The Russian Business Revelation in the 1980s by Richard Stettner

Export or die was a common expression, along with permanent complaints by Government ministers about the balance of payments deficit. Yet there were many people involved in trying their best to right matters.

Probus Club of Basingstoke member, Richard Stettner, was one such person and he told of his experiences in trying to find export customers for products made by his employer, Basingstoke based Wiggins Teape in the 1980s. While most will know the company for producing printing and office type papers like the famous Conqueror range, there was a different part to the business that had specific industrial applications made by their mill in Stonehaven near Aberdeen. This was the Industrial Casting Paper section for whom Richard was the Export Sales & Marketing Manager.

The Wiggins Teape paper mill at Stonehaven Aberdeen

This division made specialised paper which was the base material used by other companies in the manufacture of imitation leather for use in the automotive, clothing, shoes, fashion and upholstery industries.

Already doing business with some Eastern bloc countries, the thought was Russia surely had some potential?  But where to find customers in such a vast country? It seemed logical that Russia operated in a similar way to the other Eastern bloc countries where Richard had wide experience. In these countries state trading organisations had the responsibility of buying goods and services needed by companies in these centrally controlled economies. What central buying organisations existed in Russia and what protocols needed to be followed?

Based in London, a Russo-British Chamber of Commerce has operated since 1916. Prince Michael of Kent has been its patron for many years being related through his grandmother to Tsar Nicholas 11.  Annual trade missions took representatives of British companies to meet the Ministry of Light Industry in Moscow.

“Firstly, I had to submit to the Russian Embassy in London, details of our company and what business I wanted to develop in Russia” explained Richard. “Once accepted, other than receiving my visa and learning the name of the hotel I had no further information about who, when and where I was going to see in the seven days in Moscow.”

St Basil’s Cathedral in Moscow

On the first occasion, arriving in Moscow there was no customs control at the airport, purely passport control, with the party’s luggage put into the coach to take to the hotel. Their travel guide explained how things would operate during the week’s visit. At the hotel, each member of the party was given an envelope containing their scheduled visits for the week.

Bedroom keys were handed out by a lady guardian on each floor, to whom they would be returned to each morning. Bedrooms were large and basic with an empty fridge.

“We had been educated by the trade mission about the various surveillance techniques that would be used to monitor our activities”, continued Richard. “The whole top floor of the hotel was given to monitoring the guest bedrooms so it was clear that while away during the day my room would be searched to provide some evidence of private activity that might be used as leverage against me at some future date.”

Each morning every delegate was allocated a taxi for use for the whole day, irrespective of the length of each business meeting. The driver would take notes of which offices were visited, the duration of meetings and how any spare time was used.

The Ministry of Light Industry Moscow

Like all Eastern bloc countries, the Russian currency of the Rouble was not traded in the West and so hard currencies like US dollars, Deutschmarks and Pounds Sterling were needed for any purchases made by the trading companies. Hard currency shops existed where only Western money could be used, and while $10 would buy a pack of 200 Marlboro cigarettes their value to the Russian public multiplied many times.

 “Let me illustrate this in action,” said Richard. “One evening ten of us had a meal together and it was paid for by a pack of 200 Marlboro cigarettes.”

Consumer products were in short supply in Russia during Richard’s eight visits with the Chamber of Commerce, so he used to take products in his luggage to help maintain smooth relationships. Ladies’ knickers, sanitary products, toothpaste and cotton wool.

A further example of the surveillance techniques he encountered was the night he and two others went to the Bolshoi. That evening, instead of ballet, it was opera and rather than sit through the complete evening they decided to stay in the bar for a few drinks. They were the only customers while the performance continued except for a young woman across the bar. After a while, they asked her what she did for a living. She was a chambermaid at their hotel and worked on the same floor as their bedrooms. With the entrance to the Bolshoi priced in US dollars, meant few Russians had the currency to pay for the tickets and certainly unlikely for a lowly chambermaid. It was evident she had been set up to monitor their movements that night.

Was any business conducted? “A large order for 400 tonnes of Casting paper was achieved plus a subsequent smaller order, and at £1,200 per tonne was valuable.” Richard continued, “But as the forestry industry is an important component of the Russian economy and it made wood pulp, which Wiggins Teape constantly needed in paper manufacturing, there was an attempt to barter trade. We had one delivery of their wood pulp, but it was black and was of extremely poor quality meaning we didn’t use it. So that was the end of our relationship.”

Other Eastern bloc countries turned out to be more productive.