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Introductory remarks H.E. Mark Rutte, Prime Minister of the Netherlands
There is a strong interest of Dutch businesses to further develop relations with Russia and Dutch companies play an important role in the development of the Russian economy. There are also important Russian investments in the Netherlands and there are plans for further investments as well. The Dutch government is willing to stimulate these relationships, because they are important for both countries. The accession of Russia to the WTO is also an important milestone for the further development of business relations.
Introductory remarks by H.E. Vladimir Putin, President of the Russian Federation
The President expresses his delight to see so many friends again. Dutch and Russian businesses are working fruitfully together in important projects such as Bergermeer, Sakhalin and Nordstream. Philips is also very active with investments in Russia. We should do everything to create a conducive environment for such projects.
The Russian economy is in good shape. Especially, the foreign currency reserves are large, two to three times as big as the IMF requires. This creates financial security for foreign trade. Russia is working on the improvement of the business climate.
The creation of the Customs Union between Russia, Kazachstan and Belarus is good news for business. It creates a market of 165 million consumers. Although Kazachstan and Belarus are not yet members of the WTO, the customs union between the three countries is based on the WTO principles and rules.
Introductory remarks Mr Bernard Wientjes, President of VNO-NCW
We have the pleasure today to have for the fifth time a CEO Round Table meeting with the Russian President, and for the third time with President Putin. The Dutch business delegation assembled here today is the largest and highest level delegation ever. We are looking forward to a very fruitful discussion.
Introductory remarks of Mr Alexander Shokhin, President of RSPP
Mr Shokhin thanks the Dutch host and the President for this meeting. It is not the first time that we meet, and many projects are very successful. In 2006, RSPP and VNO-NCW concluded a co-operation agreement and since then turnover in bilateral trade doubled. There is a whole series of projects taking place, and notably also innovation in traditional sectors.
RSPP is co-ordinating the business input for the G 20 meeting at the beginning of September in Saint Petersburg. RSPP invites VNO-NCW to work together on recommendations for this meeting, e.g. in the field of climate change, trust in the financial system and other issues.
Minister Dijsselbloem had as Chair of the Euro-group a large personal influence on the group’s recent decisions. It shows how important persons are in decision making.
1. Theme: Energy strategy of Russia and co-operation with Dutch companies
Question:
How can Dutch companies contribute to a successful implementation of Russia's energy strategy, and in which particular areas of new technology?
Shell, Mr Jorma Ollila
Remarks
The Project Delta Group PDG has set up a dialogue with OAO Gazprom, based on the concept of pre-competitive cooperation among Dutch companies. The aim of this dialogue is to explore the possibilities to make the combined Dutch knowledge and know how available for the development of the Russian energy sector and to create synergies.
Gasterra, Mr Gertjan Lankhorst
Dutch businesses, knowledge institutes and universities have valuable knowledge available for the sustainable development of Arctic natural resources. This ‘golden triangle’ could be valuable also in the Russian situation.
Royal HaskoningDHV, Mr Erik Oostwegel
Dutch companies can contribute to the growth of the Russian offshore industry, specifically for future developments in the Arctic and sub-Arctic region.
Heerema Marine Contractors, Mr Jan Pieter Klaver
Dutch Marine Contractors are ready to become involved in various energy and marine related developments such as Yamal, Kara Sea and Sakhalin.
Van Oord, Mr Pieter van Oord
One important element of the energy strategy is developing export markets. Russian companies intend to establish a large crude terminal in Rotterdam to achieve a global benchmark price for Urals.
Port of Rotterdam, Mr Hans Smits
Further growth of the Russian - Dutch energy corridor and increased co-operation can well be part of the wider energy strategy of Russia.
Argos, Mr Peter Goedvolk
Further cooperation between Gazprom and independent gas infrastructure companies such as Gasunie, can facilitate new gas flows to northwest Europe.
N.V. Nederlandse Gasunie, Mr Paul van Gelder
President Putin
I am satisfied with the co-operation with Dutch partners in the sphere of energy. Two specific challenges now are: to produce hydrocarbons that are difficult to recover, or that are located in areas without available infrastructure.
Creating synergies between Russian and Dutch companies means joint comprehensive work. To create platforms in the Nordic areas demands many different types of knowledge that are needed simultaneously. More co-operation means more technology availability and more tax collection.
In the field of nuclear energy, Russia is a very strong player. This sector demands all kinds of technologies; in some of them the Netherlands are very strong, such as electronics.
Deputy Prime Minister Arkady Dvorkovic
Russia has a special tax regime for off shore, remote projects and virtually depleted fields.
Co-operation between Russian and Dutch companies in third countries may also provide interesting perspectives. Co-operation may be interesting in the fields of energy efficiency, nature conservation and public utilities.
Lukoil, Mr Vagit Alekperov
Lukoil is active in the Netherlands in various sectors, in retail and in wholesale. Lukoil has a terminal in Rotterdam and it is in talks with Rotterdam port to expand its capacity. To that end infrastructure is needed, e.g. for the import of diesel. The refineries in Russia produce large quantities of diesel, a.o. for the Central European market.
Gazprom, Mr Alexey Miller
Shell is a very good partner of Gazprom. Sakhalin LNG is one of the most profitable projects worldwide. Gasunie is also a reliable partner in Nordstream. We are working now on a new string to the UK, which implies that the Netherlands would become a transit country to bring gas from Germany to the UK. Southstream is established in the Netherlands.
Participation in the dialogue in Brussels on the third energy package is important.
JSC Sovkomflot, Mr Sergey Frank
Sovkomflot did a successful project with Van Oord in 2012, moving the heaviest object ever. The Russian navigation and the Dutch nautical schools are very good. There is a lot of experience in the Nordic regions available.
Summa Group, Mr Zyavudin Magomedov
Summa Group is involved in an important project to promote the use of LNG as fuel for ships. This is much more environmentally friendly than conventional fuels. In 2015, an agreement on this issue will enter into force. This project would need the support of regulators, flexible incentives could be very favourable.
Prime Minister Rutte
We must work together to promote all these activities. The Netherlands wants to create an environment in which companies can easily work together.
2. Theme: business climate and investments
Question:
What is being done in the Russian government to further improve the predictability of the business environment?
AKZONobel, Mr Ton Büchner
Deputy Prime Minister Dvorkovic
Russia has achieved good results in improving the tax administration. According to the World Bank, Russia gained many points and the tax administration is now better than in the US and Germany. Russia will go over to IFRS in 2015.
This year, the legislation will be amended to introduce European type courts.
Presidential Commissioner for Entrepreneur’s Rights Mr Boris Titov
The Commission on Entrepreneur’s Rights is a new organisation. In the first few months a number of problems have been notified to it by Russian companies, but there have been no complaints of foreign companies. The Commission will continue its work. A separate task of the Commission is to defend the rights of Russian companies abroad. The Netherlands want to attract FDI. It is important to create an international organisation to protect FDI.
Russian Direct Investment Fund, Mr Kirill Dmitriev
The Fund wants to attract FDI to Russia, e.g. from Philips and Atradius. The production of insurance should also be reinforced. Dutch companies could do more, the growth percentages in Russia are high.
NLMK, Mr Vladimir Lisin
The Netherlands remains an attractive investment destination.
Prime Minister Rutte
The Netherlands wants to attract FDI and is committed to reducing red tape. It also wants to stimulate Dutch investment in Russia.
Minister of Foreign Trade Lilianne Ploumen
Dutch companies are very active in Russia. The Dutch government and my ministry want to promote foreign trade and foreign investment and to encourage and support the international activities of companies.
Remarks
The steps undertaken by the Russian Government to improve the investment climate, and namely liberalization of the working permit process, changing the licensing process in the engineering and construction area, and internationalization of the engineering standards and norms are highly appreciated by the international business community. Other comparable initiatives could further improve the business climate.
Tebodin, Mr Pieter Koolen
Mr Van Houten thanked the President for the progress realised in Russia. Innovation will make the business environment more dynamic. International co-operation is crucial to promote innovation. Global industrial companies can be encouraged to introduce their latest R&D and technology in Russia and collaborate with Russian fundamental science and engineering talents, if the Russian government leverages its procurement power as a launching customer, e.g. in the field of nuclear medicine. Philips could invest in Russia to make it an export hub for nuclear medicine.
Philips, Mr Frans van Houten
KLM and Russian carriers could develop and implement, with the support of the civil aviation authorities of both countries, a plan to accommodate the growing needs of both the passenger and cargo markets. Increased transport facilities will boost economic growth.
KLM, Peter Hartman
ING is established in Russia since 1993. The Russian economy is now very much reliant on oil and gas and raw materials. A further diversification, and development of SMEs, would encourage further growth. ING would like to contribute to further growth.
ING, Mr Jan Hommen
Positioning Moscow as an international financial centre will positively impact on the business environment. KPMG is willing to play a role in this process
KPMG, Mr Jurgen van Breukelen
President Putin
Agreements in the air transport sector will not only depend on the Netherlands’ dimension, as KLM is not only a Dutch company. Reciprocity in this sector is a very important principle. The Question: is what companies get in return. We should work on a favourable discussion in a sphere of partnership.
In the last 12 – 14 years the Russian financial sector has strongly developed. In order for a financial centre to develop in Moscow, the whole financial system in Russia must be good, transparent and reliable. The rouble zone in the post-Sovjet countries is now a reality. The trade of Belarus is for 60-80% in rouble. The support of a highly qualified company as KPMG to contribute to the Moscow financial centre is highly appreciated.
Mr Alexander Shokhin, RSPP
The requirements for banks in Russia are now very strict. Basel III has been introduced faster than elsewhere and the criteria of the Russian Central Bank are stricter than Basel III.
3. Theme: infrastructure development
Question:
APM believes in the future growth of Russia and has made large investments in port infrastructure. What role could Dutch investors play in the process of developing and modernizing Russia’s transportation infrastructure?
APM Terminals, Mr Kim Fejfer
Remark
Boskalis has now 1100 operational vessels all over the world. Public Private Partnerships could play a role in future marine infrastructure works, such as the Taman Port.
Boskalis, Mr Peter Berdowski
President Putin
PPPs are the most promising modality for development; they can be realised everywhere, except in the defence sector. In the US the investment position is different, foreign companies cannot buy shares in ports there.
Deputy Prime Minister Dvorkovic
A new law on PPPs is in the making. The amendments are now being submitted to the Duma.
Russia is now working on new port facilities, a.o. in Taman. The ports in the arctic region should be further developed, as should be the airports. To this end public funds as well as private investments are needed. Also in these domains, concessions are possible. Russia would also like to co-operate to develop new transport facilities, such as high speed trains.
4. Theme: development of the agricultural sector and improving public health
Question:
How can Dutch companies contribute to improving public health?
Companies like DSM can partner and share experience with the Russian government in implementing the healthy nutrition legislation and reducing vitamin deficiencies.
DSM is also producing biofuels in Russia.
DSM, Mr Feike Sijbesma
Remark
Heineken has now made € 1.6 billion investments in Russia. The Russian government could consider to define an excise policy for alcohol that shifts consumption patterns to lower alcohol content beverages. Heineken has experience in advising governments on alcohol abuse policies. There is a protracted dialogue in Russia on this issue, but a more constructive approach and more trust is required in the process. Heineken would very much appreciate if the dialogue could go forward in a constructive mood.
Heineken, Mr Jean-François van Boxmeer
Question:
How can Dutch companies contribute to the development of the Russian agricultural sector.
In the Netherlands there is traditionally a close co-operation between the government, business and universities in the so called ‘Golden Triangle’. It has been effective to further develop the agricultural sector and value chain. On the basis of this concept a tailor made integrated package for the agricultural sector could be developed in close co-operation between Dutch companies and authorities and the Russian authorities
FrieslandCampina, Mr Cees ‘t Hart
Remarks
Food security and sustainable sourcing are very important. How does Russia intend to make its agriculture more sustainable? With the help and experience of Dutch companies a sustainable sourcing approach could be introduced into mid- and long term Russian agricultural policy, for example with regard to sunflower oil. This could contribute to sustainable food security.
Unilever, Mr Paul Polman
Developing local supplies for agro-food industries such as Farm Frites’ new high tech farm, including a development program with local farmers, will contribute to Russia’s food security. Agrofood companies need high yield potato harvests. To that end it is important that import policies on seed potato varieties from Europe and customs fees on potatoes are aligned with this aim.
Farm Frites, Mr Piet de Bruijne
President Putin
Agriculture and health are among the most important areas of co-operation. What are the problems in the beer sector?
Heineken, Mr Jean François van Boxmeer
The key problem is the level playing field and the burden of regulation. Russia is moving from a very liberal system to a very restrictive system. Heineken supports the aim of limiting alcohol abuse. However, there are measures that can be accommodated by the brewers (such as rules on the size of bottles) and measures that could create large problems (such as prohibiting PET bottles).
President Putin
We should limit alcohol abuse and protect the Russian citizen. The Scandinavian alcohol policies are much stricter still.
Co-operation in the agricultural sector offers appealing perspectives. Russia would like to make use of the possibilities. Especially processing technologies are needed. According to the WTO accession protocol, Russia may spend $ 9.6 billion on agricultural subsidies; the actual level is much lower, around $ 4.5 billion. Thus a further increase is allowed and Russia intends to make use of this possibility. We will do everything possible to encourage our partners to transfer production to our country. We want to produce not only food, but also new biofuels.
Heineken is a well respected company that invested a lot in Russia. We welcome you.
Prime Minister Rutte
The Prime Minister thanked the Russian and Dutch CEOs for their presence in large numbers and their valuable and frank and constructive contributions to the dialogue, and President Putin for his important and constructive answers. This is a good basis for the future development of our bilateral economic relations.
President Putin
The President thanked the host and the CEOs for the very careful and attentive reception. He really appreciates the economic relationship with the Netherlands. There is high tech and there is friendliness. It is clear that the Dutch business community wants to co-operate with us.
The audience applauds for the President.
List of participants
From the Dutch side:
H.E. Mr. Mark RUTTE - Prime Minister of the Kingdom of the Netherlands
H.E. Mr. Henk KAMP - Minister of Economic Affairs of the Kingdom of the Netherlands
H.E. Ms Lilianne PLOUMEN - Minister of Foreign Trade and Development Cooperation of the Kingdom of the Netherlands, Chairman of the Dutch side of the JEC
H.E. Mr Ron KELLER - Ambassador of the Netherlands to the Russian Federation
Mr Jack TWISS QUARLES VAN UFFORD - Foreign Policy and Defence Advisor of the Prime Minister of the Netherlands
Mr Stefan SCHROVER - Director Government Information Service
Mr Peter BERDOWSKI - Chief Executive Officer Royal Boskalis Westminster N.V.
Mr Jean-François van BOXMEER - CEO Heineken N.V.
Mr Jurgen van BREUKELEN - CEO KPMG
Mr Pieter de BRUIJNE - CEO Farm Frites
Mr Ton BÜCHNER - CEO AKZO Nobel
Mr Paul van GELDER - Chairman of the Executive Board and CEO N.V. Nederlandse Gasunie
Mr Peter GOEDVOLK - CEO Argos
Mr Jan Peter KLAVER - CEO Heerema Marine Contractors
Mr Gertjan LANKHORST - CEO GasTerra
Mr Jorma OLLILA - Chairman of the Board of Directors Royal Dutch Shell Plc
Mr Pieter van OORD - CEO Van Oord N.V.
Mr Erik OOSTWEGEL - Vice-Chairman Board of Management Royal HaskoningDHV
Mr Pieter KOOLEN - CEO Tebodin
Mr Paul POLMAN - CEO Unilever
Mr Feike SIJBESMA - CEO Royal DSM
Mr Hans SMITS - CEO & President Port of Rotterdam
Mr Kim FEJFER - CEO APM Terminals
Mr Cees ’t HART - CEO Royal FrieslandCampina
Mr Peter HARTMAN - President & CEO KLM Royal Dutch Airlines
Mr Frans van HOUTEN - CEO and Chairman of the Board of Management and Executive Committee Royal Philips Electronics
Mr Jan HOMMEN - CEO ING Group
Mr Bernard WIENTJES - President Confederation of Netherlands Industry and Employers VNO-NCW
Mr Winand QUAEDVLIEG - Deputy Director International Economic Affairs Confederation of Netherlands Industry and Employers VNO-NCW
From the Russian side:
H.E. Mr Vladimir PUTIN - President of the Russian Federation
H.E. Mr Arkady V. DVORKOVICH - Deputy Prime Minister of the Russian Federation,
Deputy Chairman of the Government of the Russian Federation, Chairman of the Russian side of the Joint Commission on Economic Cooperation between the Russian Federation and the Kingdom of the Netherlands (JEC)
H.E. Mr Yury V. USHAKOV - Aide to the President of the Russian Federation
Mr Dmitry S. PESKOV - Deputy Chief of the Presidential Executive office, Presidential Press Secretary
H.E. Mr Roman A. KOLODKIN - Ambassador Extraordinary and Plenipotentiary of the Russian Federation to the Netherlands
H.E. Mr Andrey R. BELOUSOV - Minister of Economic Development of the Russian Federation
Mr Boris Y. TITOV - Presidential Commissioner for Entrepreneurs’ Rights
Mr Vagit Y. ALEKPEROV - President LUKOIL
Mr Mikhail D. BALAKIN - Chairman of the Board of Directors SU-155
Mr Viktor F. VEKSELBERG - Chairman of the Board of Directors of Renova Group, President of the Skolkovo Foundation
Mr Kirill A. DMITRIEV - CEO, Russian Direct Investment Fund
Mr Alexander V. DYUKOV - President, CEO Gazprom Neft
Mr Vladimir P. YEVTUSHENKOV - Chairman of the Board JSFC Sistema
Mr Alexey I. ISAIKIN - President, Volga-Dnepr Group
Mr Vladimir S. LISIN - Chairman of the Board of Directors NLMK
Mr Ziyavudin G. MAGOMEDOV - Chairman of the Board of Directors Summa Group
Mr Alexey B. MILLER - Chairman of the Board of Directors of JSC Gazprom
Mr Konstantin Y. NIKOLAEV - General Director N-Trans Group
Mr Igor I. SECHIN - President, Chairman of the Management Board, Rosneft
Mr Sergey M. SOKOL - General Director RT-Khimkompozit
Mr Sergey O. FRANK - President and CEO of JSC Sovcomflot
Mr Airat N. KHAIRULLIN - President of National Dairy Producers Union
Mr Alexander N. SHOKHIN - President of the Russian Union of Industrialists and Entrepreneurs
Mr Vitaly I. USUPHOV - President, Nordic Yards
Mr Vladislav V. PAVLOV - Head of Section of the First European Department, Ministry of Foreign Affairs of the Russian Federation (note-taking)