1. by Konstantin Dranch
kvdranch@gmail.com
Language Industry
in Russia

2. Source: Common Sense Advisory Russian LSPs annual increase in revenue
2009 – 38.5%
2010 - 58%
presented @TFR2011
> Trumps >
Global market growth rate of 7.4%
GDP 2011
Source: CIA World Factbook
4.3%
1.1%
Gree.. owth is Good 2.7%
1.8%
0.8%

3. But higher tier contracts
are under pressure.
2010 2011
RU Inflation RU inflation
(services) 8.1% (services) 8.7%
Rates climbed in 2011
Source:
mozgorilla.com

4. Metal Cars 5-10%
export over 7 years;
duty 10% Trucks 10-20%
cut over 3 years
Oil & Gas =
no change Cultivators
5-10%
Pork –
Planes –
15%
7,5% -
within the
12,5% over
quota;
7 years
Dairy –
5%;
Wine –
7,5%
Mobile
Cigarettes phones
30% 5%
Pharma
– 5-7,5%
WTO deal highlights Source:
Kommersant.ru

5. Maturity through info
exchange

6. 1. Gov. spending up in public tenders
Opportunities
2. Entry to WTO to boost imports over 3+
years
3. Rates go up, taxes still comparatively low
4. Market matures (in its teens atm)
5. More Ru LSPs looking for anchors in the
EU
6. MT raises its ugly head
Challenges
7. Enterprises recover after Putin’s reelection
8. Business costs to grow (legality pressure)
The Wind is Favorable
mostly

7. RU market size:
 LISA: 2008 = $250-300 mln, growing 15%
 CSA: 2009 = 540 mln, 2011 Eastern Europe =
$900 mln (2.84% of $31.4 bn global market)
 Local LSP estimates for 2011: conservative
$200, optimistic $400 mln
Russia has a lot catching
up to do

8. The competition
{ Who makes money in translation.
And how?

9. CSA list 2011 report, 2010 data: Military, aviation
 ABBYY LS - $9.3 mln ($9.8 mln)
Not listed by CSA (2011 data)
powerful software mother company, strong gov. presence  Translink - $8 mln
 Logrus Group – $9.2 mln ($10.5 mln) gov., military
localization pioneer, famous for MS Windows project, currently  Transtech – 10+ mln (estimate)
has substantial US operations military, technical, EGO spin-off
 Janus Worldwide – $8.19 mln  Megatext - $3 mln
Enterprise-scale localization, started with SAP Neotech-affiliate retail chain
localization, currently Sochi-2014 Winter Olympics official
provider  Traktat - $3.5 mln
 EGO Translating – $7.82 mln ($10 mln) Strong retail chain complements b2b
Established before competition, strong domestic market (St.  TLS - $3-5 mln (estimate)
Pete), early sales team
 ROID - $3.5-4. mln (estimate)
 Neotech – $5.55 mln
Early enterprise-scale technical translations (including
 AKM Translations - $2.7 mln
oil&gas, automotive)  Exprimo – $2.1 mln
 Palex – $2.39 mln ($2,85 mln)  Rperevod - $2 mln
Large-scale projects for Samsung and Xerox
 Mark business translations
 AG.Translate – $2.43 mln and others..
National Market Leaders

10. Life outside St. Petersburg and Moscow?
Alpha
Centauri
Mars
{
St.Pete
Moscow
Regional leaders
The Millionniki, 10 more hubs above 1 million inhabitants, house well-established LSPs with
strong local ties and average revenues around $1-1.5 mln, staffing 20-40 employees.
Examples: All Correct (39), Prima Vista (27), Avanta Translating (23), Aum (32)

11. ABBYY $9,32 mln / 83 emp = $122 k
Logrus $9,2 mln / 150 emp = $61k
Janus $8,19 mln / 136 = $60k
EGO $7,82 mln / 178 = $43k
Neotech 5,55 / 112 = $50k ($57 w/ Megatext)
Translink $8 / 123 = $65k
Palex $2,85 / 63 = $45k
AKM Translations $2,7 / 35 = $77k
Revenues per employee

12. Mark BT
Star Spb Nothing
Neotech new?
Fonetix Bust! goes
Logrus the economy
EGO Janus 2006 2008 2008 2010 2012
Palex MTA RTC
1988 1990 1992 1994 1996
ROID
Translink AG Translate
Wild East TLS
Years Trans-tech
1998 2000 2002 2004
AKM
Traktat
ABBYY LS
Timeline
Source: translationrating.ru

13.  Sum total of identified market leader revenues
in the list above – under $100 mln
 CSA & LISA estimates at $540 and $300 mln
Huh? Where is the
money?

14.  Global MLV presence unaccounted:
Lionbridge, SDL, Masterword, Star
Group, WeLocalize, Translation.com, Merril
Brink.
 Specialized and subcontractor agencies not
part of active community. Examples:
Multilize, Techinput, etc.
 More players: web search returns 1000+ LSP
websites, and don’t discount the freelancers.
 Large in-house translation departments in
major companies (salaries are
low, outsourcers expensive).
Invisible competition

15. 1. Primary exports: Oil & Gas, Metals
2. Infrastructure: Energy, Chemical
Industry, Industrial Equipment, Road & Rail
3. Medical & Life Science
4. Government & Public Sector maybe
5. Localization
6. Also in the news: On-site interpreting
Attractive Sectors
based on LSP CEOs’
opinions

16. Oil & Gas – highlights
Photo: Sakhalin energy

17. Medical - highlights
Photo: nnm.ru

18. Infrastructure - highlights
Photo: samaralife.com

19. Since 2009 all translations for state bodies must be
sourced via tenders.
They overdo it:
If all contractors are allowed to participate prices
deteriorate to 0.025 cents/word.
Often at the expense of quality.
The better priced tenders are NOT transparent!
The Trouble with Tenders

20. Russian is spoken in:
Azerbaijan, Belarus, Estonia, Kazakhstan, Kyr
gyzstan, Latvia, Lithuania, Moldova, Russia, U
kraine, and Uzbekistan.
expansion:
Russia is an entry point to
more markets

21. “Russia is one of the top-10 markets for us...
closer to the 2nd part of top-10”.
Istvan Lengyel, Kilgray
Barriers Local legal entity required;
{ Administrative and financial accounting
have never met each other;
To sell well locally you need to enter the
markets less transparent.

22. Realistic prices:
 Minimal 350 RUR per page
0.046c per word
 Average 650 RUR per page 0.085c per word
0.118c per word
 High quality 900 RUR per page
LSP Rates

23. Where to start?

24. Telesales & CRM data
Rating Agency Expert - Top 400 earners For the links, please
http://www.raexpert.ru/ratings/expert400/2011/table1/ download my
Forbes 200 non-publicly traded presentation
http://www.forbes.ru/rating/ekonomika-package/kompanii/73640-krupneishie-nepublichnye- kvdranch@gmail.com
kompanii#pages-1

25. Staff translator average salaries by region
• Moscow GMT+4 1100 eur
Source: rabota.yandex.ru
• St. Petersburg GMT+4 700 eur
• Ufa GMT+6 580 eur
• Nizhniy Novgorod GMT+4 550 eur
• Voronezh GMT+4 420 eur
• Kiev GMT+3 380 eur
• Minsk GMT+3 372 eur
Vendor management 101

26. M&A market not developed.
 2008. Renova holding bought PROMT
 2007-2011. ABBYY + perevedem.ru
 2010. Traktat + AGI Triple
Acquiring a local LSP?

27. Social networking on:
facebook.com, livejournal.com, vk.com
Forums: trworkshop.net, facebook.com/msk.tfr
Industry news portal: mozgorilla.com
The community

28. translationrating.ru
Solid data on Russian language agencies, plus a ranking based on LSP votes.

29. For first-hand experience visit
Translation Forum
Russia 2012
Kazan, 28-30 September. Tconference.ru +421(917)785569
kvdranch@gmail.com
@constanch

30.  Common Sense Advisory: Language Services Market
2011
 LISA: Globalization Services in Russia 2008 report
 Libor Safar & Katerina Gasova: Cracking the Russian
Market 2009 (Multilingual)
 Nataly Kelly: Translation business rises in Eastern
Europe 2009 (Multilingual)
Interviews:
ABBYY LS, AKM Translations, All Correct LS, Dialect
City, EGO Translating, Janus, Kilgray, Logrus
Group, Neotech, Russian Translation Company, TLS
Service, Traktat, Translink, XTRF
Sources & Further reading