Maksim Savinkov, CSort: ''When these iron units start ‘singing’, it really brings the house down''

''Then I understood that the future lied with such equipment''

Mr Savinkov, you started with selling western photo separators in Russia. How did you decide to master their production?

I became an entrepreneur in 1995, then I obtained my first patent when I was studying at university. Then I tried everything – sales, services, production of mayonnaise, sunflower oil, seeds. When I had a butter factory, we faced a problem of shelling sunflower nucleus. These shelled seeds went to a bread factory, they were added to bread. We needed to sort these nuclei because sometimes they could be damaged. It was in 2003. We looked for equipment that would sort seeds. In 2006, we bought this equipment, and our productivity of sorting immediately grew from 3 to 90 tonnes a month. Then I understood that the future lied with such equipment. I had many acquaintances who dealt with sunflower seeds, we began to bring and sell this equipment. Then I did not understand it could be another business, it would need to be serviced. I studied information and measuring equipment engineering. This is why this topic was familiar and close to me – electrics, maths, mechanics. All those people who bought similar equipment repeated the success we had achieved. They were content. That's why we decided to create a company selling photo separators. It happened in 2007. We were three then, now 108 people work. We began to bring photo separators from abroad and sell in Russia.

Where did you bring the first equipment from?

Chinese were first to start working with us. I even did not know there were manufacturers besides England. But England refused to work with us because they did not have a service centre in Russia. And their principle was – no service – no sales. And then they sold only second-hand equipment. A photo separator is quite complicated equipment and a second-hand version… We decided not to deal with such equipment. We started to work with leaders of the Chinese market, then understood the quality of the Chinese equipment was bad, we started to bring Korean. But their equipment was very different from Chinese. Then we switched to Italian products. In fact, we had two segments. One was more expensive, with higher requirements for installation, service, quality of product sorting. The second segment sorted mono products. For instance, a factory makes semolina from wheat. And all additives need to be cleansed to make semolina snow-white.

At one point, it became clear we improved nodes of this equipment. And we tried to make the completely improved equipment on our own. It was quite good equipment

Why did you decide to create your own photo separator production?

The motive for creating a factory is very simple. When I went to China, I was said that their equipment could sort rice, but it wouldn't be able to sort sunflower seeds. This is why we had to modernise the equipment. Then we 'made' it sort pea, wheat. So we gradually developed the application of the photo separator. As an engineer, I noticed deficiencies in software, electronics. At one point, it became clear we improved nodes of this equipment. And we tried to make completely improved equipment on our own. It was quite good equipment. Of course, the photo separator became scrap metal in the future, but it was able to work.

How long have you been making photo separators?

For about 6 years.

How much does one unit cost?

About 2,5-3 million rubles.

It is a luxury. Do you offer your clients instalment payments? How fast does the photo separator pay back?

We have our own sales specifics. The sales cycle of our equipment is 1,5 years. We demonstrate how our units work in order not to sell a pig in a poke. Earlier we gave it for a month to test. The payback of some plants is one month. For instance, there is a volume of yield that is prepared for sale as seeds. But its weed estimation is too high. If this product is sorted by photo separator, its price will grow 3-5 times.

I don't think the payback of our units increases one year. Now we are making a new model like sale of working hours or sorting kilogrammes when the client won't need to buy the equipment. He will purchase sorting services or give part of the benefit that forms besides the sorted product. We could also maintain the equipment. We are going to test such a model this autumn.

''Buyers from the SAR or France are very different from Russian buyers than Tatarstan clients''

The sales geography of your company on your company's website has three cities in Tatarstan – Kazan, Yelabuga and Nurlat. How are sales of your equipment in the republic doing?

It turned out that we sold five units in Tatarstan 2 years ago. The buyers reached signing of an agreement, and, for some reasons, the story ended so. I decided that the All-Russian Field Day would drastically change the situation with the Tatarstan market. We came to your Laishevo District this July. It was heavily raining all day long. There was a handful of people on the exhibition where we presented our products. This exhibition gave us only two clients. Everybody tells me about the 'specifics of the Tatarstan market'.

Do they exist?

I don't know. I came to Tatarstan with a delegation of Altai Krai, Field Day was here. I have groupmates on Praktikum programme in Skolkovo from the republic. I did not notice any specifics of the market.

It is maybe more difficult to come here than top other regions?

Buyers from the SAR or France are very different from Russian buyers than Tatarstan clients, you know. We treat residents of all CIS countries equally.

''When these iron units start 'singing', it really brings the house down''

Photo separators have many features to sort a product. Does it mean the more features there are, the better the separator is?

Every consumer gets its benefit from the photo separator. And it doesn't need to have many features. We have neuron algorithms that enable to sort complicated products, but they are useless for simple products. Such a complicated photo separator has about 15 sorting criteria. It is used to sort tea. Meanwhile, there are very simple criteria – to make a product look monochrome. Such separation is made for millet.

A complicated photo separator has about 15 sorting criteria. It is used to sort tea. Meanwhile, there are very simple criteria – to make a product look monochrome

How do photo separators develop? People said you've had music photo separators.

We obtained a patent for such units. Why do we need it? It was done for exhibitions. The sound they make was used to test the ejectors' work first. One can understand whether the ejector works or is broken by its sound. We thought we could make the photo separator 'sing' if we tuned the sounds in a special way. We looked that the sounds fit 2,5 octaves. We tried to play Grasshopper. It was not good. But Bach was. This year we participate in 27 exhibitions, 15 of which are international. It is very difficult to draw attention there. And when our photo separators start performing songs, participants of an exhibition see that we understand something in it. In our creative classes, we even taught it to 'sing'. The unit's voice is similar to that of Levitan. An exhibition is a show. People go there with kids: to have a rest, eat popcorn, look at achievements. Magicians very often participate in exhibitions. Girls' clothes are taken off, they are painted and sent to walk along the stands only in Russia. Visitors find it boring to look at iron machines all day long. But when these iron units start 'singing', it really brings the house down. Our stand has so many visitors that all four managers who worked there could not take a seat.

''I would like to try to run this business with business sharks''

What a volume of exports do you aspire to have?

Our road is to increase the export. Export sales will account for up to 90% of our sales in the future. In our opinion, the world market is 100 times bigger than the Russian market. And we are interested in it. Now we are preparing for an exhibition in America, we will go there this December. America is the citadel of entrepreneurship. I would like to try to run this business with business sharks. If it was born and develops there, I would like to compete with real masters. Asia is the second destination that is important for us – Thailand, Vietnam, India, Myanmar. We also see development prospects there.

How are you going to compete? Are your products cheaper?

We hope we will be lucky. It is a normal business idea. We were very lucky geopolitically. As a citizen of Russia, I regret, of course, that we became poorer right 2 times because of the devaluation. But as a director of an enterprise that deals with export, I understand it is a unique chance to enter the world market. In Russia, the equipment started to cost 30% cheaper.

From a perspective of quality, we have our own unique peculiarities, which enables us to make updated models of photo separators. Available service is our advantage

Does it mean that in the world market your product started to have a more attractive price?

Yes, we started to export right when our units became cheaper. From a perspective of quality, we have our own unique peculiarities, which enables us to make updated models of photo separators. Available service is our advantage. The problem of equipment repair is solved instantaneously. The company has offices in Barnaul, Krasnodar, Samara, Novosibirsk as well as in Germany, Bulgaria, Poland, the Czech Republic, Iran, Ukraine. Our Foreign Affairs Department speaks the English, German, French, Spanish, Czech, Vietnamese languages.

Are the spare parts that you use to make units only Russian or do you have to purchase any details abroad?

Nowadays our localisation is 60%. In other words, 60% of spare parts are made in Russia, 40% are western. We buy spare parts in America, Japan, Europe.

As for western spare parts. Don't you have supply problems because of the sanctions?

In general, no. We communicate with 24 countries. And the topic of sanctions is rarely raised in the business environment. This topic appears sometimes while having a cup of coffee, during an informal talk, when all technical moments were discussed. I can't say somebody refused to work with us or expressed their dislike. Money and people have been imposed sanctions. But we won a lot because of counter-sanctions when the road of western agricultural products to the Russian market was closed. On the one hand, the world price of our units reduced by 30% because of the devaluation. On the other hand, our consumers make agricultural products, grains, became more expensive in rubles because their products are sold at world prices. The agricultural segment sighed when money came there.