— Michael, have you been in Moscow long?
— Since 2006. But it should be said, not just in Moscow. I am always shuttling between Berlin and various cities in Russia, as our company – the MIKO Group – has representations in St. Petersburg and Sochi, too.
— You speak Russian perfectly. Did you go out of your way to learn the language?
— It’s all a lot simpler than that: my parents are from Riga, the capital of Latvia. In 1974, they emigrated to Germany. So I’ve known Russian since childhood. And the fact that I started to do business in Russia should be seen as not merely a rational, but also a logical and natural, decision.
— Does your company operate only within Russia or in other CIS countries, too?
— The MIKO Group’s activities are concentrated 90 percent in those countries comprising the former republics of the Soviet Union. However, as of 2014, we also made a successful start in entering other countries of the world with projects supplying kitchen equipment for hotels.
Michael Koblenz was born in Berlin on the 23rd of November 1974. After high school, he studied at the European University, graduating in 1998 with a bachelor's degree in Business Administration.
A keen runner (takes part in marathons around the world) and tennis player. Plays football.
Familial status: married.
— Please give some examples of the work you have done in Russia.
— Let’s start off with me telling you what my favourite client looks like. It is someone for whom we are planning to create a large hotel kitchen, for whom we come up with the design, and then supply and install the equipment. In addition to which we provide the hotel rooms with their essential items: pillows, blankets, bed linen, minibars, safes, bathroom accessories… In the ideal case, the hotel, on top of that, also offers its guests coffee made by a simply fantastic machine from the Swiss firm JURA, as well as tea from the firm Ronnefeldt. These companies are partners of the MIKO Group.
— You mentioned the firm JURA, whose activity in Russia our magazine covered in a previous issue. Please share with us your experience of working together.
— Our collaboration with JURA started not long ago at all: we have been together since the end of last year. This company is known all around the world. We are glad that that is was precisely them that became our partner and granted us the right to distribute coffee machines for commercial uses. All the more so as this was done in difficult times for Russia in economic terms.
— Incidentally, regarding the times. Your company was formed in 2006, when Russia was enjoying an economic upturn, and many foreign businessmen were aspiring to start their businesses here. Now the situation has changed, aggravated by the rate of the rouble, and the economic sanctions. Have these factors had an effect on your activity at all?
— To say that the MIKO Group hasn’t felt any effects of the current situation in Russia wouldn’t be true. However, as I see it, our management company was able to make the right decisions, in the shortest time possible, and drew up a proper strategy for expanding the business, adding new lines of products to our portfolio, thus minimizing the risks. This enabled us to retain the business and staff in their entirety.
We see the current crisis as an opportunity which needs to be taken. We must show our worth, be quicker and more flexible than our competitors. We have a positive attitude, and we are sure that we can overcome the difficulties and become even stronger than we have been thus far.
The company was formed in 2006 and is now one of the market leaders. Boasts warehouse facilities in Moscow, Sochi, and St. Petersburg.
Its main focus is fitting out of business and premium class hotels with the complete range of OS&E (Operating Supplies and Equipment needed for their day-to-day running). The MIKO Group offers a wide selection of goods: from bedding and bathroom and hotel room accessories to everything required by restaurant and laundry services. For many years, the company’s strategic partners have been Dometic, Aliseo, Mühldorfer, Handon, JURA, Ronnefeldt, Viessmann, Aichinger and others. The MIKO Group’s mission is to provide exclusive, comprehensive, high-quality goods and services, individually tailored to the client’s requirements.
The company has three representations in Russia: a head office in Moscow, and other offices in St. Petersburg and Sochi. There is also a representative office in Berlin (FRG).
The staff in Russia consists of 35 people. All are RF citizens. In Berlin: 15 people, 95% of who are Russian speaking being, as they are, the intermediaries between western suppliers and Russian clients.
— How many people do you employ in Russia? And who are they? Are many of them Russians?
— Working in Russia in the MIKO Group’s departments are 35 people. And they are all Russian. Another 15 employees work in our Berlin office. They complement one another. Our Berlin employees are 95 percent Russian-speaking, of Russian origin, but, obviously, they also speak German and other languages. They are quite often the link in the chain between the Russian market and international suppliers, as our producers in Germany, Italy, and Switzerland usually get in touch with our Berlin office, and not our Moscow one. That, by the way, is one of the reasons why our suppliers are keen to work with us: as their route into the Russian market ends up being a shorter one.
— And how do you rate the level of professionalism of your Russian employees?
— Either I have been lucky, or I have a good instinct when it comes to selecting employees. Suffice to say that 80 percent of them have been working with us since the very beginning: since 2006. We are proud that we have a very low turnover of staff. Fortunately, hardly anyone ever leaves us. And at the same time, there are hardly ever any reasons to let someone go. The majority of our employees are young, well-educated people, all with higher qualifications. I think that it’s important to present them with the opportunities for career advancement, that, at a relatively early stage, we entrust them with serious responsibilities, and also that we care about improving their skills, which is why we regularly send them to Europe for training, to attend seminars arranged by our suppliers, and to trade shows. So that we have an excellent group, where a good team spirit prevails.
— Western businessmen often have qualms about Russia. They talk about bureaucracy, corruption, crime… What is your experience in this regard?
— You are lumping all of those things together but they need to be separated out. As for bureaucracy, well, you simply have to accept the local conditions and act accordingly. I mean, I can’t repeal or change Russian laws. So, either I adapt and carry on working, or I exit the market. Bureaucracy in Russia is probably more pronounced in Russia than it is in Germany, but you have to accept the way it is.
— It has become almost a tradition to talk about the “massive advantages” of doing business in Russia. What, in your view, do they consist of?
— If we’re talking about the overall picture, then since 2014 the situation in Russia has changed. At the start of the century, pretty much anyone could sell pretty much anything at any price. I wouldn’t say that doing business was easy, but the prevailing mood back then was something akin to a gold rush. It was the same in our industry, too. It was a time when hotels were being built everywhere, including Sochi: for the 2014 Winter Olympics. I wouldn’t say that anybody who wanted to could start a business in Russia then, but at the time the condition of the market was not one you could call normal. Now, though, Russia represents a completely normal market – no worse and no better than anywhere else. And you can be a success here, as in any civilized country, if you offer a good product or a useful and worthwhile service at a reasonable price.
— The current trend in the development of the Russian economy at this present stage is one of import substitution. What do you think: will this trend not frighten off western businessmen? Will it not force them to turn away from Russia?
— I am looking at this situation from the point of view of someone who grew up in Germany: an industrial country with a powerful economy and where domestic production plays a very big part. So I think that the road to domestic production in Russia is an extremely positive trend which will enable the country gradually to rid itself of dependency on natural resources. It is thought that the sanctions, and the weakening of the rouble, will give the Russian economy certain advantages.
— What would you advise western businessmen about to start a business in Russia?
— They need to be sure that their business model is going to work. And they also need to be flexible, prepared to operate within the local conditions, and able to listen. The way I see it, if someone intends to come to Russia to show how the world works and how to be, then they really aren’t going to get very far. But then, given the present situation, you have to be prepared for a certain amount of risk when doing business in Russia.
— Does knowing the Russian language play an important role?
— I am not about to say for certain how my business would have turned out if I didn’t speak Russian. But that knowing Russian made it significantly easier to run my business in Russia is a fact. So, knowing the Russian language is a big advantage for the foreign businessman in Russia. But not the main one.
— Does the MIKO Group have plans for the future in Russia?
— I took a chance on Russia, and will continue to concentrate my efforts on this country. It is no secret that there are enterprises that, after the worsening of the situation in 2014, left the Russian market. But that is not what we have chosen. We are proceeding on the premise that under the current conditions we will be able to become yet stronger, that we are investing in the RF. It stands to reason that the MIKO Group aims to minimize its costs. But I think we are on the right path, offering a relatively wide range of goods and services in partnership with JURA and Ronnefeldt, which has enabled us to widen our target market, when before, our company worked only with hotels. Now, though, we cooperate with retailers like the chain of Russian supermarkets “Azbuka vkusa” (A to Z of Taste), and supply goods to large concerns. This makes business more varied and interesting.