In the context of the world war of sanctions, any narrowly focused business is susceptible to coming under attack. The situation is difficult everywhere, even in stable sectors with great credibility. One of the loudest news stories of October 2022 was the plans of the second-largest Swiss bank being published to optimize its 9,000 employees. This is why every big business worldwide should consider diversifying its assets. A striking example of this approach is in the assets of the Russian billionaire, Andrey Berezin.
The optimization of Credit Suisse’s staff tells a story from all sides. Swiss banks are a model of stability and adaptability to all challenges of our time, of which turned out to be unreliable. Having betrayed its principle of neutrality for the first time, joining sanctions and giving information on its depositors to intelligence agencies, the Swiss financial sector quickly suffered negative consequences. Arab and African countries began withdrawing their funds in droves, causing unprecedented damage to banks.
The news quickly spread worldwide because, previously, Swiss banks had coped with all kinds of difficulties thanks to their assets’ pervasive and diverse structure. Consequently, they were not afraid of experiments or international pressure. For example, there was a quartz crisis 50 years ago, and the entire watch industry was on the verge of bankruptcy; it was the bankers who bought manufacturers and created the company Swatch, currently the most prominent specialized holding company in the world. Today, the situation is fundamentally opposite, and the financial sector is likely to be bought out.
Credit Suisse’s optimization was preceded by a report of quarterly losses of 250 million francs. That’s 15 billion rubles in our money. Although the bank does not plan to recover independently, it expects to restructure with funding from Saudi Arabia radically. For the Arabs, this is just a matter of diversification and the groundwork for the future. Saudi Arabia and the UAE have long expected to pull the blanket of the world financial center; oil is not infinite, and new niches are needed for a secure future.
It is impossible to live by the old rules in the modern world – they are a thing of the past together with those who cannot give them up. Only those who manage to adapt to the constant changes successfully develop. Berezin and his company Euroinvest is a great example of an entrepreneur who can change to meet the challenges of time. His way is a history of a continuous assault on new and new industries, accumulating experience for subsequent use in other areas.
Development Basis
A businessman’s ability to adapt does not arise on its own. Instead, it indicates high professionalism, extensive experience, and exceptional personal skills. Andrey Berezin, an engineer by training, began his business journey by organizing grocery deliveries from Great Britain. This was done in the 90s, a time when the food crisis across the country devastated the grocery shelves. The business was successful, but Berezin decided to move on from it.
In this move, he tried his skills in the fishing industry. This was an equally problematic field at the time as the Soviet fishing fleet, the largest in the world, had been majoratively destroyed. For comparison, there were more than 7 thousand fishing vessels in the USSR. In modern Russia, it has hardly reached one thousand and a half, and only 1% of them are younger than 25 years. Nevertheless, Berezin and his partners helped to establish North-West Fishery Consortium, which is working successfully to this day.
A few years later, the company Euroinvest was created, and the businessman mastered for himself the development sphere. Construction from that moment became the critical sphere of Berezin’s activity and financial basis for all other directions. It should be noted that Euroinvest achieved the most outstanding results in the construction sphere due to its revolutionary approaches to work.
Euroinvest quickly absorbed the experience of the best international construction companies and developed its chip for each residential complex. Its first projects were implemented in Murino and Kudrovo, the dynamically growing suburbs of St. Petersburg. Murino, at the beginning of the noughties, was a small town of 5000 people. Since that time, a new town has been built, and now it has almost 90,000 people. A similar story to Kudrovo, it is a village where 137 people lived 12 years ago. Now, it’s population stands at more than 60,000.
In many ways, these new towns were built by Euroinvest, which implemented some unusual ideas everywhere. For example, in Murino, the residential complex features co-working spaces and public spaces. This is unusual for economy-class housing. In Kudrovo, we tried a different approach and organized a spa on the roof for economy-class housing.
In the future, such ideas have become more ambitious and large-scale. In the latest development projects, special attention is paid to educational elements. Berezin has detailed his plans extensively, notifying buyers who feel reassured and positive about the project: “as for ID Park Victory, there will be a whole cluster of educational classes for children and adults on the first floors. This is a new consumer trend […] in the future, Euroinvest Development will engage in integrated neighborhood development.”
The Euroinvest development direction is further developed with the help of the most modern technologies. They allow personalizing new projects even more deeply. For example, a new residential complex, which is being implemented near St. Petersburg, includes several features. The first of these is intelligent appliances and utilities, the management of which is integrated into a single mobile application. In addition, the complexes have extensive public and educational spaces.
At the same time, the company is developing in the direction of communal technologies. One of the assets of Euroinvest is the Murino management company. It is not only the operator of the public utilities for the company’s residential complexes, but also designs and builds heating sources. It provides a comprehensive package of services for the facilities of other developers, and it is currently a self-sufficient unit.
Industry
Andrey Berezin was always eager to try new lines of business, but not all ended up being part of the holding. Nevertheless, investments in the industry were a successful start.
Since 2012, Euroinvest has been engaged in purchasing and reanimating old Soviet industrial enterprises, which helps to build an effective financial system and bring the most promising developments to the competitive market. Notably, each promising development in the industrial sector receives spot support through Berezin’s Euro Ventures fund. The experience of venture investments will allow the developers to support promptly and targeted, helping new ideas to pass all necessary tests quickly and resoundingly so that it can reach the stage of industrial production. Many exciting ideas are supported, but we are talking about several flagship products.
In particular, one of the critical projects developed with the financial participation of Berezin was a robotic medical complex for the diagnostics and treatment of oncological diseases. This device is Euroinvest’s first attempt to enter the medical equipment market. All stages of development and testing of the apparatus have been completed, and now the location of clinical trials in one of the leading oncologic centers of the country is starting.
Notably, the final stage coincided with the beginning of the sanctions war, leading to a severe medical equipment shortage in the Russian market. Although this category was never directly on the sanction’s lists, supplies were hampered by financial and logistical constraints. Any European equipment goes through a complicated chain of external suppliers, and the availability of a modern domestic product can significantly facilitate the work of healthcare.
Another promising project by Berezin is participation through his company in the Almaz-Antey Concern’s electric car project. This is one of several projects announced in the country in the last few years, but one of the most realistic ones. The pilot model has already been demonstrated at a specialized exhibition, and industrial production is planned for 2024. Euroinvest will supply the future car with lithium-ion batteries.
Another promising area in which Euroinvest is actively investing is the production of semiconductors and microelectronics. This sector still needs a lot of work to increase the competitiveness of the products. Nevertheless, the groundwork has been done, setting up the business for the future. If the semiconductor crisis in the world does not find its solution, it will become a valuable asset of the holding.
Berezin sees many prospects arising in the industry, hoping to diversify his portfolio and the assets within the sector – “it is clear that manufacturing is not particularly cachet at the moment, but in terms of capitalization and capabilities, manufacturing is a story about the future. The tools and resources in the future will go to those with the brains, personnel, intellectual capacity, capital, and collective intelligence. This is the total value of the coming years.”
Agriculture
Against the background of real estate development and industrial activity, agriculture seems to be an alien element. Despite this, Euroinvest is still achieving good results in this area.
For several years, the company has been buying up agricultural assets in two Russian regions, Leningrad and Pskov, and then stitching everything into its small agro cluster. Some of the assets that belonged to the Leningrad Region were later not claimed, but the Pskov part was widely supported by the state. The fact is that this region belongs to the ten subjects with the lowest level of socio-economic development. They all received individual socio-economic development programs amounting to about 10 billion rubles. All of them implied extensive support for rural areas and the agro-industrial complex.
As a result, it turned out that within a few years in the Dnovsky district of the Pskov region, the old Soviet production was completely reequipped, received modern processing facilities, absorbed the cultivated land for growing fodder, and became one of the leading farms of Northwest Russia. To compare it with the most significant agricultural holdings is hard, but the subtlety is in the financial costs. According to Berezin, his Krasnoye Znamya complex became self-sufficient after the first 30 million rubles investment. For a large dairy farm, this is already a good indicator.
After investing several hundred million rubles, he created a fully autonomous farm with over 700 cows. For comparison, similar European projects cost their investors more than 2 billion. Krasnoye Znamya is widely represented in every major city of the Pskov region, and its management plans to gradually enter the markets of neighboring areas. For this purpose, the company’s brand is now widely advertised at all specialized exhibitions, and its products are supplied to retail chains and public catering enterprises. In addition, preliminary information from consumers is being collected to create a working scheme for further brand promotion.
Ability to Find New Perspectives
Berezin is open to new directions, boldly trying his hand at even the most exotic areas of business. Despite his successes that have positioned him as such a significant businessman in Russia, he is not always successful. The purchase of gold mines in Burkina Faso is a notable example of his false judgments on a project.
In theory, such an acquisition is a regular practice in this African country. Most of Burkina Faso’s mines are operated thanks to foreign investment. In practice, however, managing such a remote asset proved too demanding, and the mines had to be sold. At least Euroinvest managed to recoup all of its investments.
Nevertheless, the main sentiment is that the company keeps trying new things. While many other holdings start to collapse because of difficulties in one narrow specialty, Berezin continues a race to diversify. An interesting new direction of the company is education, which will allow the company to form its own personnel reserve in the future. This means even less dependence on market turbulence.
When speaking about his future plans, Berezin said this in a recent interview: “This is the most important issue in the country at the moment. If in the USSR, personnel, including scientific ones, were trained by the thousands, and manufacturers could choose, now it is not thousands, but dozens of people, and in some areas, there are only a few specialists. This is a huge problem. So far, it is still possible to leave the old personnel, but it will be a disaster in 5-10 years. So the main task of the country, in my opinion, is to invest into the personnel in the nearest 20 years actively, otherwise there will be no breakthrough.”
This is the way the whole world has to go now. Covid has broken the traditional supply chains. Sanctions have entirely changed the fuel market within half a year. The consumption crisis has led to overproduction in some economies and a decline in demand in others. When such radical changes that used to take years to occur are now happening every month, the one with many alternative sources of income in reserve is going to come out victorious.