Melston Engineering – a Russian company building for the future – signs up for erpec 13

By Nick Needs (erpecnews.com)

For the vast majority of international suppliers of retail petroleum equipment, the talk of doing business in Russia is still a long way from reality, with market knowledge and links with the people who really matter so often lacking in substance. Many suppliers have not even started to make serious inroads towards the East and names like Lukoil and Gazprom Neft, two of Russias leading petroleum retailers, remain to most as long term business objectives, which may or may not come to fruition sometime in the distant future. Language is the obvious barrier, but also there is a feeling of mystery and even mistrust on both sides of the East West corridor, which historically has not been conducive to good working relationships.

Having been gifted English as my primary language, it has been extremely fortunate for me and those like me, to enjoy the business benefits that my mother tongue brings, with most of the common world tending to view it as the default international method for communication. An advertisement for HSBC Bank displayed at airports around the UK currently, points out that five times more of the Chinese population are learning English, than there are English people, which for good or bad, demonstrates the point precisely. Globalisation, International news reporting and MTV are probably to blame for this fact of life, but it is not without problems on this side of the fence. If we had to wait for the English speakers to learn Chinese before any business could be conducted in China, I am quite sure that this part of the world would be extremely limited to localised trading. The same certainly applies to Russia and other emerging markets like India, Africa and South America.

It is therefore of major significance that companies such as Melston Engineering, based in St Petersburg, Russia, have come to the forefront of the market they represent, with an approach that embraces the needs of the more western styled organisation. An English version option of their website is a great asset in this respect and the capacity to talk in English if requested seems almost too good to be true. Also, the style of Melston Engineering’s approach seems to be tailored towards western minds, making it as easy as possible for the rest of Europe, America and other parts of the world to come on board with the vision it has created for Russia and the CIS. Melston Engineering CJSC, was established in 2005 on the base of a Baltic Trading company, i.e. Baltic speaking, which was then one of the leaders in the north-west region of Russia’s fuel market, specialising in construction of petrol stations in St. Petersburg and Leningrad Oblast. Since 2008, Melston Engineering has been a part of the Melston group which incorporates various other companies in construction, installation, pre-commissioning works, property investment and financial follow on of real estate projects. The company now has an extensive network of regional branches, representing all Russian regions and most CIS states. Melston Engineering is the only company in the Russian market to specialise in management of projects with respect to federal retail networks and was recently appointed as a main distributer of Dresser Wayne in the Russian Federation and CIS regions. Major clients include Gazprom Neft, for which the company is currently involved in a five year upgrading and re-branding programme of 1500 retail sites across Russia.

All the above contribute to the many reasons why we are delighted that Melston Engineering, represented by CEO Krill Frolov and Chief Visionary Officer Stanislav Parvitskiy, along with other companies like them from the East, have decided to attend erpec for the first time next year. The opportunities for suppliers are clear. To be able to have constructive conversations with established operators in the various regions they represent, which in the past may have become no go areas due to cultural and language differences.

The overall objectives of Melston Engineering, as stated on their website, is to achieve, within 5 years, the leading position on the Russian commercial engineering market and to enter the world service market, planning to develop the following business areas in the process: Integrated engineering services, including: consultancy engineering i.e. design of facilities, development of construction and monitoring plans; Technical engineering i.e. selection and ensuring the use of technologies as required for the construction and operation of facilities; Construction engineering i.e. performance of works involving construction of facilities, including the delivery and installation of equipment, acceptance tests and commissioning of facility; Participation in shaping the market of specialised services for management of federal retail network rebranding projects, which is new to the Russian business; Consolidation of partnership with major engineering companies of Europe, America and Asia, with the involvement of foreign engineers and designers; Development of own servicing base represented by Melston Service, for minimisation of clients' costs for warranty and post-warranty servicing of the equipment procured.

Melston Engineering’s published values of performance include; high corporate spirit and effective teamwork of engineers, architects, environmentalists, designers, developers, assemblers and other specialists to fully meet the customer's needs, which is to say the least a comforting approach when dealing with the international community. Interestingly, the shadow of a murkier past in the region, which clearly has been left behind, is contained in the following statement. “An absolute rejection of corruption and bribery, when dealing with customers and partners” Good to know! The full statement on this modern day ethical initiative makes eye opening reading and for this reason, I have included it within the article below.

Headed up, ‘Stop corruption’, it reads; “Melston Engineering understands that today, in the conditions of the Russian market, that corruption, bribery and "kickbacks" are often used as a quite effective tool to lobby someone's interests. However, use of the principle of incidental gains as a sound business tool, is becoming a vicious practice and prevents implementation of any effective projects and development of long term partnership. Besides, this practice is disadvantageous in terms of the economy: Even a huge bribe to a state officer or to other persons interested does not always guarantee the desired result. Melston Engineering maintains the following position with respect to such methods: We do not support corruption, we do not participate in money laundering, we do not use "black schemes" in our work, we do not take or offer bribes and we do not spend project funds of our customers for bribes. This position is guaranteed to save at least 10% of the budget and enables us to implement interesting projects with high reliability and quality to provide the conditions as required for serious and long term co-operation with our clients” I have seen this said in legal speak so many times over recent years in contractual terms and conditions offered in the western world, so putting some positive spin on this, I would say it is refreshing to read some text which makes its point so clearly. In Russia at this time it is obviously what the market needs in order to breed confidence amongst business partners.

As mentioned earlier, Melston Engineering retain Gazprom Neft as a major client and its recent upgrading and re-branding project on their behalf will I’m sure be of great interest to readers and other erpec delegates. The company commented “In 2009, we started the rebranding of the network of Gazprom Neft petrol stations. The project was expected to take three years to complete, with over 1,200 up-graded petrol stations planned to be commissioned: The Gazprom Neft petrol station project is the least expensive as compared with other similar projects on the Russian market. The work scheme is very simple; All of the petrol stations conform to the same standard, which ensures high quality of the assembly work and uninterrupted operation of petrol stations. Each facility was torn down into "industrial kits", which simplifies the continuous monitoring of vendors offers and enables us to choose the best offers in terms of a price-quality relationship. The existing monitoring system allowed for on-line tracking of the facilities status by the customer, making the required changes during the pre-commissioning phase. The company's engineering centre tracks the development of new technologies and promptly implements up to 3 innovations per industrial kit during a year. The project is now virtually completed and the differences between before upgrading and after upgrading can clearly be seen in the accompanying photographs”