— At the time I was appointed to the position in Moscow, I had been working for Mitsubishi Electric for 34 years, says Furuta san. In accordance with the corporation rules I was approaching the age when I am to return to Japan and lead one of the affiliated companies.. But I was eager to continue working and try something new, something with good prospects – so Russia with its business culture and the traditions of doing business, different from what I had seen in Western Europe and how I had been used to working before, was exactly what I needed.. Mitsubishi Electric (Russia) LLC, founded in Moscow in 2014, was quite young, and I decided that my management experience could be useful here. So the wishes of the corporation coincided with my own.
— A major part of Mitsubishi Electric products consists of industrial equipment intended for quite large companies. Do you also work with small and medium ones?
— Yes, but it’s quite difficult to determine their share of our business. End consumers of our products are usually large companies. At the same time, we have a wide partner network including distributors, dealers and system developers. And these, as a rule, are not very big firms.
— You said that business in Russia differs from that in Western Europe. What is the main difference?
— If we are speaking of strategy, of business policy, in general we take a similar approach. . The main difference, in my opinion, is that Russia is an enormous territory with enormous potential opportunities, particularly in the development of infrastructure: social utilities, power, transportation...
— Does the Russian consumer differ from the European or Japanese?
— I think consumers here can be divided into two groups. The larger one is interested in cheap products. The smaller one consists of those who can afford to buy goods and services of the top price segment. And I admit I was somewhat surprised to learn that Japanese equipment is so well accepted in Russia.
— Despite the fact that it is quite expensive.
— You are right. Mitsubishi Electric products are in the premium segment due to high reliability and quality, the use of the most progressive technologies and the high level of customer service. These are our main competitive advantages. The corporation strategy is not about minimizing prices but maintaining low life cycle cost: service cost in particular by ensuring trouble free operation during the life cycle. These advantages of Mitsubishi Electric products are well known and highly appreciated by the customers. But due to the rouble devaluation, our products have become even more expensive, while the purchasing power and the investment level have shrunk. I won’t conceal the fact that competition with Korean and Chinese companies has become tougher. But the high quality of our products is still appreciated on the market and the chances for further growth do exist.
— Russia has set course for import replacement. Has it had an influence on the plans and strategy of your company?
— Our company understands the Russian government’s intention to enhance import replacement, and we cannot ignore this when developing our business strategy. However, the demand for our products in Russia and CIS region is not yet high enough to invest in production establishment. .
Our general strategy is to develop the technical and manufacturing potential of local enterprises and partners in order to make them more competitive globally. Such mutually beneficial cooperation can be achieved in different ways: by setting up joint ventures, by the transfer of technologies, by mergers and acquisitions...
Anyway, Mitsubishi Electric in Russia contributes to import replacement. Mitsubishi Electric (Russia) LLC supplies unique equipment that has no analogues in the region. What is more, import replacement is firstly real sector development, which means the growth of local manufacturing. Our factory automation products are key elements of advanced and efficient manufacturing. With “made in Japan” components, the competitive level of “made in Russia” products can be increased.
— What about the notorious sanctions? Have they had any influence on you?
— We have not felt the direct influence of sanctions on our business. But anyway, sanctions are one of the general economic downturn factors which has certainly affected our business. The recent hot summer kept the level of air conditioner sales up, but not to a great extent. Furthermore, as I said before, competition with the Koreans and Chinese continues to be intense. Despite that, we are showing growing profit in our activities.
— Apart from its Moscow headquarters, Mitsubishi Electric has four separate regional subdivisions. What are their tasks?
— We opened the first regional office in 2007 in Ekaterinburg to expand the sales and support our partners of air conditioning systems in the Ural region. . Next year we opened the office in St. Petersburg. Once again, we have followed our clients’ demands: several Japanese car manufacturers had placed their factories in the region and were using our factory automation products.
As a result, we established the infrastructure for other businesses development on the regional markets. Now, in Ekaterinburg we have experts in factory automation, and, experts in air conditioners in St. Petersburg as well. The subdivisions in Ufa and Krasnodar set up last year are working to develop the business in the south of Russia and the Volga area, where we see high potential for the growth of sales.
— Mitsubishi Electric has signed a memorandum on cooperation with the Moscow Bauman Technical University. And it has also opened engineering centres equipped with your teaching test benches in about thirty Russian universities. What does this do for the company?
— Education support programmes are a part of Mitsubishi Electric’s global corporate social responsibility policy . It also gives a great advantage to business. We participate in the educational process of the future engineering elite of the country, we try to show our commitment to using high quality components and technologies among them. We try to teach them to know and take into deep consideration such things as “life cycle cost” and “quality”. We believe that such elements are necessary for further sustainable development of Russia’s economy . Furthermore, our laboratories and technical centres are used as technical support centres for our local partners and customers in the regions where Mitsubishi Electric does not have a direct presence...Cooperation with industrial universities gives a great opportunity to develop unique technical solutions based on Mitsubishi Electric products demanded in the regions.
— How many employees do you have in your company?
— About 120 altogether, but most of them are in Moscow, of course.
— Are there many Russians among them?
— With the exception of two Japanese, including myself, the company staff are Russian. .
— How do you select them?
— We have a selection-dedicated person in our company who is responsible for recruitment. She seeks out candidates based on the business units’ requests. We used to work with recruitment agencies, but it was not efficient as we had hoped.. You see, our “in-house” specialist is looking not only for a new staff member but a colleague. She pays attention not only to experience and knowledge level, but evaluates if a candidate can share our company values and corporate culture. We try to make integration smooth. On the first day at work, the new member receives our “New Employee Handbook”: a brochure containing all the information needed. The HR-specialist introduces the newcomer to the colleagues and shows the way around the office. New staff are introduced to the information security rules and main instructions. If we have several new members, we arrange an expanded introduction course which other members can join if they feel the need. We also train our employees’ English skills if needed by arranging a dedicated course.
— Did you yourself find it easy to adapt in Moscow? I believe the Russian way of thinking is quite different from the Japanese.
— It was quite difficult for me at first - language, traditions, and driving a car. And because I was far away from my friends and family. But by the time I had been here a year, I was used to everything, and now I enjoy both my business and private life in Moscow. Possibly due to my character: I like challenges, to learn something new, to understand another way of thinking, to get to know people. By comparison with the Japanese mentality, Russians are more practical, in my view. To some extent, I feel more at ease here than in Japan: I do not need to pay too much attention to the private lives of my neighbours, and they feel the same way about me.
— So Muscovites are not greatly annoyed by their Japanese neighbour?
— I am sure they are quite curious. We have absolutely different cultures. But on the whole the attitude to foreigners in Moscow is quite normal. They don’t think of them as anything extraordinary.
— Are you learning Russian? Or are you managing without it?
— I am studying it constantly, but I don’t find it easy. I don’t think a knowledge of Russian is essential for me as the General Director, in relations with the staff. They know English. At the same time, the more our company develops, the more contact I have with local companies and business partners. And it is better to speak to clients in their own language, more reliable and friendlier relations can be established that way.
— Do you have Russian friends now?
— So far my friends are mainly Japanese. Not knowing the language well, it is difficult to make close friends among Russians.
— Does your family live with you?
— No, they stayed in Japan. But I travel home once every two or three months, so everything is fine. And they sometimes come to Moscow.
— What do you do on days off and after work?
— At home, I read. I like to dine in good restaurants. In good weather I walk around in the city. I visit museums. My favourite places are the Pushkin Museum of Fine Arts and the Tretyakov Gallery.
— To sum up: would you advise your colleagues in Japan to start a business in Russia today?
— That depends on what sort of business they want to start. But for business in Russia, you must have reliable Russian colleagues and business partners, otherwise it will be quite hard to succeed.