A business story with twists and turns

Issue Number: 
81
Author: 
By VYACHESLAV KUZMIN / The Russia Journal
Published: 
2000-09-30


It’s been a smooth ride to the top for Vladimir Gnezdilov since the defense industry worker swapped rockets for roller-coasters and took a leap into the amusement park sector 10 years ago.

Gnezdilov, 46, said he felt inspired to take the plunge after seeing crowds lining up for the attractions at Moscow’s Sokolniki Park. He threw in his job, rented a lot at a military plant in Moscow’s Mitino district and went on to create a business with a worldwide reputation for producing quality roller-coasters, Ferris wheels and merry-go-rounds.

Today, the firm Gnezdilov founded, Mir, is Russia’s largest sideshow producer, and officials boast that at least 50 percent of attractions functioning in Russian parks have been made at Mitino.

"We at Mir aim to demonstrate that Russians can make safe and exciting attractions in accordance with international requirements and the needs of consumers," Gnezdilov said.

Mir has taken the lead in an industry that has dwindled drastically since the fall of communism. The Soviet Union had 62 attraction makers, but only three of them, including Mir, are up and running.

Mir is shooting higher and bigger than ever with its new projects, industry experts said. The firm is constructing a 75-meter diameter Ferris wheel in Seoul, South Korea, while setting up an aqua park in Moscow and developing a Ferris wheel with restaurant cabins instead of the usual ride-only cars.

• View from above

Among Mir's high-level post-Soviet achievements is Russia's largest Ferris wheel, towering 73 meters above the All-Russia Exhibition Center (VVTs) in Moscow. Another of Mir's successes is the 90-meter ride at Mirabilandiya park in Rowena, Italy. The wheel was the largest in Europe until British designer John Huxley completed his 134-meter diameter attraction in London at the end of 1999. Mir’s attractions also feature at parks in France, Saudi Arabia and Vietnam.

Gnezdilov said Mir is the largest Russian attraction maker, with a payroll of 550. It is followed by the Eisk and Kulttehnika facilities in Russia’s southern Krasnodar Oblast. Officials said that, outside of Russia, the company’s products are marketed under the Pax name.

The plant showed steady growth last year, with a 50 percent increase in sales every three months, Gnezdilov said. He said the growth became possible due to rising interest from buyers within Russia.

"Most benefits are received from selling attractions abroad," said Gnezdilov. The strength of that factor was shown in January 1998, experts say, when Mir completed its King Cobra roller-coaster at the Gulf of Damman amusement park in Saudi Arabia, a ride that can carry 900 people every hour and is the largest sideshow attraction in the Middle East.

Cobra is the king of roller-coasters at a height of 34 meters. The train contains 12 coaches, which plunge downward twice, reaching a maximum speed of 80 km per hour. During each plunge, the trains make two loops.

Gnezdilov said Mir won the tender because it was able to offer a good price. "We offered Cobra for $1 million, whereas the same attraction from Western producers costs double that." He said Mir had to be satisfied with a quarter of the profits that other producers would ask for, in order to lower the price.

"The Russian Cobra is thriving in Saudi Arabia," said John Graff, the president of the International Association of Attractions and Amusement Parks (IAAPA), who visited the Second All-Russia Exhibition in Moscow recently. The Virginia-based organization aims to assist development of the amusement-park and attraction industry.

Graff said he is pleased with the development of Mir, which has been an IAAPA member since 1992. He added that he likes to see "great enthusiasm from a new Russian attraction producer."

• Soaring in Seoul

Graff said Gnezdilov worked hard to enter the international amusement parks market. "Mir was the first Russian attraction producer to gain international certification of its output," he said, adding that the firm’s attractions are "up to world standards."

A measure of how far the firm has come was shown when it beat top Western manufacturers, including Italy’s Preston and Japan’s Meisho and Senyo, to build sideshows at Seoul’s largest supermarket – a success that was backed up early this year when Mir won South Korean firm Lotta’s tender for a 75-meter Ferris wheel.

"I am pleased with the victory," said Gnezdilov, adding that, in this instance, he believes the Korean businessmen chose the Russian company due to its "technical supremacy" over other participants.

Gnezdilov, who holds the official rank of Honored Designer of Russia, said the project progressed quickly and efficiently, although he refused to reveal the cost of the deal.

Mir roller-coasters vary in price from $50,000 to $1,000,000 depending on their specifications. "Mir sells several dozen roller-coasters yearly," said Gnezdilov. He said similar Western sideshow rides cost nearly two or three times as much because materials are more expensive.

The attraction itself, including illumination and painting, accounts for at least 40 percent of the sale price, he said, adding that Mir offers simpler designs for domestic parks owing to the financial difficulties they suffer.

• Battling obstacles

He said that Mir uses Russian steel for its attractions. The engines that power the rides are also Russian, but Mir favors the use of Western electronics.

Despite his success, Gnezdilov said he has faced strong obstacles. "In 1995, several criminal gangs tried to control the plant’s territory," he said, adding that he was told to leave the plant.

The gang’s threat coincided with revision of the firm’s taxes, and Gnezdilov said he still doesn't know if the gangsters or officials hurt him more.

"When the gangs realized I would never give up my business, they left, but my tax debacle lasted from 1996 to 1999," he said.

According to Gnezdilov, tax inspectors said Mir owed $12 million to the budget. He claims that tax officers seized all the firm’s documents without copying them and didn't return them until the end of last year, when Moscow’s arbitration court took Mir's side.

"It was a general inspection, and we have nothing special against Gnezdilov," said Galina Ponomareva, the chief of northeast Moscow’s tax office. She said Mir had violated the tax payment law, and tax police had to seize its papers. She said both the debt and a fine imposed on that debt were canceled following the Moscow court’s decision.

Gnezdilov remains bitter about his affair with the tax police, claiming they lost many company documents and have not replaced them.

But the director said Mir is always planning for the future. The firm is looking forward to building its aqua-park for Moscow, but is waiting for a plot of land that the city government has promised to lease it. Similarly, Mir is seeking to promote another one of its latest schemes, a Ferris wheel with small dining rooms instead of normal cabins. Plans have been drawn up, and the firm is looking for a buyer.

"Viewing sights is a pleasure, but viewing and eating is something new in the attraction business," said Gnezdilov, adding that the idea could put new zip into the amusement industry.

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