The Head of Euroinvest Holding Single-Handedly Created an Innovation Cluster

In autumn, many journalists’ attention was drawn to the news that a unique medical device capable of helping in the treatment of oncological diseases, primarily lung tumors, was about to be put into mass production in St. Petersburg.

According to some reports, the new device will arrive at the Petrov N.N. Oncology Research Center soon, and the Russian Academy of Medical Sciences would be the ones to receive it. N.N. Petrov Scientific Research Center for Oncology and all following units will be released both in Russia and on the international market, including China and countries of South-East Asia. The initiator of the breakthrough device was the St. Petersburg holding company Euroinvest, headed by businessman Andrey Berezin.

Through these development, it is worth understanding how Berezin and his company, which had been in construction for many years, managed to enter the medical equipment market with their resources and succeed in other innovative spheres.

Builders of New Cities

Euroinvest’s history dates back to the 90s of the last century, when two novice entrepreneurs, Andrey Berezin and Yuri Vasiliev, met in the northern capital of Russia and combined their efforts to make a business. Despite their status as beginners, both already had some experience; Berezin, for instance, had already taken his first steps into trade, arranging supplies of imported products and consumer goods to St. Petersburg markets.

The combined capitals of the two businesspeople provided enough to launch their large-scale project. Their decisions led to falling on construction, and since they knew their native city best, they chose to begin building there. The first development projects were successful and allowed them to continue and expand the activities they started.

Quite soon after this, Euroinvest became known to the masses. This happened after the company managed to open customers in several suburban settlements: Bugry, Kudrovo, and Murino. These were the territories of former state farms; by buying them out from shareholders, Berezin and Vasilyev created a vast construction site. However, the partners did not get greedy, instead allowing other construction companies into the clearing.

The result led to rapid growth of these settlements; Kudrovo and Murino received urban status, later becoming one of the fastest-growing Russian cities. However, it did not do without specific problems, which Berezin admitted himself. Not all emerging developers managed to maintain the limits of density and construction height, which caused criticism from urban planning experts. Nevertheless, the activity of Euroinvest in introducing uniform criteria for assessing the quality of housing has helped to bring order in this area.

After two decades of work in the construction industry, the company remains among the major developers in St. Petersburg, most notably in the Leningrad region. The company is praised for its quality both by customers and colleagues. The latest proof of this was the title of the most client-oriented developer in the region this year. The regional Union made such a decision of construction associations and organizations based on the contest results.

Agrocluster on Pause, but with Prospects

The owners of the company never limited themselves to what they had achieved. Successes in construction prompted them to consider further development and diversification of their business. Various options have been offered while searching for new niches that have been tested.

Among them is an exotic gold mine in an African country, though they had to get rid of it later. According to Berezin’s confession, the partners sold the asset with a sense of relief: it was too difficult to manage it and administer necessary measures from local specifics.

However, the investments were much more effective in more traditional fields, such as agriculture. At the beginning of the last decade, Euroinvest bought agricultural land in the Dnovsky district of the Pskov region, where it created its agro-cluster called Krasnoye Znamya. In addition to crops, it included a dairy herd of several hundred cows. A little later, the cluster had a dairy product processing line, topped with its MoleMe brand.

To achieve consistently positive results, large-scale capital investments were required. At the start, it was said to be about 400 million rubles, but in reality, the amount could be more. This included purchasing the neighboring farm’s facilities at the beginning of the year, including a fleet of agricultural machinery and barn buildings.

This allowed the cluster to stand firmly and attract large partners. A contract was signed with the Leningrad Zoo not long ago, according to which Krasnoye Znamya supplied fodder for its animals. Despite the relatively small volume of supplies, the deal was undoubtedly a decisive image-making step.

Despite this, the owners of the holding themselves estimate the prospects of their agribusiness rather reservedly. In his summer interview, Berezin pointed to the unfavorable foreign economic circumstances which arose this year, including the rise in fertilizer prices. At the same time, the managers of Euroinvest have no plans to get out of this business.

In the same interview, Berezin also stated that he sees the asset as having strategic prospects, including continuing global trends to increase food prices worldwide.

Science-intensive Klondike

The most productive investments for the holding happened to be in high-tech industries, including the development and production of electronics. About ten years ago, the first plant, Svetlana, was acquired, with two more enterprises later being added to it.

Their combined intellectual capital made it possible to launch a series of exciting developments. Among them was the robotic complex for oncology treatment mentioned at the beginning of the article. Beyond that, the company already had something to boast about.

One example of this is an innovative camera for rapid assessment of seed quality. The integrated X-ray unit lets you see all possible seed problems, whether it is malformations or infections. Equally, there is a device for heating the pavement based on microwave radiation. Unlike all existing analogs, the device allows you to heat the asphalt to its full depth, enabling you to prepare it for replacement quickly.

The sensor for remote estimation of ice cover thickness also created based on Euroinvest enterprises, is also of serious interest. It is no coincidence that Gazprom Neft became a project partner and planned to use the innovation in its northern projects.

Other teams of St. Petersburg developers are now creating several new generation batteries. One of them is intended to be used in a joint project with Almaz-Antey Concern to make electric cars, including drones. Power sources are being developed for handheld electronic devices, including smartphones and tablets. In other words, the placer of interesting, innovative projects in the Euroinvest portfolio looks fantastic.

This feeling, however, becomes even more significant when you consider that just a few years ago, each company creating them was under threat of closure. The period between the acquisition, the structural changes, and reaching of new horizons of development were all concise.

Berezin’s holding achieved such results through a combination of two approaches. Firstly, it was the generous investments in renovating the production facilities. According to some sources, each plant invested hundreds of rubles, and the total assets amounted to a billion rubles.

Secondly, serious efforts were undertaken to renew the management system. It is not only about new management; on the contrary, the new owners have retained mainly the former managerial staff of the factories. Much more important was the change in decision-making principles, including creating a new structural unit of the holding venture fund Euro Venture.

The fund was created to provide innovative projects with high-quality industry expertise. Experts with many years of experience gathered based on Euro Venture, jointly defining the viability of each initiative under consideration. The best of them receive a ticket to life through targeted financing.

An Epiphany with Consequences

We have already outlined the whole chain of Euroinvest’s evolution and its leaders’ approach, going from the development to the current intermediate finish, which became high-tech industrial products. This could have been the end of the story, but the events of recent months and years show that this evolution is far from over.

We can confidently assume that the very logic of involvement in innovation and technology will force the holding owners to take the next step and become active players in the professional education market. This is all the more significant since this is precisely what is happening right now.

In the summer, the company attracted attention by announcing the start of work on constructing a fundamentally new educational institution in St. Petersburg. It will be a governor’s lyceum (a school specializing in the education of gifted children).

The company intends to take on the construction of the buildings of the future educational institution and is planning to invest in it in earnest. The campus will include classrooms, laboratories with creative spaces, and a sports complex with a swimming pool. In addition, there will be living quarters since the Lyceum’s work is planned to be organized in a boarding format.

More importantly, however, Euroinvest intends to pay the most severe attention to selecting personnel for their institution. The necessary work is already being done; Berezin has stated that an agreement with some teachers from St. Petersburg physics and mathematics boarding school №45 (now Academic gymnasium named after D.K.Faddeev) have been made regarding their transfer to a new place of work.

It should be noted that the decision to create an academy did not appear anywhere. All their activities in the field of technology and innovation pushed the owners of the holding to it. When the investors got down to it, they faced a severe problem of lack of managerial, design, and highly qualified workers.

They decided to solve the problem in different ways, including inviting entire small teams from closed research institutes to their enterprises. Besides, they extensively cooperated with the leading St. Petersburg universities, trying to make them recruit future employees from their colleges.

All these efforts, however, were not enough. As a result, the company was forced into mastering another line of work – supporting young talents through partner projects and its actions. An essential element of this activity was the launch of the company’s scholarship for successful undergraduate and graduate students.

The main point is that the further the owners of Euroinvest immersed themselves in professional education issues, the better they understood how important they are for the future of the holding itself and the whole country. The decision to create an academy and the fundamental idea expressed by Berezin in his summer interview were the fruit of this understanding.

“For [the fourth industrial revolution that is happening now], markets don’t mean much anymore. This is the time of the knowledge economy. It’s the quality of what companies create that matters. If you know, you don’t need machines or markets. You come up with the product, and they will bring the rest for you: production and sales.

The only thing that matters is human capital and the country’s intellectual potential. In the world, only what you can invent yourself is valued. This happens everywhere. The main thing for us is not to fall by the wayside.”

Any responsible businessman in any country could subscribe to these words. The fact that such insights are coming to entrepreneurs in Russia shows that this country’s industry can still surprise many on an international scale.

For Reference:

Andrey Berezin was born in 1967 in Leningrad. In 1990, he graduated with honors from the Leningrad Ustinov Mechanical Institute. He graduated with honors from the Leningrad Ustinov Mechanical Institute in 1990 with a degree in automatic control systems engineering.

In 1993 he took part in the creation of the North-West Fisheries Company.

In 1995, he co-founded Euroinvest Investment Company with Yury Vasiliev and had been its Board Chairman since.

Today Euroinvest is a diversified investment company. 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 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 a full-cycle development business.

A relatively new direction for Euroinvest is the agro-industrial sector. 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.