Long Haiyang: ‘The most difficult thing in Russia is to get used to the cold and paper document exchange’
The Board Chairman of CC7 — the PRC’s leading engineering company — gave Realnoe Vremya an interview
Chairman of the Board of Directors of the PRC’s leading engineering company — China National Chemical Engineering & Construction Seven, Ltd — Long Haiyang recently visited Kazan on business. He met with the management of TAIF JSC — the head company of TAIF Group — and later in an interview told Realnoe Vremya about impressions of the work and what surprised him in Russia the most.
Non-stop operation even at -40°C
Mr Haiyang, your company has already been operating in Russia for over 12 years. Four large projects have been implemented, another four are underway. What has been the biggest difficulty in Russia that’s different from the business in the People’s Republic of China?
The biggest difficulty at the onset of the operation in Russia was that we weren’t familiar enough with Russian legislation and Russian norms. But in the last 12 years, we have studied them. Also, cold weather frightened us, of course. We aren’t used to such cold weather. But we managed to adapt to the work in such conditions. We have already carried out works where the temperature fell to -40°C. Nevertheless, we didn’t cease operations (laughing).
You have noted that you had to face difficulties with legislation. What’s the legislative difference between the business in China and Russia? What was the toughest moment?
Perhaps, document exchange. When we approach the stage of mechanical availability in a project, a lot of documents are always required. In other countries, including in China, document exchange when implementing projects was computerised a long time ago. Everything is done electronically. At the moment, Russia has a lot of documents related to mechanical availability as well as other processes that must be provided in a print version. Whereas many documents have to be written by hand. It was unusual. But our engineers have already gained the necessary experience and knowledge. Also, we hired a lot of local employees and handle this issue.
Tatarstan and Sichuan are sister states, therefore we want to benefit Tatarstan
Which of the already implemented projects or those that are still implemented do you consider the brightest?
All the four projects we have already implemented were praised by clients. Our first Russian project was implemented in Mendeleyevsk. It also received approval from personally Tatarstan President Rustam Minnikhanov.
Why did you want to continue working in Tatarstan?
Our headquarters are located in Chengdu, Sichuan Province. And Tatarstan and Sichuan Province are sister states. Therefore we want to make our contribution to developing Tatarstan’s economy. For example, we invested in a metal works factory in Chelny two years ago. We also intend to make investments in a paint factory in Alabuga. Now we are conducting an analysis.
Is it a new project you have outlined?
In addition, we also want to invest in certain projects together with TAIF. WE have a great desire to start working with TAIF, successfully implement these projects and win high praise. As an international engineering company, we have a big practical experience not only in engineering and being a contractor in projects, we can also invest ourselves and attract investment.
We managed to mobilise during the pandemic
Did you have to refuse any projects or postpone their deadlines due to the pandemic?
We had force majeure, of course. After facing such a situation, we in any case discussed it with the client, searched for solutions. After setting our goal, we accurately moved towards achieving it.
You said at the meeting that thousands of people in your local staff here in Russia were laid off because of the pandemic. How did you solve this problem? Are you going to hire Russian specialists or come to an agreement to bring yours?
Now we can invite our employees in standard mode according to an official procedure. The case is that the permit had to be federal. This was in force until May. While now we obtain permits to invite foreign workers as usual.
Is it logical to assume that there was some economic damage due to COVID-19?
Yes. The prime cost of our works rose due to very strict requirements during the pandemic. We were required that these events have no negative impact on the implementation of projects. If some of our employees fell ill, all the work had to be suspended. But we managed to mobilise and prevent it. Of course, the requirements for following all anti-pandemic measures were tough enough to meet. But this was done to implement projects.
Can you evaluate how much the projects went up in price during the pandemic?
Certainly by at least 20%.
Since we have started to talk about finance. Russia is imposed certain sanctions by the USA, some European countries. It is impossible today to attract money from these countries’ financial structures. Did you feel it in the projects your company implements? If so, how was the problem solved?
This didn’t influence us at all because all our financing comes from China.
We’re used to working at a high pace
How do you assess the result of the meeting you had with the TAIF management?
This wasn’t the first meeting with TAIF. We started to meet in 2013. We would like to create a long-term partnership specifically after this meeting.
How much time does it take CC7 to develop a project on average?
About 2-3 months after receiving the terms of reference.
And to get a project, reach agreement?
An agreement is signed within 2-3 months on average.
Are the possibilities of CC7 limited in engineering projects for petrochemistry?
China’s Ministry of Commerce ranked us 7th in the sector as a contractor. As an engineering company, we’re first in chemistry and oil refining in China. We have 36 years of experience in implementing international projects outside China, and 11 years in Russia.
How tough is the pace that was set at the meeting for you?
We aren’t concerned at all. Our company has a big experience in implementing projects precisely in those areas that were discussed. The most important thing is to receive the terms of reference, technical requirements. With the necessary information about the client’s requests, we can quickly give feedback.
China National Chemical Engineering & Construction Corporation Seven, Ltd (СС7) is headquartered in Chengdu, Sichuan Province.
CC7 is a subsidiary of China National Chemical Engineering Group Corporation., Ltd (CNCEC), a large group of engineering and construction enterprises that is supervised by the State-owned Assets Supervision and Administration Commission of the PRC’s State Council. CNCEC is in the world’s top 250 contractors by the US Engineering News Record and second in the world’s rating of engineering and construction companies in the oil and gas sector.
CC7 is 11th on the list of 100 largest international contractors and 1st in the petrochemical industry in a rating published by the PRC’s Ministry of Commerce. The company has been operating in Russia for more than 12 years, including eight big petrochemical projects, which both have already been implemented and are underway.