Results of the year and prospects of the Russian engineering market

02 Apr 2018

We present to our readers a large article devoted to the results of 2017 and the forecast for 2018. In this article, experts from Giacomini, Hajdu, Fondital, Navien Rus, REHAU, Viessmann, MTS, GC Termoros express their opinions on the situation on the Russian market.

Speakers from the listed companies were asked to answer a number of questions. What technological trends can you name the main in the segments covered by your company? What are the reasons for the emergence and development of these trends? What can you say about the dynamics of consumer preferences? Which way are they moving? What consumers lose interest in, what they get interest for and why? How has the purchasing power of the consumer changed? What happens to the demand for equipment and services in general, and what, in your opinion, are the reasons of it?

We asked specialists to assess the prospects of the Russian market from the point of view of business development and asked if their opinion changed over the past year. Asked to answer the question: "Has the business climate became better in terms of production and trade?".

In the list of market nuances that interested us, there was also the influence of regulators - we suggested industry professionals to tell us what they, as representatives of business, would like to advise the domestic branch executive and legislative authorities. Specialists were also invited to evaluate changes in the regulatory and legal Russian base, which occurred recently. In this context, they were asked a question: "What was positive, what was negative, and what has not been done at all (and how should it be done)?".
We also asked the experts to forecast the development of the market segment in which they work, assess the performance of their company in 2017, name the achievements that they consider key in the business in general and in the technological and product aspects, and also talk about their organizations' plans for the coming year.

Andrey Mikhaylenko, head of the Giacomini S.p.A Representation Office in Russia

One of the main trends in the segment of internal engineering systems of buildings is still the desire to save energy. In Russia, this is expressed by the development of the market of control valves, units for individual heat and water accounting, metering devices. In Europe, where our company also works, the technologies of "green" energy on the basis of renewable energy sources and the control devices of such systems become common.

Speaking specifically about consumer trends, there is a trend in the development of tools for managing systems at the user level – you can see the beginning of mass integration of the components of heating and air conditioning systems in the general management system of the "smart house" at the household level. This includes the use of common controllers with intuitive control, and connection to the Internet for remote control and programming of the system, either via a web page organized by the controller or through specially designed applications.

When connecting system components, wireless communication channels are used more and more, which is certainly of interest to the consumer, since it does not require wiring, the cost and complexity of installation and adjustment of equipment reduces.

Against the backdrop of growing education and demands of consumers, unfortunately, its purchasing power is reducing. And this is true not only for the population of the country, but also for corporate customers - builders, developers, installers. The competitive environment and economic situation dictate the need to reduce the cost of housing offered on the market, and this forms a certain demand for both cheap equipment of not the highest quality and simplification of typical systems for buildings and structures.

It’s good when the manufacturer can find some compromise, reducing the cost of equipment without quality loss, as, for example, Giacomini does, releasing a series of economical balancing valves or a line of collector units for heating and water supply with recordings in each flat, where smaller valves are used. It's sad to see that many other manufacturers, on the contrary, are changing quality fixtures to components of questionable quality, often produced in Southeast Asia, in order to reduce the cost of equipment. But our company has never been and is not a supporter of such methods of competition. We try to keep our good name and develop, improving the quality and manufacturability of our products. And we succeed.

In 2017, Giacomini continued growing in the Russian market, fixing it in two-digit terms - both in turnover and in the amount of equipment supplied. Most importantly, this has been a steady growth over the past few years, which underlines the strong position of Giacomini and the attractiveness of our products for customers, even in conditions of complicated market and an unstable economic situation. Perhaps this is the key achievement for us. It is also gratifying that the growth rates in strategically important areas for us are growing at an accelerating pace: in groups of balancing valves, thermostatic regulation of heating appliances, PE-X pipelines.

Assessing our prospects and trends in the business environment, we try to be realistic. In our opinion, in 2018 the market in Russia will certainly not grow, but, on the other hand, we hope that there will not be a slump. The market expects instability, the resources of customers will be limited. Consequently, competition will intensify again, where the producers that possess a wide range of quality equipment, flexible price policy and the ability to quickly transformation in accordance with market requirements will be the most capable. This means that Giacomini has everything it needs to continue its growth in 2018. We will please our partners and customers with new equipment and new projects, but to keep the intrigue, we will not lay our cards on the table for now.

Alexander Semyonov, General Director of the representative office of Hajdu

According to the results of 2017 ,Hajdu, as in the last five years, has seen a steady increase in demand for indirect water heaters and buffer capacities. As in past years, the consumer still gives its preference to professional boilers and buffer tanks of European production. This is due to the desire of the end user to use professional energy-efficient equipment that allows not only to quickly heat up, but also to keep heat as long as possible, saving energy that is constantly growing in price.

Last year Hajdu completely rebuilt its production for the production of energy-efficient equipment, corresponding to the latest ErP directives in the European Union, which came into force on September 26, 2017. From the second quarter of 2017, Hajdu produces and supplies only equipment that meets the requirements of ErP. Last year, Hajdu company completely removed from its assortment the equipment, the energy efficiency class of which is lower than C. This allowed to attract greater interest to the equipment of those customers who in the crisis years try to reduce their costs for utility payments, and, as you know, the number of such people increases every year.

Over the past few years, Hajdu has replaced a number of production equipment with a more technological ones, which allowed to cut production costs and reduced the cost of the produced equipment, making it more interesting for consumers. The use of new technologies and materials shortens the time of production of the company, without getting away from the four-step quality control system used by Hajdu, which is labor-consuming, but still allows the production of equipment with consistently high quality.

Professional glass-enamelled indirect water heaters still take the main share of the production in our company. On the Russian market Hajdu supplies boilers and buffer storage under two brands - Hajdu and Aquastic. Over the past few years, these two brands have become recognizable and popular in Russia. We believe that in many ways this was facilitated by a properly selected line of equipment. In the line Aquastic there is domestic equipment that perfectly fits into any, even budget estimates and will perfectly cope with its tasks. The Hajdu line mainly presents equipment with unique features - for example, a compact high-capacity 120-liter boiler with the capacity of a 300 liter boiler, or boilers up to 1000 liters with one or two heat exchangers and the possibility to install up to two heaters, a ventless gas boiler, patented by Hungarian developers that does not have any analogues. The Hajdu line also has a water heater with a heat pump of energy efficiency class A, which is of great interest to those customers who prioritize energy efficiency of the equipment and the possibility of using it with renewable energy sources.

In a competitive environment of 2017, we did not see any specific pressure from the point of view of the release of new, more interesting products by other manufacturers of water-heating equipment. It is worth noting that many of the manufacturers still continue supplying the Russian market with cheaper equipment that does not comply with the ErP directives and is banned from sale in the EU.

In recent years, the consumer has begun to make more detailed comparisons between equipment and more often reveals the marketing moves of a number of manufacturers, attracting clients only with low prices and not focusing on insufficient performance and low capacity of the equipment.

Recently many of the consumers pay a lot of attention to the equipment assembly, and in this case, the company Hajdu has fully justified the trust of its customers, equipping the equipment with everything necessary, which makes it possible to connect it to any systems of warm water supply without any problems. To date, it's not a secret for anyone that automatic control of heating and safety valves is a considerable part of the cost of equipment, so the consumer prefers the most complete models when making the choose.

Less and less people prefer monobrand boiler stations. This is due to a natural desire to save money. Again, it's no secret that many manufacturers of boiler equipment, for example, do not manufacture water heaters and place orders for the production of boilers at third parties. Thus, the cost of the boiler, due to the added cost of boiler manufacturers, can sometimes double.

In particular, Hajdu also manufactures equipment under brands of its customers for famous German and other European manufacturers of boiler equipment. In our opinion, the tendency to go away from monobrand boiler houses has also influenced the increase in demand for Hajdu equipment.

Many of the customers who want to buy a boiler with a stainless steel tank in recent years are actively tending towards boilers with a glass-enameled tank from a professional manufacturer, seeing in it the best option with a more interesting price and with an identical warranty program from the manufacturer. The concept of "stainless steel", in our view, is gradually becoming a thing of the past. This is due to the dispersion of the illusion of stainless steel as an "eternal material". Recently, stainless steel has been increasingly used in everyday life as a material with a characteristic steel sheen, and not as a material with high anticorrosive characteristics, and this has its own explanation. In the EU countries there is a restriction on the production of stainless steel, so almost all manufacturers of metal-consuming equipment prefer to use Asian analogues of this material. The difference in standards and the criteria for the produced material made it more vulnerable in terms of its anticorrosive characteristic.

I would like to note the increase in demand for some commodity groups - for example, such as electric water heaters. We are confronted with the fact that owners with experience of using water heaters of Asian production, when replacing equipment give their preference to more expensive European equipment more often. This choice is due to the fact that the money invested in the equipment allows you to forget about the replacement for a long time and save on repeated installation and dismantling of equipment.

We estimate the market of water-heating equipment in Russia as very favorable and promising. Dynamic business development in our case is facilitated by the correctly chosen strategy. The key to success is also the mutually beneficial cooperation with the main players on the market of heating equipment, which prefer to include in their assortment only quality and time-tested equipment of European production.

The company Hajdu constantly studies the demand of consumers and modernizes the equipment taking into account all the latest trends and user wishes. We believe that only in this way it is possible to develop and step forward in crisis and post-crisis times.

The influence of the authorities on the business of water-heating equipment during 2017 was not observed. Of course, we would like to see a program for stimulating the use of energy-efficient equipment at the state level on the territory of the Russian Federation. This would protect consumers from buying inefficient equipment and, as a result, reduce the consumption of natural resources. This would also have a positive effect on the ecological situation on our planet - the emission of harmful substances into the atmosphere that make up a significant part of the greenhouse gases would be reduced. The reduction of the amount of greenhouse gases will help keep the heat balance of our planet.

At the end of 2016, Hajdu is one of the leaders in the segment in terms of the number of sold water heaters and buffer storage in Russia. In 2017, our company came with a steady increase in sales throughout the year. Last year Hajdu managed to achieve the goals that it set.

It is impossible not to mention the economic situation in Russia. In 2017, currency fluctuations were reduced to a minimum, which also contributed to an increase in purchasing power and a more stable demand for equipment. The decrease in the rate of inflation allowed the construction of a number of frozen facilities to continue, and at the end of the last year, many organizations purchased equipment and handed over "frozen" projects.

We do not stop there. The following year, Hajdu - as well as in previous years - planned to increase sales and outlined the direction of development for the most interesting commodity groups from the point of view of consumer demand.

Paolo Murga, Commercial Director of Fondital S.p.A.

Among the new technological trends, first of all, we would like to highlight the context of renewable energy sources (RES) in light of protecting and preserving the environment. In this direction innovations in the field of creation of heat pumps are presented. DHW and heating are possible when using only RES or low-inertia heating systems. An important step forward, made by Fondital, is, of course, innovative technologies. The goal is to offer more innovative products that include intuitive interfaces that help make the use of equipment more comfortable.

The reasons for this evolution can be traced in the new UN directives, which are of fundamental importance not only for Europe, but also for global changes in other markets. Greater sensitivity and attentiveness to purposes related to the preservation of the environment is our first priority. Finally, further motivation may be the emergence of a smart consumer who is interested in understanding the functional significance of equipment and is distinguished by the ability to use it. As for market trends, we can now note two trends in development: an increase in the market share of the mass construction of houses with quartered heating, which requires specialized low-cost solutions designed for low-inertia heating systems, and the further development of the market of heating systems for private houses.

These are two fundamentally different segments of the heat engineering market, which often present conflicting requirements to the product. So, for example, if for the first segment the cost of the boiler and its adaptability to work in heating systems with a small volume of the heat carrier and a small load in the heating mode comes to the fore, the second segment requires the presence of equipment with wide possibilities for automation of the heating system, increased reliability and the possibility of remote control of the heating system, as well as integration with "smart home" systems. It should be noted that the company Fondital pays close attention to these segments and is working fruitfully to create and develop new models of boiler equipment that can meet many different needs.

In general, the market is changing very quickly, and in order to meet the quality and price requirements of customers, our company constantly develops a range of products, both from a technical point of view and in terms of the purchasing power of the consumer. Over the past few years Fondital has developed special products for the Russian market, maintaining the highest quality standards and improving the price/quality ratio.

The opening of a plant in Russia is the next step, confirming our serious actions and intentions to develop and invest in the Russian market. Only direct presence on the market will allow us to keep an eye on the pulse and quickly respond to its requests.

Fondital is present and has been operating in Russia for more than 25 years. In the light of the historically established friendly partner relations in the sphere of economy and trade that unite the Russian Federation and Italy, we are firmly convinced of the positive prospects for the development of the Russian market in the heating equipment sector.

A concrete proof of confidence in the future of the Russian market is the investments that Fondital makes, building its first plant in Russia. With an initial investment of more than 25 million euros, our company will create 150 workplaces for the production of boilers and radiators with a technological and quality level, adapted to the expectations of the Russian market.

As for the results of Fondital's activities, if compared with the results of 2016, the 2017 was a positive period. However, we have not yet achieved the results that we had before the crisis. A positive trend is related, among other things, to changes in the range of products, the release of new commodity items developed specifically for the Russian market. It is also related to the results of the commercial strategy for working with regional partners. We will continue to go forward thanks to the development strategy developed with our partners in Russia. Our partners promote products through priority channels for us - among installers and retailers.

The opening of our production site in Lipetsk will provide the same level of quality as Made in Italy, will shorten the delivery times that the market requires and improve logistics - it remains a fundamental factor in the development of Fondital in Russia. In addition, the company will continue to invest in the technological development of products for the Russian consumer in order to create increasingly efficient heating systems in Russia.

During the whole period of our work in Russia, we followed closely and with interest the initiatives aimed at improving the climate for investment in the country, and we are sure that both local authorities and the government are totally aware of the challenges that Russia is waiting for in the coming years. We have repeatedly been convinced of the constructive nature of decisions made by representatives of the executive authorities, as well as in their attentive attitude to the needs of companies, and this increases confidence in the rightness of Fondital's decision to invest in Russia.

I would also like to note the aspect connected with the Russian legal and regulatory framework. From 2017 to 2018, the market of radiators is influenced by reforms aimed at changing existing rules, according to which the main players operate. To a large extent these reforms are connected with the common problems that our company has faced for many years - unfair competition, dumping and falsification of the technical characteristics of products.

We are confident that the progressive trend of adaptation of the Russian market to the European technological parameters and the development of common standards will be another opportunity for the mutual rapprochement. The latter will only contribute to the development of special solutions for the Russian market.

Kim Taek Hyun, general director of the company "Navien Rus"

The past year has brought the company "Navien Rus" double-digit sales growth, the title of "Nation Brand of the Year" and participation in several major state projects. As part of the "Year of Ecology" in Russia, the product line was updated, which includes new models of electric boilers. Plans of the company for 2018 are ambitious: to keep the palm of the championship, to raise the brand recognition and to sell the millionth wall boiler.



In 2017, the Russian engineering equipment market stabilized, completing the fall caused by the political and economic events of 2014. The volume of sales in the segment of gas heating boilers, according to BusinesStat, fell to about 700 thousand units. Despite not the most favorable business background, Navien Rus managed to achieve 10.8% of sales growth compared to 2016, having sold more than 100 thousand units of production.

According to the sales volume of heating equipment, "Navien Rus" is still at the first place on the Russian market.

Sales growth is largely ensured by the continuous process of modernization and development of production capacities, as well as effective management.  At the previous stage of its development, "Navien Rus" was able to build an effective management system that showed its effectiveness in the conditions of negative trends on the market and allowed to retain the leading positions in Russia in 2017.

In 2018, the demand for heating equipment will gradually increase to pre-crisis levels. Together with the proactive marketing strategy of the company, this will allow Navien Rus to sell its millionth boiler in Russia. No brand has ever sold a million of wall-mounted boilers on the domestic market, which once again confirms the leadership of Navien in this segment. To the historical sale will be timed a campaign for all buyers of Navien boilers, the main prize of which will be a car. The culmination of this event will be a conference in the south of Russia with a grandiose solemn event. The company expects that sales will rise beyond one million already in May-June 2018.

In addition to generally positive economic indicators, the year 2017 was marked by the fact that "Navien Rus" was awarded the "Nation Brand of the Year" award. The Navien brand received the largest number of votes from consumers based on the results of nationwide voting. In total, 250,000 people from all over Russia took part in the voting. People's recognition of Navien is due to the high quality of the equipment, the competitive price and the company's special approach to servicing. And here an important place is taken by the active fight of "Navien Rus" with counterfeit products. In 2017, more than 4,000 non-original spare parts were withdrawn from circulation. All the seized spare parts were physically destroyed, in return, consumers received free compensation for the original Navien parts. Such a policy allowed to improve the quality of service and general impressions of buyers and installation companies of the brand. It should be noted that Navien independently produces all components and spare parts at its own facilities on the plant in South Korea. This production chain allows you to fully control the quality of products, including spare parts.

The status of the "Nation Brand of the Year" reflects the real quality of the company's products. Our merit is that we were able to understand the trends and needs of the Russian market very well and were ready to offer buyers exactly what they needed - neither more nor less.

The year ended under the aegis of the fight for the condition of the environment and was declared the "Year of Ecology" in Russia, which set new goals for the company. The brand Navien has released several new boilers that meet market needs and increased energy efficiency standards. A series of electric boilers EQB and a series of cascade condensing gas boilers NCN are among them. In terms of their parameters, new items are among the best among their competitors.

Did not stop "Naviene Rus" in 2017 in its internal development. The company has four new sales representatives, and the staff in the Moscow office has increased by eight new employees. The latter fact prompted the company's management to decide on moving to a new spacious office, the total area of which is approximately 1000 m2. Mostly, the direction of marketing was strengthened, as plans for 2018 are to increase the presence of the company on the Russian market, increase brand awareness and create loyalty programs for partners. Also much attention will be paid to the support of regional distributors.

We are not going to stop and we plan to only strengthen our positions on the Russian market in 2018. At the same time, the company will pay great attention to the real needs of customers. The leading position is the result of the enormous work of our team, the coordination of the actions of sales representatives and the professionalism of our partners from the installation companies.

Andrey Beloedov, executive director of sales and marketing for REHAU in Eastern Europe

Trends in the production of internal engineering systems are now formed under the influence of global trends. A vivid example is the trend for digital technologies and various "smart" devices, with which modern market players are increasingly equipping their products. The level of "digitalization" is so high that the concept of "Internet of things" no longer seems to us to be something futuristic. For example, if I need to come to my country house, few hours earlier I "warn" the automation, which is connected to the boiler and underfloor heating or radiators. In two or three hours, between the sending of the message and the moment when I cross the front doorstep, the system manages to warm up the building to the set temperature.



While the functionality of the produced solutions increases, their installation and operation, on the contrary, become simpler. Manufacturers do everything possible to ensure that the quality of the installation of communications does not depend on the skills of the specialist and the conditions of the construction site. There are water underfloor heating systems, fixed on thermal insulating mats with the help of sticky tape, and easy to install pipelines, which eliminate the possibility of a mistake when installing them. This is an extremely positive trend, and we support it with all our might.

Moreover, consumers began to pay more attention to the environmental friendliness of building materials and systems. For customers it is important that the purchased products are safe for people and the environment.

It is important to understand that the consumer's preferences are firmly tied to the basic needs of the person, which do not change with time. As applied to housing, this is primarily comfort and safety. What does it mean? Usually, rather simple things: warmth, pipes that do not have a leak, and everything in the house looking beautiful and harmonious. These needs can be fullfilled with modern solutions that by our efforts become basic and form industry standards, such as our developments based on the families of Rautitan and Rautherm S.

In addition, engineering systems are difficult, from a technical point of view, solutions which are not easy to understand for non-professionals. Therefore, developing communication strategy, we operate with understandable categories: "clean water", "warm floor", "economy". If I start talking about automation and remote control, my messages will pass by the target audience. More detailed technical information customers usually get from the installers of our club REHAU.PRO, who have been and remain our main "technology providers" in the country.

When we talk about consumer preferences and try to understand the client, we always need to take into account the circumstances in which he/she lives, dreams and makes decisions. One aspect of today's realities is not the best consumer's financial position. That means that due to the economic factors, preference is given to basic products with a lower cost. A person who has lived through several crises cannot be changed - he will always look for the cheapest options. But, fortunately, now even very economical consumers are becoming more responsible and start to understand that in construction, fixing errors is more expensive than not initially allowing them. Demand shifts towards better products, which is confirmed by a decrease in sales of inexpensive goods in DIY-hypermarkets.

Even though the consumer in Russia is specific, and the market is not ideal, we consider ourselves as sensible optimists and believe in it. We see in it many directions for work. Especially promising from the point of view of business are developing industries and spheres related to import substitution and localization of production: agriculture, healthcare, automotive industry, defense industry, information technologies.  You can add construction to it, where the business climate over the past year has become warmer. This is mainly due to the implementation of state projects on a federal scale (preparations for the World Cup 2018, development of the Far East, etc.). Their financing has not stopped, which means that the business connected with the construction projects will always have prospects.

The localization of production by foreign companies in Russia has become a global trend. The manufacturers of engineering equipment, automobile concerns transfer their production to us. We now build another warm warehouse, expand the areas for the preparation of equipment and add a logistics infrastructure on our plant in Gzhel. We are sure that these investments will pay off.

By investing significant funds in business development on Russian soil, we hope that the state will continue to initiate large-scale construction projects, thereby setting the development vector for the entire industry. From the position of the representative of business, I wish that the words about reducing pressure on business do meet the actions, and all sorts of checks really become more organized.

Support for companies developing their business in Russia can also be provided by changes in the field of the system of standards . They are some, and they all benefit the industry. Of course, we want all obsolete Soviet GOSTs and SNiPs to be immediately aligned with modern realities (or better - with European standards), but it is obvious that this is an enormous layer of work that will take more than one year. We take actively participate in this process through various trade unions. In engineering systems it is ABOK, windows - the Union of Producers of Polymer Profiles (PPSP) and the National Window Union.

In order to avoid negative consequences for the consumer because of controversial issues in the regulatory framework, our company also raises issues of sectoral self-regulation. In engineering systems, we set high standards in cooperation with our partners: Grohe, Grundfos, Vaillant, Kermi. Together with the portal Forumhouse.ru we also developed and launched a training course in the online "REHAU Academy". Together with partners from the Big Three (G3) - AGC and Roto - we developed and implemented the "system passport of the window" - an effective quality control tool widely used in Western Europe. Unlike the certification system existing in our country, which focuses only on certain characteristics of components, the system passport informs the end user in detail and objectively about the characteristics of the purchased constructions. We hope that, having such a guideline, customers will be able to avoid making mistakes when choosing windows.

Our plans - tactical and strategic - we make with an eye on the vision of the future of the Russian market. In our opinion, there won’t be any serious outbursts on it. Most likely, the trends that determined its development in 2017 will dominate.

At the same time, we are full of healthy ambitions, conditioned by our objective capabilities. REHAU always plans to grow faster than the market. In practice it’s around 10-15% of the last year. It is quite realistic to reach such figures, because we have unused potential: we intend to strengthen work with DIY-channels and continue to strengthen on the object market, going to "big construction sites". In addition, we initiated several online projects together with major repair aggregators to offer our solutions also through them.

To improve business efficiency, we also intend to rebuild our organizational structure and pay more attention to digital technologies for more effective interaction of employees within the company. Our immediate goal is to enter the TOP-50 of the best employers of Russia by the end of 2017 and to rise every year in this rating.

We are happy with the financial indicators of the year-we even managed to beat the target. In 2017 REHAU products became the most sold not only in the window segment, but also on the pipe market. According to the agency Profi Online Research, more than 62% of the population knows our brand in the category, which I think is a huge success, especially considering its specifics.

To strengthen the leadership in retail, we have expanded the number of sales channels. If before to purchase REHAU engineering systems, the final user had to contact one of our partners, now you can buy everything you need online at our online store shop-rehau.ru. Soon we want to open a show room next to the pickup point, where the whole range of engineering solutions of REHAU and partners will be demonstrated.

On the object market, we also have many reasons for pride. In 2017, we equipped with lawn heating systems 12 stadiums and training grounds as part of the preparation to the World Cup 2018, and also strengthened partnership with the leading Russian developers, including LSR Group, Donstroy, YIT, etc.

And, of course, we cannot fail to note our joint work with installers, which reached a new level. In particular, in 2017 we established and awarded the first professional award in the field of installation of engineering systems REHAU "Installer of the Year". Designed as an Oscar for pipe specialists from the REHAU.PRO club, it attracted several hundred participants who presented more than 500 projects to the jury. The solemn awards ceremony was held in Moscow and five other cities: Minsk, St. Petersburg, Krasnodar, Yekaterinburg, Samara. Between them and the capital a space bridge with a possibility of live broadcast was established.

Marius Schubert, CEO of Viessmann

The main trend is the movement of the heating production sector towards maximum efficiency and "digitalization". The rapid development of digital technologies has a significant impact on both society and the economy. And today we - manufacturers and specialized installation companies - are standing on the verge of significant structural transformations. The focus is on digital solutions with interactive possibilities for communicating with their final customers, energy management systems, boiler monitoring systems, etc. Our company pays much attention to these trends and takes decisive actions to jointly use modern digital technologies.



Together with the market, consumers are also changing. It is impossible to deny the fact that they are becoming more mobile in all spheres of life, constantly online, exchanging data. And this cannot but affect technological trends: products are supplemented by mobile Internet services.

Another very actual topic is systems for automation of operation of the equipment, so-called "smart" solutions, also through remote control using Internet. Especially such services that provide a comfortable climate in the house. For example, in private houses about two thirds of the rooms are heated without any need or in the wrong mode. And solutions such as ViCare Smart Climate help to solve this problem, providing an economical and comfortable mode of heating individual rooms.

Another important consumer trend is that Russia is slowly but surely moving towards condensation technology. At the same time, the active development of this direction is hampered by a higher price for the equipment than for the traditional models, and the consumer in the last few years has become particularly sensitive to the price of goods. Yes, there is a myth that a condensing boiler is not really worth it in Russian conditions - gas prices are not as high as in Europe. But even now the difference in cost between traditional and condensation (considering the individuality of calculations) is leveled in two to five years, depending on the equipment class.

Speaking about the business climate in Russia in general, it should be noted that the Russian market has great potential and a high demand for innovative, energy efficient and reliable heat generation systems. There was a decrease in demand, caused mainly by the recession, many projects, including in the area of housing and communal services and commercial construction, were put on hold due to lack of funding. However, we are now seeing positive dynamics and expect a gradual return of demand to the pre-crisis level. The company Viessmann considered earlier and still considers today the Russian market as strategically important and promising. That is why in 2015, at the height of the crisis, it was decided to localize the production of industrial hot water boilers for the Russian market in Russia. Already in November, the construction of the plant began, in January this year permission was received for commissioning, and in March the first ready-to-sell boilers were launched. And we are sure that the decision was right.

In addition to business aspects, when you conduct business in Russia, you should also take into account the regulatory component. Since summer 2014, Russia is actively promoting the policy of import substitution, and the Ministry of Energy annually raises the minimum level of the required level of localization. With the help of these initiatives, Russia is trying to increase its domestic production and reduce the risk of dependence on third-party suppliers.

Measures such as infrastructure development, provision of tax incentives in support of localization, development of special economic zones and other market stimulation strategies were very effective and undoubtedly contributed to the progress in improving the country's investment climate.

But there are also negative moments: often the country lacks not only production equipment, but also necessary technologies and products that require innovative solutions.

Another of the fears within the import substitution policy is that new rules will be introduced by the Russian government that discriminate market participants who have already invested in the Russian Federation, restrict competition or create bureaucratic obstacles.

It is extremely important for the state to create conditions for long-term investment. First of all, it includes the reduction of bureaucracy, corruption and the strengthening of professional education.

Now - about our results. The past year 2017 was successful for Viessmann not only in the world, but also in Russia. First of all, it was a jubilee year for our company, in which Viessmann stepped forward with the slogan "Together in the new century", once again emphasizing the importance of close cooperation with our partners.

In April 2017 Viessmann opened its Research Center with the participation of German Chancellor Angela Merkel. For the 14th time in a row, the company was recognized as the "Partner No. 1" in Germany, and the wall condensing gas boiler Vitocrossal 100 CI1, presented in March at the ISH'2017 exhibition, became the best in the nomination "Heating of commercial and industrial buildings" of the HVR Award.

In June 2017, there was the grand opening of the Russian Viessmann plant in the city of Lipetsk for the production of Vitomax hot-water boilers up to 8.5 MW.
Excellent results on the Russian market showed an updated wall gas boiler Vitopend 100-W. Viessmann has once again become the market leader in sales of wall condensing technology.

Doing business is impossible without forecasting. And here is our forecast. We expect a revival on the market, both in the domestic and in the industrial segment. In the coming year, Viessmann will pay special attention to the development of the segment of industrial hot water boilers Vitomax manufactured in Russia. We also plan to spend 2018 "under the flag" of digitalization, introducing on the Russian market systems for remote access via the Internet and smart solutions for room temperature control. All of it should become available by the middle of the year. In addition, a new generation of medium-capacity condensing boilers (up to 1 MW) will be presented, in which designers focused on compactness without degrading performance, and we hope that the Russian market is ready to adopt the most advanced solutions used in Europe.

Another important focus of the company's development is the regenerative energy sources. We are planning to add the new Vitocal 100-S air heat pump (global novelty of 2017) into the supply program. This unit is able to work in cooling mode at high temperatures in the street, up to +40 ° C, which is very popular in the southern regions of Russia.

We should expect the appearance of decentralized ventilation systems with the blast-heating apparatus Vitovent 100-D on our market.

We will continue to promote the novelty of 2017 - solar collectors with the unique patented thermal shutoff system ThermProtect, which allows you to reach higher performance indicators, because its capacity does not decrease, and they always produce thermal energy. With all these new products you can get acquainted at the stand of Viessmann at the Aquatherm Moscow 2018 exhibition.

We are confident that the updated supply program, equipping with the functions of the Internet connection, will enable us to consolidate the positions of Viessmann and fulfill any tasks related to the new energy policy and modern digital technologies. Together with our partners, we will continue to develop the goals achieved over the 100-year history of the enterprise, and add some new achievements to it.

Sergey Plotnikov, Director of the Business Market Relations Department of MTS

The most noticeable in the modern telecoms of the IT industry in 2017 were three trends: increased demand for "cloud" computing, increased demand for solutions based on the "Internet of things" and the use of Big Data in a variety of sectors of the economy. And this is not surprising: the cost of equipment and services is gradually decreasing, and the economic effect of the current complex IT solutions is increasingly evident to customers.



Let me remind you that MTS has long ceased to be only the largest communication operator in Russia and is a provider of innovative services in the field of telecommunications and IT.

In recent years, we have seen an increase in demand for innovative corporate services, in 2017 it can be called unprecedented. Only the "cloud" solutions of MTS show an increase in the number of applications by 20-35% per month.

Customers now look at business development in a complex way - they need not just communication, but solutions that help improve communications with potential customers, process incoming traffic, increase sales, organize a digital workplace, structure and analyze their own "big data" and make strategic decisions .

Therefore, most business offerings combine traditional services with advanced solutions.

Since crisis times the principle of investing in technology "spend to save" is still relevant. But today it got a different, more advanced technological base. For example, together with MTS, corporate customers save up on IT infrastructure: instead of building their own data centers, fault-tolerant "cloud" MTS capacities are used. This trend is not only Russian, but also global: a multiple growth of "clouds" is noted in all recent domestic and international studies.

Speaking about typical consumer trends, we can state sales in cloud solutions: virtual software, data backup, cloud storage and others - these segments show the most noticeable dynamics, and not sales of hardware. And it's not just a financial gain in comparison with the construction of physical infrastructure. By connecting "clouds", managers of companies get into management a more flexible enterprise, ready to scale and to invest the freed resources in business development, launch of start-ups, a new product line.

Many enterprises have quite strict safety standards - the client wants to connect such solutions that will close these issues. A comprehensive service with the highest safety standards, compliance with local legislation, maintenance 24/7 - all at once and from one supplier - this is what today's customers want. He also wants it for a moderate fee and with the use of the latest technology. Their desire is legitimate: "clouds", "Internet of things", Big Data from once unattainable ideas have become the norm, accessible to any company, regardless of industry and scale.

Approaches to projects financing are also changing. Business investment in telecom and IT infrastructure has become more strategic. Just a year ago, business connected solutions that bring benefits already in the first month of their use - for example, services for remote management of transport and employees, as well as for the remote distribution of applications and tasks. Now the business actively integrates cloud solutions, planning the return in a longer time: services such as a virtual server, storage and backup of data bring economic benefits in the first year of use due to lower costs for building and maintaining IT in general.

Solutions based on the "Internet of things" can both solve one task, for example, collecting testimony from technically complex equipment, or they can become a technological platform for the modernization of the entire enterprise. IoT-solutions allow you to combine equipment for different purposes and generations, turning even the most conservative production into digital. Such careful modernization does not draw you into losses, brings effect in short term and becomes the basis for long-term prosperity.

Speaking about the future of the market, we can state that all the trends that emerged in 2017 will intensify in the coming. Indeed, now many segments of the market - both domestic and global - are in the growth stage: "cloud" computing, "Internet of things", "big data".

In particular, Big Data will become a tool for making business decisions: where to open a store, what products should be put on which shelf, what advertising at what moment to show, etc. MTS itself, based on the analysis of "big data" is already building communications stores: dozens of parameters allow you to calculate the most successful place with an accuracy of 100-150 m and even predict the profitability of a particular point of sale. Business will not just invest in company technologies, but actively participate in their implementation and application, and build business processes with the help of advanced solutions.

At a time of the increasing digitalization of business, the issue of security, especially information, will be even more acute. We would like analysts to be wrong, but it is expected that the number of cyber attacks in the world will increase.

As an advanced technology company, MTS strives to take into account the trends of all levels, and this gives us the opportunity to maintain technological leadership in the industry while simultaneously transforming our own business and increasing capacity. We are still the leader on the corporate communications market and the largest supplier of IoT-solutions for business in terms of the number of installed telematic SIM cards for many years.

In 2017, we launched a platform for the industrial "Internet of things" and on its basis - a service for data telemetering. The services of "cloud" computing were put into commercial use, we provided our customers with the capacity of our own data centers in combination with a branched network of trunk and city communication channels. We entered the market of "cloud" cash desks as a supplier of ready-made solutions for cash service of business customers. And our offer for customers will be the most functional "cloud" solution among the analogues on the Russian market.

MTS helps its customers to collect, process and store "big data", and also provides various tools and resources for the Big Data operator to search clients for corporate customers (SMS advertising).

We protect customers from cyberattacks - in 2017 we started offering our clients the services of our own Information Security Center (SOC), which since January 2017 has been monitoring the threats to the operator's systems around the clock. Creating its own SOC is not available for every company, and we realized that our center can serve not only our needs.

We have everything for digitalization of the real sector: innovative services, powerful expertise in the field of our own development of IT solutions, system integration, delivery and debugging of equipment and software of the world's leading vendors. Occupying a leading position in the mass and corporate segment, MTS provides its business customers with the most up-to-date technologies, an uninterrupted and fault-tolerant infrastructure, 24/7 tech support. A successful split from telecom, IT and financial and technical competencies opens up many opportunities for customers in any of the economy branches to modernize their business.

Ashot Aghbalovich Danielyan, President of the Group of Companies "Termoros"

Our time is a time of technological development, IT-technologies that make processes inside companies more efficient, give the customer guarantees of service, quality, and cut costs. One of such promising technological direction is BIM-design, which in some of EU countries has become the design standard at the state level, while in Russia it is being introduced by business activists, who first felt the advantages of new technologies and took care of its independent regulation and implementation. A good sign is the fact that the Ministry of Construction is discussing the possibility of transferring all state orders for design to BIM from January 1, 2019. The reinforcement of regulation and control over compliance with regulations that meet international standards, will reduce the number of errors in the design, open up the market for new staffing opportunities.

Also in the last few years in Russia, special attention has been paid to energy and environmental efficiency, responsible use of energy and resources, use of innovative technologies in this area. This is approved by legislative initiatives, decrees of the President of the Russian Federation and state programs.

There are also positive trends, such as the development of the service component, the growth of production in Russia, the increase in the competencies of companies. But there are also not very positive ones - in particular, in the client field, the level of demand for cheap products is increasing. This is due to a significant number of external factors: currency fluctuations, limited construction financing, formed in past years budgets in rubles. All these changes often entail the use of low-quality equipment at construction sites with commercial and budgetary financing. At the same time, in addition to projects moving towards cost-cutting, the requirements to the quality of construction remain weak. However, in the short-run, due to the optimal market conditions for the development of the domestic manufacturer, the quality and manufacturability of the equipment produced in Russia will significantly step forward.

After all, other things being equal, the best quality will be the main criterion of choice. This way a significant number of tasks related to the complexities of subsequent operation and problem areas will be solved, and this will serve as a prerequisite for the growth of the quality of equipment used on the construction market. These changes are also brought about by the fact that the systemic approach to the development of companies, the complexity and completeness of the provided services is changing in a situation where their quality becomes more important.

Automation of business processes becomes at first a factor of success, and then simply a necessity. Companies start developing both software products and system solutions. Many firms make the next step towards development. One of these steps - and during the last three to five years on the market of engineering equipment, this trend has been proven - is the opening of their own productions and the production of both simple and highly intelligent products. The situation on the Russian market as a whole only supported the development of this direction. Recently most companies were distributors or representatives of large foreign manufacturers, and today many of them represent their own brands and products of their own production. This once again confirms the fact of the change in the quality of the offered services and their spectrum.

From year to year, the number of Western companies that open their production in Russia with varying level of localization is increasing. Sanctions to which Russia has been subjected since 2014, gave impetus to the development, including state institutions. A large-scale renovation program will allow Moscow to attract investments in construction and related industries, and this will contribute to the development of the engineering market.

At the same time, undoubtedly, without the active participation of regulatory and supervisory structures and the professional community, the development of the engineering market in Russia as a whole will be a long process. This is a global issue, for the successful solution of which it is necessary for the state to pay close attention to it. Significant steps to work on the quality of products such as heating radiators have been made, for example, by the Association of Heating Radiator Manufacturers (APRO).

Despite the fact that there are lots of progressive companies on the domestic market, including Thermoros, and forces that determine positive development vectors, we expect that in 2018 the situation on the market will be complicated, so we will pay great attention to the strategic planning, operational monitoring of the situation and rapid response to market opportunities. Also, "Termoros" plans to pay special attention to the promotion of its products and services using the most modern technologies, which will allow us to dynamically increase market share - in the nearest future we are implementing a number of projects at the interface of marketing and IT. We do not doubt the professionalism of our team and we are sure that the difficulties only help us to unite the collective and confidently move forward. Our future achievements will be based on the foundation built today.

We worked hard in 2017, and for us, as for many other companies, the year was not easy. But, despite the fact that the total capacity of the market decreased, we implemented a program that allowed us to increase our market share and create prerequisites for the successful development of the Group of Companies "Termoros". Many international companies, which are leaders of the Russian market, revised their sales policies, which facilitated successful dialogue and development of joint sales promotion programs on the territory of the Russian Federation, made it possible to discuss joint production initiatives.

All the strategic development programs of GC "Termoros" were successfully implemented: two branches with warehouse areas in Novosibirsk and Yekaterinburg were opened, agreements on strategic partnership with market leaders - Wilo, Henco and Meibes were concluded, and the assortment portfolio was optimized.

Source: SOK



General media partner


Business programme partners

Banbas

Exhibitions partners




We are using cookies to give you the best experience on our site. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. By continuing to use our website without changing the settings, you are agreeing to our use of cookies. More information.