Difficult but not impossible: successful cases of Ukrainian exports

05/ 04/ 2023

Global expansion and the opening of export markets can help Ukrainian companies stay afloat during the full-scale war. After all, companies, that stay and operate in Ukraine, are trying to develop globally, although it is not as simple and easy as it may seem. Therefore, we at the European Business Association held an event “Made in Ukraine: export practices and cases” to learn about successful cases of Ukrainian products conquering global markets. View the meeting For example, Ukrainian animal feed producer Kormotech started its export activities in 2012. The company has a 5-year export strategy with a clear categorisation of strategic and promising markets for work. Among the Kormotech practical recommendations is that before entering a new market, it is necessary to research it, clearly understand the range of products you want to offer, what is and is not popular there, and determine the key sales channel. For Kormotech, this channel is retail, and it is through retailers that they enter local markets. Their successful cases were with Maxima for entering the Baltic countries, as well as with Kaufland for Germany and other countries where this chain is present. To get on the shelves of large local supermarkets, you need to know when they are reviewing categories (usually 1-2 times a year), get into this tender and offer an attractive commercial offer. If your product is approved, it will take about a year to negotiate and adapt your products to the local requirements. Information about tenders is not disclosed, so you need to contact the buyers to have access to such insights. Therefore, it is important not just to come but to participate in industry exhibitions, such as PLMA in Amsterdam, where you can present your brand and establish professional contacts with buyers. Last year, the brand of vodka Nepoborna was established with a focus on exports. The plan was to enter 35 countries, but currently, only about 10% of production is exported. For Ihor Nazarov, the brands founder, it was unexpected that business decisions in Europe are made very slowly and sometimes bureaucratically. The situation is quite different in the United States, where they managed to enter in 3 months and are already actively launching a marketing campaign to promote Ukrainian vodka. According to Mr Nazarov, the Americans have another approach to money, business, brands, and decision-making speed in comparison to the Europeans. For the American market, the brand changed its name to make it easier to pronounce and be remembered. Therefore, it is important to have a clear and simple name for expansion. It takes time to enter new markets, so you need to keep in mind that the first year may not be profitable. You can speed up the process if you have contacts in the industry. At the same time, the market can be very different depending on the country, so you need to take into account its own characteristics for each country, and not use the same strategy for doing business in Ukraine and other markets. Besides, a reliable business base in Ukraine is also important for global expansion. Biosphere Corporation has extensive experience in other countries. The traditional direction of exports is to the East, to such countries as Kazakhstan, Georgia, and Azerbaijan. The company has also been working for many years to adapt its products to the needs of European consumers. The company calls this approach evolutionary. Last year, Biosphere tried to act revolutionary by acquiring the Austrian brand Alufix, a factory, and 4 sales offices in European countries. This is a slightly different type of entering global markets than the previous two cases, and it is likely to yield faster results. However, it is still necessary to prepare the groundwork. According to Yuriy Golianych, CEO of the Household and Recycling Division, Biosphere Corporation, this has significantly increased sales in Central Europe and simplified business processes, as barriers to entry to the EU have been removed. The next step for the company is entering Western Europe. The company supplies goods to the USA, but without the intention of gaining a foothold in this market. Biosphere cooperated with Ukrainian embassies on the ground as part of the Support Ukrainians project. At the same time, when it comes to export, companies should rely on their own resources by 90%. Every 2 days Beehive ships 200-litre barrels of Ukrainian honey to Europe, so the company is almost entirely export-oriented. European companies then use this honey as a raw material for their products. Honey is packaged in jars only for export to Asia or for retail sales in Ukraine. In the United States, there is very strong competition from Argentine honey exporters, so this direction is not a priority for Beehive. The company also plans to open a honey bottling line in one of the European countries. To develop the business, they mainly raise their own funds, and a quarter of them came from loans. The companys products are popular in global markets due to the quality of the product and the speed of work. The key advice from the company is to have a stock of working capital, as payment for exported goods takes 2-3 months on average. To summarize the cases, we can say that, yes, there is much talk about Ukraine in the world today, but when it comes to business, all the rules and procedures when entering a market are equal and the same for everyone – you have to play by the book, there is no way to avoid established business principles. Thus, entering global markets is not an easy or quick process, but once you do, Ukrainian products become extremely competitive in the market due to their quality. And to enter the markets, you need to use all possible channels and tools, namely business associations, embassies, platforms, networking events, exhibitions, and fairs to meet and find the right contacts. At the end of the meeting, the participants were also presented with the Eastern Partnership Helpdesk platform from the International Trade Center - ITC. According to Maryna Sydorenko, ITC National Manager in Ukraine, the platform will be useful for both existing exporters and companies that are just exploring this opportunity. Thus, the site offers analytical tools for researching potential markets, as well as information on current regulatory changes: https://eap.tradehelpdesk.org/uk We would like to thank the speakers of the event: Nazar Shchyrba - Kormotech, Igor Nazarov - Nepoborna, Yuriy Golianych - Biosphere, Roman Veleciuk - Beehive, and Marina Sydorenko - ITC for their useful insights during the event!

Therefore, we at the European Business Association held an event “Made in Ukraine: export practices and cases” to learn about successful cases of Ukrainian products conquering global markets.

View the meeting

For example, Ukrainian animal feed producer Kormotech started its export activities in 2012. The company has a 5-year export strategy with a clear categorisation of strategic and promising markets for work. Among the Kormotech practical recommendations is that before entering a new market, it is necessary to research it, clearly understand the range of products you want to offer, what is and is not popular there, and determine the key sales channel. For Kormotech, this channel is retail, and it is through retailers that they enter local markets. Their successful cases were with Maxima for entering the Baltic countries, as well as with Kaufland for Germany and other countries where this chain is present. To get on the shelves of large local supermarkets, you need to know when they are reviewing categories (usually 1-2 times a year), get into this tender and offer an attractive commercial offer. If your product is approved, it will take about a year to negotiate and adapt your products to the local requirements. Information about tenders is not disclosed, so you need to contact the buyers to have access to such insights. Therefore, it is important not just to come but to participate in industry exhibitions, such as PLMA in Amsterdam, where you can present your brand and establish professional contacts with buyers.

Last year, the brand of vodka Nepoborna was established with a focus on exports. The plan was to enter 35 countries, but currently, only about 10% of production is exported. For Ihor Nazarov, the brand’s founder, it was unexpected that business decisions in Europe are made very slowly and sometimes bureaucratically. The situation is quite different in the United States, where they managed to enter in 3 months and are already actively launching a marketing campaign to promote Ukrainian vodka. According to Mr Nazarov, the Americans have another approach to money, business, brands, and decision-making speed in comparison to the Europeans. For the American market, the brand changed its name to make it easier to pronounce and be remembered. Therefore, it is important to have a clear and simple name for expansion. It takes time to enter new markets, so you need to keep in mind that the first year may not be profitable. You can speed up the process if you have contacts in the industry. At the same time, the market can be very different depending on the country, so you need to take into account its own characteristics for each country, and not use the same strategy for doing business in Ukraine and other markets. Besides, a reliable business base in Ukraine is also important for global expansion.

Biosphere Corporation has extensive experience in other countries. The traditional direction of exports is to the East, to such countries as Kazakhstan, Georgia, and Azerbaijan. The company has also been working for many years to adapt its products to the needs of European consumers. The company calls this approach “evolutionary”. Last year, Biosphere tried to act “revolutionary” by acquiring the Austrian brand Alufix, a factory, and 4 sales offices in European countries. This is a slightly different type of entering global markets than the previous two cases, and it is likely to yield faster results. However, it is still necessary to prepare the groundwork. According to Yuriy Golianych, CEO of the Household and Recycling Division, Biosphere Corporation, this has significantly increased sales in Central Europe and simplified business processes, as barriers to entry to the EU have been removed. The next step for the company is entering Western Europe. The company supplies goods to the USA, but without the intention of gaining a foothold in this market. Biosphere cooperated with Ukrainian embassies on the ground as part of the Support Ukrainians project. At the same time, when it comes to export, companies should rely on their own resources by 90%.

Every 2 days Beehive ships 200-litre barrels of Ukrainian honey to Europe, so the company is almost entirely export-oriented. European companies then use this honey as a raw material for their products. Honey is packaged in jars only for export to Asia or for retail sales in Ukraine. In the United States, there is very strong competition from Argentine honey exporters, so this direction is not a priority for Beehive. The company also plans to open a honey bottling line in one of the European countries. To develop the business, they mainly raise their own funds, and a quarter of them came from loans. The company’s products are popular in global markets due to the quality of the product and the speed of work. The key advice from the company is to have a stock of working capital, as payment for exported goods takes 2-3 months on average.

To summarize the cases, we can say that, yes, there is much talk about Ukraine in the world today, but when it comes to business, all the rules and procedures when entering a market are equal and the same for everyone – you have to play by the book, there is no way to avoid established business principles. Thus, entering global markets is not an easy or quick process, but once you do, Ukrainian products become extremely competitive in the market due to their quality. And to enter the markets, you need to use all possible channels and tools, namely business associations, embassies, platforms, networking events, exhibitions, and fairs to meet and find the right contacts.

At the end of the meeting, the participants were also presented with the Eastern Partnership Helpdesk platform from the International Trade Center – ITC. According to Maryna Sydorenko, ITC National Manager in Ukraine, the platform will be useful for both existing exporters and companies that are just exploring this opportunity. Thus, the site offers analytical tools for researching potential markets, as well as information on current regulatory changes: https://eap.tradehelpdesk.org/uk

We would like to thank the speakers of the event: Nazar Shchyrba – Kormotech, Igor Nazarov – Nepoborna, Yuriy Golianych – Biosphere, Roman Veleciuk – Beehive, and Marina Sydorenko – ITC for their useful insights during the event!