic energy. At VDNKh specialists and curious visitors gathered to view the achievements of the Soviet Government.

When the Light Industry Fair fi rst took place fourteen years ago, all the economic indicators were at their lowest. The Light Industry exhibition was almost cancelled. “The old system when everything was governed by a plan economy had simply collapsed.” commented Mikhail Novikov, the General Director of RLP-Yarmarka. Instead, a new market emerged. Enterprises faced the necessity to make their own market research about demand, to find new clients, and to sell their own produce. A lot of enterprises were privatized. The Russian market had become deluged with the cheapest Chinese and Vietnamese goods. And when it seemed that there was no hope for the textile industry in Russia, an idea was developed to gather all the manufacturers in one place and expose them to potential buyers, manufacturers and suppliers. Other aims of the Fair were to create local markets for the Russian textile industry; to provide the participants with opportunities for new contracts and clients; to present new international fashion trends to the Russian market; and to attract the attention of mass media, businessmen, and investors to the textile industry.

More than 1,500 participants gather in February and September from Russia and abroad in order to exhibit items ranging from furs, shoes, fabric and light industrial equipment. Now the exhibition center is called VVTs, or the All-Russia Exhibition Center. “Today’s motto is Russian products for the Russian market,” says Alexander Biryukov, the President of OOO Roslegprom. The exhibition takes place in five pavilions with a total expo area of more than 40,000 square meters.

The largest pavilion at VVTs hosts prête-à-porter clothes for women and men; coats, shirts, hats, raincoats and furs all produced by Russian manufacturers. Every day there are fashion shows, seminars, master classes and competitions in several categories such as manufacturing, product design and ashion clothing. The second salon is for jersey. Here are all types of home wear, swim wear, sports clothes, and textiles. There is a separate hall for children’s clothes, with fashion shows for children. There is also a salon for leather and shoes. And finally there is a hall for equipment producers who work in the industry offering the latest in automation systems and equipment.

“Our main participants are Russian enterprises. If there are foreign companies that suit our format, of course we invite them as well,” says Mikhail Novikov, “but our goal is to invite more Russian companies from the regions, to have them become acquainted with foreign clients and trends.”

“One of our achievements is that the share of our enterprises in the marketplace is now 20%. Of course we would be happier if it were 100%. But we realize that it is impossible. But a market share of 51% is quite achievable,” the President of Roslegprom Alexander Biryukov adds. “What is preventing Light Industry from achieving this figure is that there needs to be more investment from the State.”

Vice President of Roslegprom Alexander Kruglik suggests a small experiment. He proposes that the businesses in Light Industry should not pay a portion of taxes for two years. This then would be used for reinvestment in the companies. For the Federal budget this is a tiny figure and it would allow companies to be re-equipped with new, safer and faster machinery, insists Tatyana Sosnina, the Head of the Trade Union. Most of the equipment used in Light Industry is from before the end of the 1980’s and urgently needs replacing. For that, the Russian government should offer some tax advantages to spur upgrading of the industry.

“Gray” import is another obstacle that upsets the local producers. According to research by the Association of Managers, 86% of entrepreneurs in the industry believe that profi ts of Light Industry will be much higher if the State would make it impossible for some companies to illegally import goods which are often of very poor quality, but are deluging the Russian market and preventing he local manufacturers from being competitive.

Alexander Biryukov notes that “having accepted foreign retailers in the Russian marketplace, we have allowed them to play according to their own rules. Russian manufacturers have suffered discrimination. The law about trade should first of all support the priority of local producers. The latter should care about the quality and competence of their products of course. Still, the market is not transparent enough.”