Specialist companies see big opportunities in store

Rocklabs' Moscow-born geologist Oleg Pavlenko says a big benefit of the Russian Free Trade Agreement would be working with surrounding countries. Photo / Greg Bowker

Trade Minister Tim Groser, in Moscow for talks with his Russian counterpart on a proposed Free Trade Agreement, says there is an opportunity in Russia for New Zealand manufacturers to export specialised products.

Kiwi-manufactured goods face import tariffs ranging from 2 to 20 per cent in Russia.

One New Zealand company that has already honed in on a niche market in Russia is Rocklabs.

The company makes machines that crush samples of ore and test them for mineral content.

Rocklabs was sold in 2008 to NZX-listed Scott Technology - which reported an operating revenue of $31.3 million last year.

The Onehunga company has exported to Russia since 2000 and has customers that include mining giant Norilisk Nickel, according to Rocklabs' Moscow-born company geologist, Oleg Pavlenko.

He said the firm sent one-third of its exports to Russia, but was forced to pay duties ranging from 5 to 10 per cent.

"The biggest benefit [of the FTA] would be the possibility to work not only in Russia, but with surrounding countries," Pavlenko said.

Groser said Russia's Customs Union partners Kazakhstan and Belarus would be included in a successful FTA, presenting "a unique opportunity for New Zealand to future proof its relationship with an emerging economic powerhouse".

Pavlenko said there was a long history of New Zealand firms supplying Russian mining companies - going back to the early 20th century - and the FTA had the potential to build upon that relationship.

"It's a very good opportunity," he said.

Margaret Comer, corporate services executive of Hamilton's Gallagher Group, which has exported a limited number of its products to Russia since the 1980s, said it was now a difficult country to do business with, but hoped the FTA could improve the situation.

"We see [the FTA] as a great opportunity. If we can get an arrangement with Russia that would be wonderful."

Gallagher's animal management division was already exporting its electric fencing products to Russia, and Comer said there was scope in the country for its access control (swipe card) technology, particularly in the mining sector.

"[The FTA] will create great relationships."