Portrait: special guest - G rard Lutique
Origin: Seen again Objective is / summer, 2003
By meeting men of ground having a strong experience of the Russian market, Objective is follows its reflexion on the development of the French-Russian current of business: to illustrate these purpose we met G rard Lutique, consultant specialised in the agroindustrial industrial process, from research of raw materials to the distribution-logistics, by accomplishing studies of development and industrial redeployment. He speaks to us about his 10 years of experience in Russia, notably for march and Danone.
OE: How were you led to work in Russia?
G rard Lutique: Of training engineer, my professional course was centered to a great extent around industrial missions (strategies and studies of industrial establishment). I participated in the seventies in the development of concept of Risk-management . This concept must allow to take into account existent risks, but also risks generated during a strategical definition. This vision of integration of risk was an important element, especially in my approach of the Russian market .
My first experience in Russia was made with the Group March (confectionery) from 1990 till 1993, on the eve of the disappearance of USSR. On the basis of leitmotiv A March bar for every Soviet citizen , my objectives were first to assess if an industrial establishment of an American concept was possible in Soviet Union, then to search a site of adequate establishment. The visit of the most important regions of USSR (Russia and Ukraine) allowed me to make me an idea of the financial and social status of the country. Having put as French observer working for an American firm I could measure
capacity of adaptation and knowledge of the Russians on our Western system. Besides I was surprised of the "easiness" with which it was possible to accomplish a plan in a Soviet system, certainly litigious but very normative or even mathematical. It is probably this structure of engineer who allowed to the Russians not to collapse economically after the fall of USSR. This allowed them on the whole to confront crises of 1991 (putsch and at the end of USSR), of 1993 (dissolution of the Supreme Soviet) and 1998 (financial August crisis) and to fall again on their feet
In march my first experience was therefore and I could show that an industrial plan could come true, naturally respecting the local rules. My mission for march was finished, I wanted to stay in this country by working as consultant in my own count across two societies, Rus Implant (studies of industrial and commercial establishment) and IBS (school of Russian, voiturage and relocation ") ".
OE: It is therefore in 1997 which you were led to work for
Danone. What it was the nature of your mission?
G rard Lutique: Danone had exactly the same objective as march that is to say to construct an important production unit of dairy products
expenses. My mission which started in January, 98 consisted in finding a site
building in the region of Moscow:
- On April 15th, the village of Chekhov (in the South of Moscow) was kept.
- June 26th Danone accepted the agreement of the Government of the Region of Moscow
- 30, that of the village of Chekhov to begin the building.
There were certainly some pressures politico - mafieuses, but they practised that at the level of the choice of the ground, but they did not succeed.
This plan was made respecting the administrative and technical rules, without paying the single kopeck . It is necessary to say that a very big part of the Russian interlocutors which I had in front of me, the same were that I had met during plan March and that a relation of confidence had settled.
The success of my missions is due especially to the fact that:
I always led my missions the only, accompanied only with a driver and with an interpreter allowing me to be situated in observer,
- We always united all interlocutors around the table
departments and administrations implicated, to get a consensus from the beginning minimum to avoid later all kinds of blockages or of escalations.
Use of relational political was fundamental to get an arbitration. But only by using policy regional. This political level has advantage to be obeys of the base and to be heard by its hierarchy.
The acceptance of the practice of local favourite sports, to know the instant of toasts, allowed to assess fast chances of success of a negotiation.
OE: The second part of your mission was the installation of
course of study milk
G rard Lutique: Indeed, this first finished mission, they asked me to develop course of study milk. Course of study milk in the region of Moscow was in complete shortage, with obsolete equipment and a strongly diminished livestock. With a local and regional administration who in an arbitrary way kept the control of this course of study and any plan of interference was badly perceptible. Even if sovkhozes and kolkhozes were privatised for their great majority. They stayed under allocations in accommodation, electricity etc that the administration agreed to them
To define our plan of action, we led a study on about 12 cows divided on about twenty sovkhozes and/or kolkhozes with to the final several official reports:
- Milk productiveness in report in their production capacity being unless the half, with nonetheless a rather good genetics
- A very strong saisonnalit between Et and winter, is a report from 1 to 3.
- A system of remuneration of the milk linked to the rate of fats, while products Danone require important rates in proteins and while the surplus of grease cost to him a lot.
- An obsolete, not very competitive agricultural tool and without capacity of financing for the rooms of spares
- A management of agronomists, of animal technicians and of engineers of goodwill.
Moreover, we had to evolve in a particular shape of market since milk production was less than request, knowing that this situation grew by:
- The visit of Western rivals, as Ehrman, Campina and the very active presence of a Russian group importing Will Bill Dann.
The attitude of the health administration which said that we alloy to have to steal the milk of the babies to meet needs.
We then worked out a strategy allowing to augment productiveness, to soften the saisonnalit by taking course of study very upstream, that is at the nutritional basic level of the milk cows, with:
- Plans of ploughing of the pasture of three-year Et , including choices of seeds allowing to act on productiveness and rate of proteins.
- Provisions of cutter-blowers, allowing to harvest needs in better conditions in silage.
- Programmes of trainings of management and personnel of milking of farms. These programmes were especially based on the improvement of quality, at the level of the hygiene of milking and of vaccinations (antibiotics)
On a commercial plan, we applied:
- A remuneration of the milk by the level of its quality (proteins, temperatures, absence of antibiotic, etc )
- From the signature of the contract of supply, the gracious provision of tanks of cooling in European norms
This thorough job required a direct investment of Danone, about 4 million $. It was rewarded at the end of 18 months, by first encouraging results. If they consider that the livestock noticed in weak of 8 % over this period, it was got:
- An increase of the medium productiveness of 30 %
- A reduction of the saisonnalit about 20 %
- An increase of the rate of 15 % protein
From the getting of these first results, we began developing a programme of introduction of new genetics, especially with the biggest farms capable of reimbursing the necessary investments.
To accomplish these financings, an agreement on the installation of credits to farms was concluded with the EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT, in which Danone brought its guarantee, by means of the purchases of the milk.
OE: In what this Russian plan differs from habitual strategy of
Danone?
G rard Lutique: Jobs of the plant of Chekhov began the day after 18/08/98, proof to our Russian interlocutors whom we kept
confidence. The plant started its production at the end of 2000 at requested level. The feature of Russian plan was to intervene very upstream, to develop our needs in milk, this in compliance with quality criteria of the Group Danone and this approach was new for the Group, which operates only from the collection of the milk in tanks .
OE: What lessons draw you from this experience?
G rard Lutique: Some humility and admiration for these people who were
always torn by his history. But first of all it is people who have a very good adaptability in his difficulties, a level of intelligence and of competence capable of leading us the hard life in economic terms in next years
OE: Your vision of Russia?
G rard Lutique: Following the example of what I said before, she is based on the question of the renewal of elites, which is even going to take several years. Today, the leaders, even the 25-35-year-old young people, were again brought up in the Soviet system. This university system has not suffered earthquake yet. As long as the reform of the basic training will have been accomplished, Russia risks putting longer before acting in an optimised way. But, it especially has not to to copy to stick , I think that it would be the biggest error. There must be a political will as reforms in a sense " russoslave without putting on therefore in the banns of worldwide economy. Russia is a country in very much potential, coveted by approaches anglosaxonne and Latin who try to influence the system as for example for labour, legal law, accountancy etc. The current serious difficulty of the system is to be able to lead basic reforms from most youth. Since then, other essential reforms will be better arrested without the Russian's losing their identity there.
OE: How do Frenchmen more have to get involved in Russia?
what can be the role of the Circle Kondratieff?
G rard Lutique: Unlike the Italians or the Germans, Frenchmen are not perhaps rather audacious on the Russian market. As for CK I came back there lately. The interest which I see is there to keep a link with Russia except personal contacts which I kept to it, but also to put my experience in disposition, especially in everything that feels each other the food processing industry. The Circle is a good drive belt which could bring some advantages notably in plans in agricultural domain, as for example, idea of a system of cooperatives of agricultural credit which makes currently its way, to allow the development of the sector at the level of the small and medium-sized company.
OE: An anecdote on your experience in Russia
G rard Lutique: To come back to Russian identity there I will take following anecdote: in September, 1991, I made visit a March plant in France to the minister of the Agriculture of epoch. The evening come, to Lido, it seemed not much interested by show, I asked him: What would interest you? . He answered me: I would like to go to the Sacred - Heart . And to top up immediately: That's true, I have minister's rank but first of all I am orthodox . This episode is one among so many others whom changed the vision which I had from Russia. All these work and personal experiences allowed me to appreciate this country better with its distinctive identities and its surprises, than they are good or bad. Toutes ces exp riences professionnelles et personnelles m ont permis de mieux appr cier ce pays avec ses particularismes et ses surprises, qu elles soient bonnes ou mauvaises.
Article writes by Nicolas Spassky
Origin: Seen again Objective is / summer, 2003
Written by admin one June 20th, on 2006 with no comments.
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