St. Petersburg Businessman Andrey Berezin Creates an Unusual Industrial Cluster
At the end of August, the St. Petersburg Industry Development Fund announced the allocation of loans totaling to 280 million rubles between four municipal enterprises. The most significant share went to the Recond plant, which produces different radio elements. The equipment purchased with the loan money will be used to manufacture multilayer ceramic capacitors. According to Governor Alexander Beglov, this decision is primarily due to the importance of radio electronics for import substitution.
It appears that the multi-million-ruble loan and the attention of the head of the region are considered a great victory for the enterprise. If we look at the recent history of the plant, we can come to the logical conclusion that today’s results are only a consequence of some correct and timely decisions that were made in the past.
Investors as Positive News
Last year, the plant’s fate was under serious doubt. Its financial results left much to be desired, and the material base is not only morally outdated, but primarily worn out.
The loss of this enterprise would have been a problem for the town, but the town administration is not infinite in terms of its capabilities either. Specialists remember a lot of cases in recent years when industrial sites went bankrupt. Metal works KSM Severo-Zapad, with a staff of 150 people and a revenue stream in the billions, quickly disappeared, despite many efforts to save it.
If something similar happened to Recond, it would not surprise anyone too much. Even in comparison with KCM North-West, the departure of Recond from the market would have a profound negative meaning. The plant was originally a production site of NPO Positron, the center of development and production of consumer electronics, once the thunder of the entire USSR and the socialist camp.
Despite Recond sailing on its own since the 90s, the industry has not forgotten about the past. The plant retained ties with other subdivisions of the former Positron, including the Girikond Research Institute, where they still share one building complex. Moreover, city officials repeatedly and publicly discussed the restoration of the single research and production association from high rostrums. As long as the plant lived, these hopes still had a reason to exist. If it had disappeared from the map, it would have been abandoned.
That is why news about a new strategic investor coming to Recond was received positively this winter. As a result, the Euroinvest group, headed by Andrey Berezin, gained control over the enterprise.
Products of Recond factory:
- Various types of capacitors (ceramic low-voltage and high-voltage capacitors, trimmers, tantalum oxide-semiconductor capacitors with solid and liquid electrolyte, film capacitors, thin-film capacitors)
- Special purpose microcircuits
- Light- and photodiodes, optocouplers, infrared receivers
- Special devices for information protection
Experience Has Already Been Gained
The new owners announced that they would invest more than 500 million rubles in the development of the enterprise, 200 of which in the renewal of the equipment. They have already shown that they are keeping to their word. The reason for the current article is the allocation of the loan of 115 million rubles from the city treasury, which resulted from Euroinvest opening a funding line for Recond. Through this scheme, the public funds were contributed by the executive authorities who wanted to support the modernization of a critical enterprise.
Despite this, is it possible to think that everything will stop there, that Berezin’s structures will just give money for purchasing new machines and expect better results? On the contrary, the holding’s previous experience in the industrial field testifies that plans usually go much further.
A striking example is the Svetlana Plant, which had come under Euroinvest’s sphere of influence ten years earlier than Recond. Moreover, it helped to upgrade the equipment and the infrastructure, having spent hundreds of millions of rubles on it. Berezin’s team brought new managers to the enterprise along with the finances, along with introducing new approaches to activity planning.
A venture fund called Euro Venture was established within the holding structure to implement the latter. The fund brought together experts in the industry, technology implementation, and innovation. They are now determining which projects can benefit Svetlana and the entire holding whilst deciding which of these projects are destined to not be part of the holding’s future.
The results of this policy have been noteworthy. Over the past few years, Svetlana has regularly made the industry news for good reasons. A substantial part of them is related to the development of modern medical devices. One such example is of a robotic complex for radiation treatment of lung cancer pathologies.
The robot is undergoing final revisions and approvals before being put into mass production. As many specialists say have pointed out, the market will not let it get stale. Clinics are waiting not only in Russia, but are also established in China, India, and several other countries (primarily in South-East Asia). There are two reasons for this interest; the first reason is the price, which is significantly lower than the market counterparts. The second reason is the tremendous number of opportunities the device offers clinicians. This is because it can be used directly during surgery by targeting critical areas. This results in high efficiency with minimal to no side effects.
The plant team achieved equally significant results in biochip development. The devices ended up being indispensable in diagnosing various viral agents, including coronavirus. The new generation of biochips currently being created at the plant can dramatically expand the prospects for the development of genetic medicine, including making full-scale genetic diagnostics of humans available.
However, Svetlana has made sure to expand his horizons into exciting projects outside just the field of medical equipment. Another recent development concerns seed quality assessment. The plant has created a prototype of a mobile X-ray camera for seed screening, which can clearly show various problems, from diseases and parasites to development defects.
The company is also working on projects in the field of high-frequency currents, including a device for heating asphalt surfaces. Based on the principles of ultrashort pulse location, a sensor for remote estimation of ice cover thickness at various objects is being created. Russian oil companies, including Gazprom Neft, are interested in the latter development for the improvements it could make in efficiency for the task.
Another participant in the industrial portfolio of the Euroinvest holding is worth mentioning – the Rigel battery plant. Berezin’s company became its owner a couple of years ago, and the circumstances under which it happened are broadly similar to the story of Recond.
Although not much time has passed since the purchase of the battery production facility, the results of these measures have also had time to manifest themselves. For example, promising agreements concluded with some significant players in the Russian hi-tech market. Among these players is St. Petersburg State University, with which Rigel will create a laboratory for developing energy-efficient and safe batteries.
The agreement with Almaz-Antey Holding is another promising notion for the plant. The St. Petersburg-based company will make traction batteries for crewless cars, which Almaz Antey plans to create based on its own E-Neva platform.
Furthermore, the joint work that Rigel has started with another well-known battery manufacturer, NIAI Istochnik, can also be added. The two companies plan to develop new generation power sources for mobile electronic devices, including smartphones and tablets, i.e., the most mass-produced equipment.
Lyceum as a Сonfirmation of Ambitions
It must be noted that Berezin had more ambitious goals by acquiring Recond than his two previous ventures. This ambition is proved by his own words said shortly after the acquisition. This was nothing less than the rebirth of the NPO Positron.
A private entrepreneur with a solid grip and interest in innovations took up its realization because he saw considerable economic prospects in restoring the former giant. Berezin spoke about these ideas in a recent interview regarding the topic: “Today, we see successfully and actively developing enterprises in the sphere of domestic electronics, which confidently passed the pandemic, increased production volumes, and are profitable, so we have reason to believe in this industry, despite the crisis, inflation, and sanctions. By the way, inflation has led to the fact that today it is already cheaper to produce some products here than in China. And this trend will continue. Thus, our electronic products have all the chances to meet the domestic market’s needs and gain broad export prospects. And the international deficit for the components of the component base for electronics, which has developed over the last year, only confirms that investing in this kind of development and production is strategically more than profitable.”
Whether the head of Euroinvest will succeed in the realization of this truly Napoleonic plan is too early to say yet. In any case, it should be kept in mind that since the acquisition of Recond, the situation in the country’s economy and the world has changed significantly, not for the better. However, it is safe to say that Berezin did not give up on the idea of recreating Positron. There has been continued investment in the plant’s material and technical base, all of which can be direct evidence of this. There is also the indirect proof of the growing interest of the entrepreneur in education. This is logical because creating such a robust innovation-industrial structure is unthinkable without the inflow of a considerable quantity of qualified personnel.
During the last year, much work has been done in this direction. The company has started with the conclusion of formal and informal agreements with all of the largest universities in the city and ending with the promotion of some partnership projects. For example, lines of support from Euroinvest for educational sites of the L. Euler Foundation, which helps young mathematicians develop their learning and pursue a career in the field.
The latest initiative has caused a mini sensation in its scope. In the summer, Berezin stated that the holding company started to create a principally new educational institution in St. Petersburg, the governor’s academy for gifted children. Euroinvest intends to undertake, among other things, the design and construction work that has already begun.
The plot for the academy was found within the city boundaries, on the shore of Lake Bolshoye in the Kaselevo neighborhood. It is spacious enough to house several buildings, including classrooms and living quarters, laboratories and creative areas, a sports complex, and a beach with a pier.
The holding was also concerned about the selection of teaching staff. According to Berezin himself, there have already been agreements that the basis of the lyceum staff will be teachers from one of the best schools in the city, the Physics and Mathematics Boarding School №45.
Thus, it is clear that the approaches of the Euroinvest holding and its head, Berezin, are working. They are good at stabilizing the work of industrial enterprises and organizing their renewal. Moreover, the feasibility of the declared ambitious aims of creating scientific and production clusters out of separate plants is confirmed. Therefore, it is probable that in a year or two, the efforts of the holding management will bring about systemic changes in the industrial sector of the whole Northwestern region of Russia. Despite this, suppose the authorities and businesses of the country are interested in accelerating the development of the industrial sector. In that case, they should pay the closest attention to the experience of Euroinvest today.
History and Biography:
Berezin was born in 1967 in Leningrad. He studied at secondary school #239 with a profound study of mathematics. In 1990 he graduated with honors from Leningrad Ustinov Mechanical Institute. In 1990 he graduated with honors from the Leningrad Ustinov Mechanical Institute, where he specialized in automatic control systems for aircraft. After his graduation, he enrolled in postgraduate school and simultaneously went into business.
In 1993 he became one of the co-founders of the North-West Fisheries Company. In 1995, together with Yury Vasilyev, he founded the investment company Euroinvest and became its Chairman of the Board.
Today Euroinvest is a diversified holding company that includes companies and projects from various economic sectors.
One of the directions of Euroinvest work is legal and engineering support for the developing land plots and territories in St. Petersburg, the Leningrad region, and other areas.
At the end of 2017, Euroinvest Group created its construction division Euroinvest Development, which is engaged in the construction of housing and other objects, thus forming an entire cycle development business.
A relatively new direction for Euroinvest is the agro-industrial sector. For example, Agrocluster Krasnoye Znamya in the Pskov region specializes in producing grain and fodder for livestock.
In May 2017, the management of the Euroinvest investment company established the Euro Venture fund with an initial amount of € 10 million. Priority areas for investment are innovative developments in the scientific and technical sphere, as well as projects in the creative industry.