DHV CISRussia is Our New Strategic Market

Author: Irina Basiliya December 2006

Personal observations: October 2006- DHV CIS are slowly moving from ‘saving’ DHV

presence in Russia to acquisition of new projects.- Successful negotiations with Unilever, Cargill &

Pepsi give hope.- Building up a committed dynamic team of experts

is under way.- We need to drive harder to build a winning portfolio

and our presence in food industry with internationalprivate clients.

- Our cooperation with BU in Amersfoort need to bestrengthened further to ensure that we capitaliseon both our local roots and global scale.

Our Niche in Russia- Waste water treatment & water treatment- Food industry- Private clients

• International competition betweenmultinationals & local players

• Local

John Cahill, chairman of PepsiCo Bottling Group(PBG), said Russia “continue to be growthengines for our European business with steadyvolume increases in carbonated and non-carbonated beverages”.

Why food industry- In the past few years only food and tobacco

companies have constantly increased theirturnover

- In the food the payback period of investments ismuch shorter. Investors can see returns after onlya year or two.

- Even with the unpredictability of the situation inRussia, this period is completely acceptable to themajority of investors.

Why food industry- Today, almost every leading world food

manufacturer has production facilities in Russia.- In the years of this investment boom, the leading

Russian market players managed to double theproduction within a few years

- Major Russian holdings are more than ready tocompete with Western companies.

- There is every reason to believe that the marketwill further expand in the near future

Our Niche: Water treatment- Indicators for selection

>4 years existence on the Russian market Production increased at least 1,5 – 2 times

Existing WWTP & Water preparationfacilities are out of capacity

Problems with (environmental) authorities Need for upgrade/extend/rehabilitate

(space/time/production – first priority) Our strong position in MBR and Nereda

Our services- A turn key projects- DB/DBO type of contracts

DO WE would LIKE TO ENTER it?

ARGUMENTS ARGUMENNTS ARGUMENTS

NO

If NO, no furtherdiscussion, BUT weneed to know thearguments

Lost opportunities Lost profit

DO WE would LIKE TO ENTER it?

pilot projectsUnilever

PepsiGargill

lessons learnedscope of workadded valuerisks/labilities

short-term

DEVELOP OUR STRATEGYAgree on procedure

Agree on key principalsAgree on objectives

budgetDHV RussiaDHV Amersfoort

Partners

human resourses

ALLOCATE OUR RESOURCESdivision of workgap analyses

capacity builduing programme

TEAM UP WITH PARTNERSRUSSIAN: WaterLand, VodGeo, etc

INTERNATIONAL: BiothaneNorit, etc

YES

If YES, we need to

Contract management

Our Vision

- Flexible patterns of cooperation• Alliances and partnerships –to cover the “circle” (from conceptual design to

permitting)• “Speed”of decisions&feedback to client is

crucial (procedures and rules)- Be price competitive

• Maximise workload in Russia• In favour of local staff, providing lower rates• NL – QC/QA

Our Vision

- Be aware of risks and try to control/minimise- Accept the reality :

business in Russia, with Russian designstandards, with Russian partners and inRussian language and Russian law/court

- Do not afraid of competition :try to understand why they are good and beeven better