Philips in Russia - Background information

History

Philips first entered the Russian market in 1898, a few years after Philips was founded in Eindhoven in The Netherlands in 1891.

In 1898, Anton Philips made his first foreign sales trip, travelling by train to Russia from the Netherlands. He brought with him a sample case of incandescent light bulbs, wishing to convince the Russian Tsar to light the Winter Palace with Philips lamps.

This journey to Russia was a breakthrough for Philips’ export activities at the time. Although Anton Philips had already sold tens of thousands of bulbs along the Trans-Siberian railway during his 27-day travel to Russia, it was the order placed by the Russian Tsar himself that signaled a true leap forward for Philips. This single order of 50,000 bulbs represented 50% of Philips’ total sales for the year and marked the beginning of Philips’ business in Russia.

Philips first established itself in Russia with an office in Saint Petersburg in 1914. When the political climate made it possible, Philips returned to Russia in 1983 with the opening of its Moscow offices.

Philips in Russia Today

Today, 430 employees work for Philips in Russia. With 23 offices across the country, in addition to the fast-growing Moscow region, Philips also focuses on the regions such as Tymen, Novosibirsk, Saint-Petersburg, Krasnodar and Tatarstan which are growing at an equally rapid rate.

Healthcare
The Russian government plans to renew a large part of the healthcare equipment currently in use by its 26,000 publicly funded clinics. Russian healthcare expenditures, announced as percentage of GDP, are expected to grow considerably. This presents a significant opportunity for Philips as a leading healthcare company.

In Russia, Philips offers solutions in the diagnostic imaging segment including computer tomography, magnet resonance imaging, X-rays, cardiovascular system, nuclear medicine, PET-CT and ultrasound imaging systems and is also a significant player in patient monitoring. Philips is the leading provider of cardiac monitoring, Magnetic Resonance and Ultrasound systems in Russia. We are also active in customer services (consultancy, education, maintenance & repair of equipment) and information technology (healthcare informatics, document services).

Lifestyle
Private consumption is growing rapidly both in Moscow and in other regions of Russia. The newly formed Consumer Lifestyle sector offers a range of Philips lifestyle products, such as Shaving & Beauty, Health & Wellness, Domestic Appliances and Entertainment products. Philips has leading positions in Russia in electric shavers, Flat TV, audio and personal infotainment.

Lighting
Lighting requirements for shopping and retail areas have increased dramatically, as has the demand for lighting solutions for office and home spaces. The rapid expansion of infrastructure has also led to the growth of Russia’s lighting market. A significant rise in electricity prices is expected by 2010 (from €0,05 per kWh to €0,15 per kWh), making Philips’ solutions for energy-efficient lighting of particular relevance to the Russian market.

Philips Lighting activities in Russia include lamps, luminaries, lighting electronics, special lighting and automotive lighting. Philips Lighting offers innovative and energy saving solutions for applications such as homes, streets, building, offices, shops and sports environments.

Philips in Russia: technological cooperation

Philips co-chairs the Russian - Dutch Technology Working group as a follow-up of the joint business council, initiated during Presidents Putin’s state visit to the Netherlands in November 2005. The Working group is looking to develop cooperation between technology companies based in Russia and The Netherlands which aims to leverage the Russian knowledge-based economy. Its main objectives are as follows:

• Promote an investment-friendly environment by creating business awareness for the value of Intellectual Property
• Introduce a structure to combine finance, research and development initiatives (venturing, incubation, funding) within a technological campus. This is based on the principle of open innovation whereby Russian and Dutch companies can participate within a framework of agreed rules and tap into shared experiences.

Philips in Russia: Sustainability Initiatives

Philips’ sustainability focus in Russia is in the areas of healthcare and energy saving.

Philips contributes to National Projects on healthcare, amongst others, with its technological competencies and expertise in healthcare solutions. For example, Philips supports the Presidential Program to increase the birth rate with a local program called “More Babies and More Healthy Babies” with diagnostics for pregnant women and care for children with cerebral and autistic illnesses and cancer. In cooperation with the Russian Academy of Science, Philips has also instituted training programs for doctors and clinical specialists, to raise the level of diagnostics in Russia in such fields as laser diagnostics. Philips served the Medical Research Institute of Child Surgery and Traumatology in Moscow (Dr. Roshal’s Clinic) with the installation in 2007 of an MRT Achieva 3.0T Ambient Experience scanner.

Philips is a key industry player in promoting energy-saving through energy efficient lighting. This is particularly important for Russia, given its growth rates and consequential energy supply challenge. The implementation of energy-saving lighting solutions can cut energy consumption by up to 50%. Philips has completed several lighting & energy saving projects in Russia for industrial production facilities as well as city beautification projects such as the Great Bell Tower of the Moscow Kremlin, the Russian Senate and the Sinod (currently the Russian Presidential Library) in St. Petersburg.