Expansion of Construction Business Activities into Russia - Speech or Presentation Example

Speech to Accompany Presentation for a Feasibility Study Report for Expansion of Wind Energy Consulting Business Activities into Russia By Candi s Name 2011 FACULTY OF CONSTRUCTION MANAGEMENT AND ENGINEERING (This page intentionally left blank) Slide 1: Introduction – Presentation Title Slide for a Feasibility Study Report for Expansion of Construction Business Activities into Russia Members of the Board, Ladies and Gentlemen, thank you for giving me the time to present to you my carefully researched views on the opportunity for National Power Consultants to expand consulting operations into Russia, a country with a huge untapped potential for wind power applications. We will see as the presentation unfolds that Russia presents novel opportunities. It will be right for National Power Consultants to consider trying to establish its reputation in Russia as a Wind Power Consultancy because Russia is a huge emerging market that offers lucrative opportunities. However, expansion into Russia is not without risks. Slide 2: The Need for Expansion With prevailing economic instability in Western Europe and the United Kingdom, it is only natural for National Construction to look for new markets that will present strategic opportunities for growth and new business. The construction sector in the United Kingdom presents serious contraction, and it is difficult to generate new business. However, even if business was proceeding normally, it will make sense to try to export the expertise for wind energy to other countries with a potential for wind energy. United Kingdom and Scotland have made substantial investments in wind energy, and it makes sense to try to reap benefits from these investments. Slide 3: The Macroeconomic Environment in Russia Although Russia has suffered a macroeconomic shock due to low prices of oil and gas in international markets and wildfires that wiped out forests and farmland in this country, a complete recovery is now apparent. Russia’s oil and gas exports maintain a constant source of income despite the fact that inflation remains abnormally high, and a certain upward pressure exists on the exchange rate for the Russian Ruble. These factors combine to present uncertainties in financial engineering. However, despite the uncertainties, Russia presents a healthy current account surplus with stability for the long-term future, and it makes sense to try to let the Russians know about National Power Consulting. Slide 4: SWOT Analysis for Russia Although the government in Russia wants to maintain control on energy sector to benefit Russian firms, an attitude that sometimes spills over into politically motivated campaigns against foreign firms, Russia is now a far more attractive place for doing business than it ever was. Corporate tax rates are relatively low, and the government of Russia has a stated policy of encouraging foreign investment and sustainable energy. Russia is a huge market of strategic significance and although legal safeguards are poor with massive corruption, an inefficient bureaucracy and street crime with threats of terrorism, serious efforts are underway to bring about improvements. Slide 5: Construction for Energy Sector in Russia The government of Russia wants to focus on sustainable energy, and Russia offers potential for wind energy that will benefit from leading edge technology research for which excellent investment exists in the United Kingdom and Scotland. Thus, a need exists for working with Russian companies to make available to Russians technology solutions that will enhance any future projects for wind energy in the country. Currently, the focus in construction for the energy sector is on pipelines for export of oil and gas, but it makes sense to interest Russian firms in renewable-energy projects because even with huge reserves of oil and gas, Russia will benefit from leading-edge wind farms. Slide 6: Wind Farms in Russia and the Future Although Russia remains heavily dependent on oil and gas for its energy needs because oil and gas reserves are abundant, it makes sense for Russia to try to make use of its renewable-energy potential. Estimates for planned wind energy projects in Russia stand at approximately US$ 8 – 10 billion and these projects will benefit from efficient, reliable leading – edge technology that is the best in the world. National Power Consultants have access to such wind energy technology from United Kingdom and Scotland. Thus, it is possible to interest Russian firms in advanced wind energy projects that will exceed planned projects, with technology consulting and BOOT (Build, Own, Operate and Transfer) options. Slide 7: Natural Power Consultant’s Position National Power Consulting has established its reputation in the wind energy consulting business, with more than 14 years of consulting experience around the world in projects exceeding 25 GW. Because leading wind energy firms, including Doosan Power Systems, Mitsubishi, and Siemens have located their R & D centres in Scotland and the UK, with active wind energy research a priority in leading UK universities, National Power Consulting has access to the best and the latest in wind-energy technology. What National Power Consulting needs to do is to help with application engineering and financial engineering for wind energy projects in Russia. Slide 8: Problems of Doing Business in Russia Although Russia has opened up and this country now wants to shun its isolation, problems do exist with doing business in Russia. Corruption makes it difficult to prepare financial plans / project estimates and language / culture are very different from the UK. A collective mentality persists, and a tendency still exists for thinking about profits in business as funds that should benefit society. Because Russia is not a member of the WTO, its legal system remains alien to what is now the global norm, and the government wants Russians to maintain control of the energy sector. However, consulting activities are likely to optimise risks. Slide 9: Entry Strategy for Russia Because of the business risks and because National Power Consulting must explore carefully the market for wind energy consulting in Russia, it makes sense to try to take a cautious approach to expansion in Russia. It is important to remember that Russia has access to wind energy technology and on-going efforts to develop wind energy technology exist. Without existing contracts, National Power Consulting cannot expand aggressively into Russia and this means that it makes sense to first approach Russian firms and potential Russian partners for any prospects. If a favourable response is forthcoming, it is likely that a representative office in Russia will help further expansion. However, it is important to make the effort to explore for wind energy consulting opportunities in Russia. Slide 10: Feasibility for Business Expansion for a Wind Farm Consultancy Because National Power Consulting has access to latest developments in wind farm equipment and operations technology as well as capital, it is possible to interest Russian partners in making use of these strengths. However, domestic competition from Russia and other international firms, including those from Nordic countries, multinationals that include Siemens, Mitsubishi, and Doosan Power Systems, etc. is apparent. Many Western firms now operate in Russia, and this means that it is possible to work in Russia despite the difficulties. However, it is important to take the initiative to explore for opportunities in Russia because this country has wind energy potential and a strategic significance. Slide 11: Conclusion and Recommendations Because Russia presents a potentially lucrative and strategically significant market for wind energy consulting involving leading-edge technology and designs based on experience, it makes sense to explore opportunities by interacting with potential Russian partners. Thus, National Power Consulting should emphasise a dialogue with Russia and Russian firms to highlight its strengths with a view to exploring consulting opportunities. If a dialogue with Russian entities proves encouraging and business prospects are likely, opening a representative office in Russia is likely to help with further exploration and expansion. A successful record of accomplishment in consulting in Russia will establish the reputation of National Power Consulting and this will help secure more consulting work. Slide 12: End of Presentation – Thank You! May I thank members of the board, ladies and gentlemen, for your kind attention to my presentation, and I want to emphasise that it makes sense for National Power Consulting to explore prospects for wind energy consulting in Russia. Read More