12 April 2018
Opening of the office in Russia in 2003 was in line with the Group international expansion stages. GEFCO was developing its business globally following its major shareholder, PSA Group. Initially GEFCO specialized in finished vehicles and spare parts delivery, and quickly gained a leading position on the Russian market of automotive logistics. During 15 years in Russia, GEFCO opened 10 offices across all the country from Kaliningrad to Vladivostok. GEFCO cooperates with the leading industrial companies, car manufacturers, spare parts suppliers globally. The company focuses on the largest Russian industries operating in steel, machinery, energy, oil and gas and other sectors. On top of that, GEFCO works on attracting local companies. It’s worth mentioning that number of local clients constantly grows – in 2017 revenue at that segment showed a 32% growth, and share of local clients increased by 27% during first months of 2018.
“During 15 years of operating in Russia, we got a truly unique experience. Russian market was always a key market for GEFCO Group, and its 15th anniversary is a significant event for us. We passed a long way and successfully tackled with the automotive market declines which is the priority for the Group. We’re able to successfully diversify the business model in Russia, and our aim is to strengthen our positions on the Russian market”, said Luc Nadal, Chairman of the Management Board.
Business development in Russia
The latest years were significant for GEFCO due to successful deals and projects. Such companies as SUEK, Severstal, ChelPipe, UralChem, Gazpromneft-Supply, Ferronordic Machines, as well as international manufacturers such as PSA Group, Toyota, Talgo became the part of GEFCO Russia clients’ portfolio.
In May of 2015 GEFCO signed a 5-year contract with Ferronordic Machines, an official dealer of Volvo Construction Equipment and Terex Trucks in Russia. Within this partnership, GEFCO Russia is responsible for the complex logistics services, logistics flows and cargoes transportation (Volvo and Terex machinery and equipment, and spare parts).
Also in 2015 GEFCO signed the agreement with ChelPipe Group having won the tender on logistics sevices and offered the best export solution for pipes delivery from Russia to the USA. Companies continued the cooperation and GEFCO launched a dedicated project to optimize freight flows between two plants switching them from road to rail.
In June, 2016, GEFCO became a partner of Russian Export Center (REC). The main goal of this partnership is to support Russian exporters from industrial sector. In the beginning of 2018, two companies extended the partnership, and GEFCO became an accredited partner of REC. Two parties will continue their cooperation on increasing the export supply efficiency and will facilitate the growth of supply volumes abroad, including automotive industry production.
In summer 2017 GEFCO and SUEK signed the memorandum on cooperation to implement innovative integrated transport and logistics solutions in the field of equipment and spare parts deliveries for the coal industry. Companies fulfilled a number of joint projects and many of them are unique in the sense of ingenuity and efficiency.
Basing on its long global experience, GEFCO launched many successful projects to develop operational activities on the Russian market. The example, can be named the launch of the compound for finished vehicles in Domodedovo (launch in 2012, 13000 parking lots), the volume of investments to which amounted to several tens of millions of Euros. That complex became the first European-level site in Russia which provides a unique service of “technical station” with many options of additional services during the storage period.
GEFCO continues investing in the business development in Russia. Such an example is investments in rolling stock for finished vehicles transportations. In autumn 2017, GEFCO acquired over 700 rail car transporters in order to develop export flows.
Partnership with RZD
In December, 2012, RZD acquired 75% of GEFCO shares, and it was a turning point for GEFCO activities in Russia. As the result, RZD got the opportunity to use GEFCO’s global expertise. In exchange, GEFCO could develop a range of services and offer the integrated logistics solutions to Russian and international clients using not only RZD resources, but also the assets and infrastructure of RZD subsidiaries. Examples of this partnership:
• GEFCO involvement in the large infrastructure project “Doskino” (a construction of transport and logistics center in Nizhniy Novgorod region) where finished vehicles compound was opened in 2012, 5500 parking lots;
• Opening of rail logistics department which develops company’s services in rail transportation.
GEFCO uses RZD infrastructure for multimodal “door-to-door” transportations of different types of goods; providing loading/unloading works and goods storage; warehouse operations management; transportation of finished vehicles by rail; export and import rail deliveries, and transit flows from Asia to Europe and back. GEFCO invests in RZD infrastructure renovating sites to meet the clients’ needs in warehouse logistics projects.
Status of RZD subsidiary gives to GEFCO a strong competitive advantage. Partnership with RZD contributes greatly to the company’s development on the Russian market.
Top Management changes
On September 1st, 2017, Valeria Seledkova, ex-Financial Director of GEFCO in Russia, CIS and Baltics, became a General Director of GEFCO Russia. That appointment reflects a human resources policy of GEFCO Group which allows its employees to grow within the company.
“It’s the honor to be the Head of GEFCO Russia when it celebrates its 15th anniversary. Surely, this is a reason to be proud, but also a huge responsibility. The company develops dynamically. The latest successful projects include our partnership with REC, SUEK, STLC, Sberbank. We appreciate that companies strategically important for Russian economy, trust us, and we are proud of our achievements. After 15 years, 4 billion kilometers passed, more than 4 million tons of cargo delivered, hundreds of clients and partners are in the portfolio. These are impressive figures, and we set even more ambitious targets for coming years”, - Mrs Seledkova concluded.
GEFCO Group keeps on growing and pursuing high results achievements in 2018, with the objective to retain the leadership in automotive logistics.
In coming years, GEFCO plans to ensure the sales growth and continue the client portfolio’s diversification. GEFCO Russia successfully goes on this direction the last few years. If in 2013, 97% of GEFCO clients related to the automotive, but now 40% of GEFCO clients in Russia are companies from FMCG, industry, manufacturing and other sectors.
GEFCO plans to continue its cooperation with RZD Holding, the major shareholder:
- work based on principles – a few contracts with regional railways are already signed, and GEFCO is ready to broaden this successful experience to the entire railway network.
- projects development on cargo transportations with RZD trade electronic platform for Freight transportations.
Key priorities for GEFCO are integration and optimization of supply chains, provision of high quality services, fast adaptation to the clients’ needs and investments to the human resources development. Innovative ideas start from people, and GEFCO is interested in long-term professional and career development of its staff and further growth on the Russian market.
It’s the honor to be the Head of GEFCO Russia when it celebrates its 15th anniversary. Surely, this is a reason to be proud, but also a huge responsibility. The company develops dynamically. The latest successful projects include our partnership with REC, SUEK, STLC, Sberbank. We appreciate that companies strategically important for Russian economy, trust us, and we are proud of our achievements.
General Director GEFCO Russia