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Interview

with Julia Malafievskaja, General Manager of Trelleborg Industry Russia, Trelleborg Russia

05.07.2010 / Energyboardroom

Could you briefly present Trelleborg activities in the Russian market, where the company has been directly present since 1997 with a number of different business units?

Trelleborg Group is nowadays the biggest non-tire rubber company in the world. It was founded 100 years ago when naturally it was dedicated to mostly simple products, but with time we evolved towards more industrial applications and now we consider ourselves as a supplier of different types of engineering rubber solutions to a wide number of industries. The main concept behind all our different areas is to provide products and solutions to seal, damp and protect equipment, facilities and people. We feel we have a strong position in the oil and gas industry in this regard.

Trelleborg was first established in Russia in 1997. Trelleborg Russia started with Trelleborg Building Products and then expanded its activities to all business areas. Today we have four main divisons: Trelleborg Wheel Systems, which produces the tires for fork lifts, agricultural and forestry machines; Trelleborg Engineering System, which includes many products for the offshore oil and gas industry and also for different types of sealing applications for façades, windows, doors and roofs; hoses, anti-vibration solutions and so on, with a wide range of products – this is the company that I represent –; Trelleborg Automotive, responsible for light vehicle parts, for whom Russia is a fast growing market and therefore they are opening a local production side, to be able to supply this growing demand; finally there is Trelleborg Sealing Solutions, which provides sealing applications for different industries and for whom the oil and gas industry is obviously also important.

Internationally, the Oil and Gas industry represents more than 11% of Trelleborg Group’s revenues; looking at the Russian context, what is the importance of the local oil and gas industry to the group?

To be honest we are only just starting to tap Russian oil and gas’ tremendous potential over the last two years, when we introduced our offshore products. Therefore Russia represents promising growth potential for the years to come.

However, many foreigners are skeptical about entering the Russian market due to a general perception of a lack of receptiveness and over-challenging environment. As a Russian director of a branch office of a multinational company, what is your perception of that?

I am Russian and I understand the local reality very well, so I just think this is a more traditional environment. We at Trelleborg are concentrated in providing the local market with solutions that are unique. In the offshore business, Trelleborg has a wide range of products that will be necessary in order to fulfill the Russian ambitions of developing its offshore fields. Naturally, we are using international technology, but since there is no parallel in the local market, Russians are open to partnering with us and using our technology for key projects.

Another feature of the Russian oil and gas market is the wider dominance of local players or, at most, of JVs between local and foreigners. How does this affect your penetration of the market, since your traditional international partners are not always present; and what is your strategy in terms of attracting local companies that are not familiar with Trelleborg’s products and solutions?

Our strategy is to be in touch with both foreign and local clients. Naturally, international clients are easier to approach since they are already familiar with Trelleborg’s unique solutions in other international markets. Regarding Russian companies, we have to approach them and explain our technology from zero, but the potential to be tapped makes the time spent worthwhile.

As you said, it also depends on whether these companies are in cooperation with foreign partners, which is normally the case in the offshore business. In those cases Trelleborg’s approach is also made much easier since they are already familiar with our products and solutions through their international partners.

Besides that, even if what we are providing is the product of an international agreement between our headquarters and multinational companies, Trelleborg’s Russian subsidiary has to assist and carry out a number of activities, as in the case of the Sakhalin project, where we assisted in dealing with local certificates, technical documents and so on.

What are the main products and technologies that Trelleborg provides to the offshore oil and gas industry and how well positioned is the company with regards to the local competition environment?

Trelleborg is a market leading designer and manufacturer of marine and offshore solutions for topside, surface, subsea, sea floor and down-hole applications. Our main products include surface and subsea buoyancy, thermal insulation, clamping and solutions to protect critical equipment against fire, over-bending, impact, corrosion, vibration and abrasion.

Our engineered polymer solutions assist our clients to increase their efficiency, cost effectiveness and on-site safety of all their projects throughout the world.

Trelleborg has all major Russian players such as Gazpromneft, Lukoil, Rosneft as our partners and obviously companies like Lukoil have countless number of subsidiaries that are captive partners. We offer chemical and diving suits for the productive products providers of the oil and gas industry, having a quite strong position on the Russian market with this group of products.

To supply products to the offshore Industry is challenging for any supplier. Products must be thoroughly and rigorously designed, manufactured, tested and documented. Often the requirements push the scope of current technology, the lead times are short and the delivery times are critical. Clients must have complete confidence in your ability to perform under these conditions. Trelleborg can meet all these requirements as the leading global supplier of the wide range of elastomeric and metal-elastomeric products to major offshore projects.

The product line still includes the bearing systems for various applications such as leg mating units (LMU) and deck support units (DSU) for platform installation over the legs at float-over process, shock pads for jack-ups, module support bearings for FPSO’s, anti vibration pads for platform accommodation modules and shock cells. Trelleborg also supplies and installs gripping systems and leg cans with diaphragm closures, grout packers (including inflatable) and grout seals. For service boats and barges mooring to platforms Trelleborg produces special fender systems.

For instance, we offer Shock Dampers to protect the legs of the platforms that automatically move up and down. In such structures you need anti-vibration protection and Trelleborg provides these special rubber materials that work as pillows and protect the moving metal parts of the platforms, ships and other offshore structures. Again, Trelleborg provides these solutions to all the main players in the world such as Shell, Chevron, Exxon-Mobil, and Total.

In the offshore business, some of the products that we provide are unique and no one else in the world provides them. We have a product called Elastopipe, which is a safety solution used in platforms for fire situations. This kind of product is only produced by Trelleborg; it is a special kind of rubber.

Trelleborg has other anti-vibration solutions for the platforms themselves and also for ships mooring up to platforms.

How does Trelleborg cope with the perception that IP protection in Russia is not a priority and that the local government and companies are activly trying to transfer western technology? Do you see this as a challenge or more as an opportunity to export Trelleborg’s unique expertise to a growing and massive market?

This perception is partially true, but I can say that Russia is definitely moving towards a positive direction. In the offshore business, foreign companies have a big technological influence over their local partners, such as companies like Gazprom. During the Soviet Union we didn’t build offshore complexes, so Russians realize that at the moment the best way to go is to apply western technology. Here all the safety solutions are somehow installed and Trelleborg’s aim is to provide the most efficient, cost-saving and safest equipment on board.

As an example of this change in mentality, when Trelleborg first introduce gas tight suits ten years ago it was difficult to convince local people that they needed such equipment because the local safety standards were very low. Now these products are getting increasingly popular and Russians are introducing more and more of these technologies; they still are however far from western standards.

In the past three years, the oil and gas industry worldwide was badly affected by the financial crisis, but now that oil and gas prices are stable and projects are starting to be re-launched, what are your main expectations and ambitions for the Russian market in the coming years?

Projects in the oil and gas area tend to be long-term, and Trelleborg understands that regardless of circumstantial constraints, Russia as a huge untapped potential. For instance, we have high expectations for projects such as Stockman, where we have good connections and a lot to offer; Sakhalin is a project that will continue and further develop; we are opening new opportunities in countries like Turkmenistan and Kazakhstan, which are big markets for both oil and gas, as well as for other industries in which we work.

Trelleborg is constantly holding meetings with local players such as Gazprom to present our unique solutions and we also are very active in participating in oil and gas exhibitions in order to present our products.

Trelleborg would definitely like to be better known in the Russian market not only via our foreign suppliers. We want to tell our potential Russian clients that we are directly based here and declare that we can assist our clients on location.

What would your final message be to the readers of Oil and Gas Financial Journal about Trelleborg’s activities in the Russian market?

Trelleborg has very good products that provide the most efficient, cost-effective and safest solutions to customers for a wide variety of projects. Furthermore, we have extremely capable and well-trained staff both on our factory floor and in our Moscow office; they are working very close with each other and with our clients in order to deliver the best solutions to both Russian and foreign clients committed to the industrial development of their Russian operations.

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