German Measuring Technology for the Belarusian Market

Kirill Filippenko’s family are among the pioneers in the private sector in Belarus. Immediately after the collapse of the Soviet Union, his father established one of the first private companies in the former Soviet Union. And this “entrepreneurial gene” has been passed on to his son. Upon completing his degree in systems engineering and an MBA, he began working at his parents’ company. In May 2015, he participated in the MP and signed important contracts with two key clients from Germany.

Minsk. R&D Gran-System-S LLC is a medium-sized company based in the Belarusian capital. Around 100 people, half of which are engineers, work to develop and manufacture electricity meters and other measuring devices. In Belarus, the family-run business that has been operating for almost 25 years is the market leader. The business with Germany has been an important factor for many years, constituting 15 percent of the company’s total turnover, though Filippenko believes that this can definitely be increased further.

Gran-System-S has cooperated with Nuremberg-based Landis+Gyr GmbH for decades. Landis+Gyr offers solutions for the metering of electricity, water and heat consumption. Until now, the Belarusians sold products for this strong German partner in their country and took care of a portion of production. The two companies negotiated for two years on the outsourcing of the production of an entire assembly line of heat meters to Belarus. It was reasoned that the products could then be produced and sold for considerably less, as customs duties or transport costs would no longer be payable. What’s more, the markets in Russia and Kazakhstan with whom Belarus has entered into a customs union (EACU) could then also be served. While Landis+Gyr trusted the quality of the work of their long-standing partner in Minsk, they were hesitant about this step. It was only during the MP and following several meetings in Germany that Filippenko was able to convince the global enterprise – an agreement was reached to produce the heat meters in Belarus from 2016. A service centre will also be set up to take care of customer support as well as to offer service, repairs and recalibration. Filippenko has invested 250,000 euros in building his production facilities for Landis+Gyr. In the first year, he anticipates turnover totalling 1.7 million euros. This alone would double the turnover with German partners. The engineer is currently working on obtaining the necessary certification for the sale of the new products in Belarus, training his employees, and preparing a marketing plan. He also wishes to enter the Russian market. “Our Belarusian proof of origin means we are able to sell to Russia without any problems. And we have all the necessary certification for sales within the customs union,” says Filippenko. The 36-year-old has thus cleared the way for him and his German partner to establish a supply chain for the world’s largest country.

The meeting with ZERA GmbH was also a success. Preliminary contact was made with the manufacturer of measuring and testing technology based in Königswinter three years ago – though only via a subsidiary in Ukraine. Personal contact during the MP helped to further the partnership. Gran-System-S is now the official retailer for ZERA products in Belarus and is set to boost the Rhineland-based company’s sales activities in the landlocked Eastern European country. Filippenko is responsible for developing the Belarusian website as well as for preparing a marketing strategy. He will also set up a service centre for ZERA, train the employees and recruit new staff.

“Due to cultural differences, situations arise time and time again where we do not understand one another. This also played a role in the cooperation with my German business partners, despite our having known one another for a long time. The MP allowed me to improve my intercultural skills. Now I understand the differences. This really helped me during the negotiations,” says the deputy managing director.