Nikolai Ignatiev: “Strategic aim has not changed - to become a global player”

Ignatiev Nikolai Mikhailovich 
President of the «АКОМ» Group of companies

Ignatiev Nikolai Mikhailovich

President of the «АКОМ» Group of companies

09.10.2014

With the President of the AKOM Group of the companies we talked before Machine Builders Day. This holiday for many companies of Samara Automotive Cluster is a certain point when it is possible to summarize the activities, to make plans for the future. Our conversation began with a preliminary summary of the outgoing year.

- We confirmed our leadership in the Russian market, and this is, probably, the most important thing,  - said Nikolai Mikhailovich. Last 3 years "AKOM" has been keeping position of the largest manufacturer of SLI batteries in Russia. Our share at OE market has been reaching a 40% level. In my opinion, this is a serious indicator of stability and proven leadership in industry.
But we have not only kept our positions, we’ve strengthened them: almost 100 % of the AVTOVAZ demand has been covering by us. This is a serious evaluation of our work – our opportunities, capacity reserves, our technological level, the production quality. The positions of our company were highly appreciated by the President of "AVTOVAZ", JSC Bo Andersson, who visited "AKOM" in July,25 of this year.

The meeting was attended by 14 of the AutoVAZ top-managers, which were included in the working group. Action plan had agreed, there was an agreement of the quarterly updating meetings on the C-suite level for summarizing the results. Thereby we are creating a model of collaboration between supplier and manufacturer, and then this experience could be transferred to other suppliers of Renault-Nissan-AVTOVAZ. I see a great opportunity in this cooperation, including for the development of our company. We have worked hard in preparation for the ASES audit and we hope to confirm soon the supplier status "B", corresponding to the level of global partner of the RNA alliance. For understanding: alliance suppliers have four stage of the status. "A" is a supplier of the world level, "B" is a global partner of the concern, "C" is a local partner of the concern with the action plan for improvement, "D" is a certain level before the elimination. There is no one manufacturer of batteries in Russia, who has the status "B".

Except AVTOVAZ we continue to cooperate with the other brands - GM-AVTOVAZ, FORD, and others. This year is the first time, when we sell the million batteries on the secondary market.  It gives us the confidence that the company will be financially stable regardless of the situation at OE market. Besides, this year "AKOM" intends to overcome the level in 1.5 million of units manufactured.

As you know, in 2013 one of our companies, named "Accumulator of innovations" is awarded the status of a resident of Technopark "Zhiguli valley". From our establishing we could not afford to make researches. Now we have this opportunity thanks to the help of governmental programs.  It may safely be said that the "start-stop" buttery launching is at a high degree of readiness. According to characteristics being declared it would be at the foreign analogues’ level, and I can note that such batteries are not yet produced in Russia.

- You modestly dissembled that you are appointed to the first Vice-President of the "INTERBAT" Association...

- It is true. The Association unites producers of chemical power sources and equipment for their production from CIS countries and some European countries. In due time, the AKOM Group of the companies was admitted to this organization. Then I received an offer to take up the post of the first Vice-President. Together with the partners of the Association we are preparing a program of innovative development of the industry of chemical power sources, which is addressed to the import substitution. And now "AKOM" has the possibility to act not only on behalf of the one enterprise, but to lobby for the interests of the industry in the whole.
 
Now the economy of Russia and Samara region have to respond to the challenges imposed sanctions to our country. Do you keep these points in mind when you define tasks? Have the contacts with the foreign business partners become narrow?

Generally speaking, we have only one task:  to become a global player in the market of chemical power sources. As for relations with partners, contacts are definitely not narrowed. On the contrary, they gained a new perspective: just ten days ago in the Togliatti Mayor’s office there were signed the documents of the creation of the new enterprise with foreign partner, which will deal with the production of components of AKOM battery. Of course, our foreign colleagues have some questions in connection with the recent events... Whenever possible, I’ve managed to convince them that politics is politics, but business is business. I even can say that now some foreign companies have the opportunity to replace those who still hesitate. Who will be the first, who will take the risk reasonable that will win.

It is more complicated with the production equipment sources.  They are mostly foreign ones - Canada, Austria, Germany. However, there are competing offers from China, Korea. Perhaps, there are other technological solutions, but their equipment is, in principle, has a good performance. And after some time, I am sure, the Russian machine-building complex will catch up also. In other words, if something affects the dynamics of development "AKOM", it is only slightly impact some technical parameters of our projects, but strategic objective will remain the same.

- Nikolay Mikhailovich, it is known your position in the question of import substitution, your appeal to the authorities. Could you have conveyed your point of view, can we expect some concrete steps from the side of authorities?

- At the July meeting with Vladimir Putin in Samara I have outlined two issues. First one: the Russian market of chemical power sources consists of imports more than 50 %. Moreover, almost half of Russian companies capacities are unused. Only "AKOM" and another two domestic companies produce more than a million batteries annually. All others are producing less, and therefore are at the risk zone, since with production volumes less than 1 million units, it is difficult to support effective sales channels. I mean, there is a free production capacity of Russian companies, but half of the market is covered by units imported from the USA and Ukraine. Import duty for Ukrainian goods is close to zero. So, I made a proposal to the President of the Russian Federation to consider the possibility of introducing a standard duty of 12.5 % for Ukrainian batteries, according General conditions of entering of the Russian Federation to the WTO. In addition, the waste regulations, which act in the EU and USA, require from producers-importers to finance domestic recycling industry. There are no such obligations if the batteries are imported in Russia. We asked to add the legislation by the introduction of waste fee to finance the federal network of the batteries scrap collection. Apparently, not only I’ve talked about this to the President, because about a week after the decision was made.

The second issue is: there is built a plant for the production of Hyundai cars in St. Petersburg. The battery in cars of this brand is KES - a special Asian format. In order to reduce costs, the Korean company asked the Federal government to slash to zero a duty on the imported components including battery. We made an another proposal:  not to slash to zero a duty, but to build a battery manufacturing in the industrial park near St. Petersburg on asked finances from Federal government’s Fund for Supporting Industry, to deliver the battery to Spt vehicle plants "just in time", with minimal logistical cost. As a result, the duty for battery is not null. I am sure that the decision to build the plant and to localize the production of batteries is the most reasonable.

- Some time ago you were going to build a second production area. Are there any changes of your plans?

- As the strategic aim has not changed - to become a global player, so the plans to create a new production have not changed also. If you noticed, "AKOM" has its own approach in relations with the authorities. We do not expect when some kind of government program come about, but we try to create conditions for its introduction. And, in particular, we want to accelerate the acceptance of private-public partnerships programs by regional and Federal government. In connection with our strategic plans it was appeared an interest in the construction of a plant in the region, which is the closest to Europe in the Kaliningrad region. Local authorities are also interested in this proposal – there will new high-tech workplaces, modern production, taxes to the local budget, etc. And therefore, both sides have great chances to find a way for mutual beneficial cooperation and the subsequent development of the region.

- "AKOM" is known for its commitment to innovation, and how do you see the prospects of the industry?

- Now we more often talk not about the accumulating batteries tightly, but about the chemical power sources. "Accumulator of innovations" will start the production of our first "start-stop" battery, which is protected by four patents. "Start-stop" - this is absolutely a new product, having a large cyclic stability and which will used as in transport, so as well in energetics and in industry as a reserve power source. Then our development will continue in direction of batteries for hybrid and electric vehicles, where the battery power source is becoming increasingly important element.

- Is it your original development?

- Of course! There are certain additives to the active mass, the additives to the electrolyte... And at the finishing line we get the battery with the new characteristics. We actively cooperate with relevant research entities, we connect the real production with academic science. The next step needed to make for "Accumulator of innovations" is mastering of lithium-ion technology. After that we’ll get the other field of our product’s use – water transport, space, reserve power supplies. We and the experts of RUSNANO are discussing this area of work.

I believe in the professionalism of the team of the AKOM Group of the companies, its ability to solve the most complex problems and to achieve the highest aims. On this occasion I would like to congratulate all AKOM, and all the workers of the engineering industry with our professional holiday!

Published in the newspaper "News of the region", 25.09.2014

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