Andrei Razbrodin: the fabric market is structured in a natural way, if we develop domestic garment production
Andrei Razbrodin, the president of the Russian Union of Entrepreneurs of Textile and Light Industry, gave this interview following the results of the Interfabric exhibition that took place at the end of August 2017, but the conversation went beyond the scope of an individual exhibition and touched upon the production of domestic fabrics, relationships with foreign suppliers and position of the state in the regulation of these processes.
– The business idea of the Interfabric exhibition appeared to make money for the needs of the Russian Union of Entrepreneurs of Textile and Light Industry, or is it a special form of work for the members of the industry organization?
– No, we did not set the task to earn money for the Russian Union of Entrepreneurs of Textile and Light Industry, because for two years now our budget is deficit-free – both from contributions, and from those income items that exist. But, of course, there are a number of things that need to be developed. This is a requirement of time and our companies. Therefore, the idea was born to organize an exhibition in Russia, as a review of achievements, first of all, domestic producers of the textile sub-sector, represented on a single professional exhibition and forum site, but with the mandatory participation of leading foreign manufacturers.
In the West, this approach is very common. For example, in Europe there is a system of subsidizing exhibitions through organizations that have information about which sectors should be supported in this way. The state delegates this function to accountable organizations, of course, it controls this process.
Five years ago, at Denis Manturov’s, the Minister of Industry and Trade of Russia, we discussed such issues. Even then it was clear that there is no professional exhibition in Russia, which would be in demand by a sector, could demonstrate the best achievements of the industry and made it possible to understand and identify the needs and tasks of the sector.
Thus, the Russian Textile Week appeared. At first, as a preliminary design project, LegpromForum appeared. As a result, we realized that this topic is in demand. Initially, the stake was made for the exhibition of equipment for the light industry ‘Inlegmash’. The agreement was reached with Expocentre, the exhibition operator. The first exhibition gave a positive result, still ‘clumsy’, in terms of performance, but, nevertheless, positive.
But next there was a Textile Week, several exhibitions were held within its framework. A large general exhibition-forum event was created. All the premises were almost filled, there were held simultaneous exhibitions ‘CJF. Children’s Fashion’, ‘Inlegmash’, ‘Techtextil’, but there was no ‘Interfabric’ exhibition. It appeared the next time, and this event became more extensive. This year Interfabric also became an autumn exhibition, and now it is held twice a year.
The Interfabric exhibition became for us some sort of a draft. Before us, from the very beginning, there was the task to make a classy, modern, high-quality, professional event that would be useful in general for the industry, for the textile segment in particular, and would meet a number of tasks that were set at the time in the Ministry of Industry and Trade. The tasks are correct and timely, we are tackling them today, although there are enough difficulties.
It is now clear that today’s exhibition does not meet the requirements that we are presenting to it. But we are confident in the result and strive to make the exhibition an integrated exposition area structured along the lines: fabrics, furniture fabrics, fabrics for home textiles, for the fashion industry, etc. These can sometimes be the same producers, but the essence trade, contracting and so on – are different.
There are things uniting, and there are absolutely specific, which come from qualitative indicators, they are needed by different sectors of the industry. Therefore, we plan to promote this exhibition in this way, that is, by recruiting, inviting professional participants, zoning it. In the same place we intend to organize a trend-zone, which will unite all directions. In the trend zone today, in my opinion, we have not done everything from the point of view of our ideas, but the ideology in it is laid down initially, in my opinion, correctly: to make the exhibition complex, professional, convenient both for visitors and for the exhibitors themselves, fill it with convenient services, interfaces, so that the result is the creation of a permanent professional industry b2b and b2c-site. I emphasize that there is still a lot of work ahead
– What, in your estimation, is the percentage of participants who are not satisfied with the exhibition, is it large?
– If you broadcast the opinion of those participants with whom I discussed the event, there were no unequivocally dissatisfied ones, those who will no longer participate. This is confirmed by our statistics on the results of the exhibition. I would like to emphasize that as of today, the spring ‘Interfabric’, which will be held on March 20-23, 2018 within the framework of the Russian Textile Week, is already 80% complete.
– Tell us about the composition of the participants at previous exhibitions that have already taken place. Is it mainly domestic producers or is there a foreign ones?
– I would not analyze the composition, seriously it can be analyzed in the spring, it will be more revealing, in my opinion. Many of our manufacturers did not come to our exhibition in the autumn because they already contracted the square at VDNH. There are among them those who participated in both events. It is they, who, for the most part, made a decision not to exhibit at VDNKH anymore.
At the same time, there is a good example of what we really need to strive for. There is an CPM exhibition which today, approximately, on 65% consists of domestic manufacturers.
I also consider it right to attract visitors and participants to make an exhibition not so much commercialized as professional, highly specialized, clearly built up ideologically, with maximum preferences and additional convenient services for participants. And exhibitors should be conscientious and professional market participants – domestic and foreign manufacturers.
– Does not the very title ‘Interfabric’ oblige to invite them?
– The fabrics have their own system of sale. I tell you this as a professional, including importing fabrics for own company in large quantities. We buy a certain category of fabrics for bedding, for home textiles. It has its own specifics, which I know well and, accordingly, I can freely discuss other market segments, how the market is built, and so on.
For today on domestic exhibitions there are basically intermediaries-second-hand dealers represented, that is not manufacturers of a fabric, namely secondhand dealers who buy, still it is good if drains of this year, and even drains of the last year. Therefore, we, our fashion industry, are very lagging behind in this situation. And many spend money on traveling to exhibitions abroad and there to buy these fabrics. The situation is not quite right.
What should we think about? The fact that the buyer is always right. The seller must do everything for the buyer to purchase the goods. And we get that we pay a third-party company, and as a result we lose competitiveness at a price. That is, we have an infrastructure system turned upside down. And it is natural that this system should be built in a new way.
Here again the European experience can be useful. For example, in the West there are special associations that, upon request, order wholesale lots of new fabrics for designers and small companies. These are not second-hand dealers who don’t buy new goods as until they not sell the goods in the warehouse. These are targeted purchases.
And we first need to change the system and understand who exists for what, and properly rebuild this structure. In our system, we must work with large producers. Because we have an annual program, we buy large volumes, we do not need intermediaries at all. We need a minimum price, we need high quality products for a certain time. It is clear that these requirements are met unambiguously by large producers. Anyone who does not fit into the deadlines will not stay in the market for a long time. I’m talking about the moments that are interesting for the market, and we are interested in additional working capital, deferred payment, western quality, set volumes, volume discounts, annual savings discounts, etc. This is also a system of work.
– If we talk about our producers-participants of the exhibition, in which directions did they achieve the effect of a significant presence?
– Let’s just say, certain types of fabrics for home textiles are available, appear and become of a better quality. For example, we now have a joint program with the ‘Vologda Textile’, we have redirected part of the purchases to this enterprise. They are now producing good quality satin. But many of the fabrics produced today in Russia are sent for state procurement, state defense orders, for state corporations, for special, working clothes, etc., are special high-tech fabrics, mixed, etc.
It should be noted that today ‘Tchaikovsky Textile’, a number of Ivanovo combines make very high quality knitted fabrics, fabrics. And with the proper construction of the market system, manufacturers will appear.
We have the needs of garment production. And it should be developed in the first place, I have been talking about this for a long time. If there is a need for tissues, it will be very easy to understand what fabric to do here and what to import. The market is structured in a natural way. Nobody dealt with this seriously, but, roughly speaking, due to the sanctions of the crisis that arose, due to the rapid change in the exchange rate, a situation arose when the logistics of stores changed. It became more profitable to produce some things in Russia, buyers began to pay attention to domestic designers: the quality is good, both individually and relatively inexpensively. And this immediately gave impetus to demand. It took fabrics, there were manufacturers who are going to produce this fabric.
– What is produced by our domestic companies?
– Much. These are mixed fabrics, and cotton fabrics. Now we are discussing a program for the production of linen and flax-containing fabrics with the Ministry of Industry and Trade and the Ministry of Agriculture. Let’s just say, everywhere there is a certain movement. It must be competently supported and turned into a trend.
Recently, at a meeting chaired by the President of the country, measures were identified that should stabilize the situation so that the industry grows steadily and naturally, that is, the industry will stabilize. What is happening so far can not be called pure development, because we have a delayed demand in a number of areas, and it is so large that if we invest in development, then the growth in our industry in some sub-sectors can reach 20-30% per year.
– Is a pricing policy being developed with respect to Western producers so that they come to the exhibition or is it not necessary?
– For now, we need to bring the exhibition to a certain level, up to certain volumes. But I would not want her to grow to infinity. I understand why we should give preferences to Russian producers. I do not understand why we should create a most-favored regime for Western companies? They want to enter our market, they have to pay for it. They do not come in large part because we do not have the volume of orders, we do not have infrastructure, approach, etc. Many of them work in the same way with resellers. We have difficulties with financing and lending, and they have money. Therefore, we often without working capital for the same goods go to the same reseller and take from him at a higher price to plug the need.
– So you are assuming that having reached an optimal volume, you will only be engaged in improving the exhibition, its quality content?
After that we will expand only at the expense of professional market participants. That is not at the expense of attracting resellers, intermediaries, companies that are incomprehensible to us, but in order to support the work of transparent companies, from which it is possible to create a regulated market, etc., which will correspond to the concepts, be built into the system.
– Do you have any future plans for improving the services for the participants?
– Now we only find out what services the exhibition participants need. This is the price of the lease, which would correspond to the concept of annual profitability. I mentioned this during the preparation of the meeting with the Russian President Vladimir Putin, all proposals are in the Ministry of Industry and Trade, some agreements are there, it remained to be implemented correctly.
For example, this includes subsidizing rent at Russian exhibitions, because this issue has been resolved at Western events. Even we can go there, and the rent subsidizes us. But the question is not to give up our own market here, because we have a small profitability. Roughly speaking, if we create a beautiful infrastructure in which raw materials will be purchased competently, the Westerners will occupy this niche first. They have money, they subsidize these things. Therefore, we must protect our market in this respect and better, if not by directive methods. Not by such methods: this is what we give to our people, but we are not allowed to enter here. Thus, we are destroying the professional environment. But when we legate our own, as the whole world does, we create a certain advantageous part for them, we are able to balance the situation.
– What do you lack as organizers? What would you yourself wish for the exhibition to be successful?
– Often there is not enough understanding – sometimes from colleagues. We must always have patience. Because as a person who is an absolute perfectionist in life, I’m never satisfied. I just try to move, learn, and some ideas, so to speak, run ahead of the locomotive. So sometimes you get angry, do not have the patience, do not want to waste time.
Still, I want the process to go fine, so that there will not be any periods in life, when for some reason you can not explain your point of view to people, but they can not understand it, and an element of inhibition sets in. Therefore – patience! Patience – it’s nerves, and therefore, health.
The Russian Union of Entrepreneurs of Textile and Light Industry is a public organization established in 2003. It aims to protect the interests of the industry business community, aimed at raising and developing the domestic light industry. Currently, the Russian Union of Entrepreneurs of Textile and Light Industry includes more than 300 enterprises of the industry. Andrei Razbrodin – is the owner of ‘Dargez’ textile association, heads the Russian Union of Entrepreneurs of Textile and Light Industry since 2012.
The international exhibition of fabrics and textile materials has been held since February 2016. The III International exhibition of fabrics and textile materials ‘INTERFABRIC – 2017.Autumn’ gathered more than 100 companies of manufacturers and suppliers of fabrics, knitted fabrics, lace, yarn, accessories from 15 countries. The exhibition was visited by more than 6,5 thousand industry professionals.
The next, the IV International exhibition of fabrics and textile materials ‘INTERFABRIC – 2018.Spring’ will be held from March 20-23, 2018 within the framework of the Russian Textile Week in 2018 (Moscow, Expocentre Fairgrounds, Pavilion No. 3). The organizer of the event is the Russian Union of Entrepreneurs of Textile and Light Industry with the support of the Ministry of Industry and Trade of Russia.