IA "Vchasno": What areas of business of Donbass suffered the most because of the war in the region?
Elvira Sevostyanenko: Everything depends on which market the products of the labor of entrepreneurs were oriented to. And it is mainly the Russian market and the CIS markets. 80-90% of the goods were exported from the Donbass precisely there. Therefore, almost all suffered. Even those who did not export, but were in the chain subcontractors and served a large business, which also had problems.
- To what extent were our entrepreneurs ready for such tests and were able to cope with the difficulties?
- It was difficult. But a small business is very flexible, and it can quickly reorganize - close one direction, come up with and implement a new idea. This is the essence of small business - efficiency, flexibility, innovation. Those who "whipped butter from milk", survived.
In 2014, we were at the core of all events, watched and continue to observe all this pain - entrepreneurs all the time come to us with their problems, we actually began to perform the role of first aid. Even if we do not have the resources and experts to solve something, we should at least sit down and listen, and this will already be support. But we try to provide real help to entrepreneurs.
- With what did the entrepreneurs of the region come to you?
- "Production facilities were bombed - where should we go?", "Fields, where we sow, are mined- what should we do if we still have to pay taxes for this land?", "We abandoned everything and re-registered in the controlled territory, and we are charged with fines for not paying taxes in time", and many other questions were asked by entrepreneurs.
- How and with what small and medium-sized businesses can be helped in all these situations?
- On the one hand, it is difficult and hard, because we are - the Donetsk Chamber of Commerce and Industry - the same relocated company as the whole business of the region. On the other hand, we have no right to weakness and work for honor and conscience.
In 2014, entrepreneurs had a sense of confusion, and we heard from them: "It is impossible to enter new markets!", "To whom we are needed abroad and in Europe?" People needed to rebuild their lives fundamentally - starting with learning languages, finding their niche in the markets, studying the culture of doing business. It was a painful restructuring.
Now, from the passive state, our entrepreneurs are moving to a completely different status and attitude to life: "Everything in this life depends on me, and not on the country, uncle, big business, to which I make some kind of chain or element." And this transition in the psychological state is obvious.
- Tell us about those who managed to overcome serious difficulties in business and get on their feet after the shocks of 2014.
- I am very pleased to watch our entrepreneurs, whom we helped, and they are now becoming serious partners. For example, Sergey Korotun - he was a subcontractor for the Novokramatorsk machine-building plant and lost everything in 2014, as the customer reduced his production volumes by 70%, and small companies lost their income.
Sergey Korotun together with his colleagues began to look for a way out of the situation - they did not give us rest, asked for information, attended all our trainings and exhibitions. As a result, today they have a contract for their non-standard equipment, which they will take to Germany.
Here is another example - Dmitry Semenov, who came up with lamps from salt. He also very actively sought the market and customers, he learned everything new. When a request was made for a salt room from Israel, Dmitry came to us and asked us to help him make up a contract, since he knew nothing about a foreign economic activity. We helped arrange all the documents, and he is already preparing the first dispatch.
- What international companies are helping to revive entrepreneurship in Donbass today?
- I remember the summer of 2015 when we first met with Janthomas Hiemstra from UNDP. Then I explained to him, what a situation with entrepreneurs and how we want to help them, and he believed in us. And I think he did not regret, as we, together with UNDP, implemented many programs - we opened an export center and a mediation center on our base in Kramatorsk.
Also since 2011, we are partners and active participants of the project of the European Commission East Invest, which gives entrepreneurs a lot of opportunities - trainings, learning of experts of the Donetsk CCI, based on the products of some entrepreneurs we audit the export potential and build a model how to enter the European market and how to meet international requirements.
If for such information you contact the consulting agencies that are on the market today, it will cost 5-7 thousand euros, and entrepreneurs of Donbass have access to this information free of charge within the framework of grant projects.
We also have an interesting project with the German National Chamber. The contract was concluded with the Ukrainian CCI and four more regional ones, including the Donetsk Chamber of Commerce and Industry. The project is aimed at helping entrepreneurs enter their foreign markets. For example, in the framework of this project we are working with our Slavyansk ceramists - we want to bring them to the international market. Within the framework of the project, a visit to Germany is planned to ensure that our ceramists study the demand and understand how their products might be interesting to Europeans.
- Are our entrepreneurs ready to work with international partners?
- With the support of donors, we were given the opportunity to implement a number of business missions, so-called roadshow. We organized participation in exhibitions, visited enterprises, B2B negotiations - we visited 7 countries of the European Union! Why is it important to travel to entrepreneurs? It is experience, it is contacts and the removal of psychological barriers, it is an opportunity to see how people realize something like this, where from they get new ideas and technologies.
We select active local businesses for such visits, which can subsequently develop and realize the received ideas. A very important part of such visits is negotiations. For them, the companies of the country we visit are selected. And we already have certain results and contracts for such negotiations. For example, following a visit to Denmark in 2016, we signed a contract of the Ukrainian company for the supply of sun protection systems.
For me, a visit to Cyprus was indicative, when we drove there farmers from Donbas. They were at a loss when they saw an interest to them, to their products. There was a queue for our farmers to negotiate, and it was a powerful push for them to rethink their plans and established models of work.
Questions immediately began to arise: "Listen, if there is such an interest, then we need to think about exports and how to work with it! We do not have enough power - they need 10 thousand tons of grain, but we do not have that much ... Maybe it makes sense to join cooperatives? ". There were many questions, they saw the demand for their products and thought about how they could enter new markets.
- In which countries markets are opened for the products of Donbass entrepreneurs?
- When I was invited to Albania, where I went as an international expert and consultant for the institutional development of associations, we used this chance to open new opportunities for our entrepreneurs. Previously, the market of this country was closed - there were no trade agreements with Ukraine. It was a revelation that Albania has money and a need for our goods. Therefore now we are actively working with this market and creating a package of commercial offers from the manufactures of Donbass.
But we also work with the Middle East, and with all the countries of the European Union.
- What other products from the Donbass, except for agricultural, are in demand abroad?
- Albania, Greece, Cyprus, Africa need our sunflower oil, flour, sugar, grain. A very promising topic that we will develop is the production of feed for farm animals. For example, to the same Albania it is expensive to buy food from the Baltic countries and now it is oriented to Ukraine.
In addition to agriculture, there is a demand for salt rooms and fixtures from Donbass. Pottery is in demand, but in a new form, rather than the same as before - it could be souvenir products, but not the dishes that our ceramists made earlier. Small agricultural machines and other complexes, equipment and parts are also in demand.
- At one time in Poland, they relied on small and medium-sized businesses, and it helped the country get out of the crisis. How long does it take for Ukraine to get our entrepreneurs on their feet?
- It would be great if we took an example from Poland. There, such an effect was achieved thanks to the huge support of the country. Unfortunately, today we do not even have a strategy for small business development. At the same time, there is an export strategy.
We urgently need to focus on state aid, we need to work out and combine the export development strategy with the strategy for the development of small and medium-sized businesses. The state should enter into alliances with associations, organizations, chambers of commerce and industry and make this cooperation systemic.
The key to success in Poland was the insane support of the country. We do not have it - there is no system support for small businesses, and that's the problem. Now the small business achieves results thanks to its own and volunteer efforts. But these resources are not enough.
The material was created and published in the framework of the project, which is carried out with the financial support of the Government of Canada through the Global Affairs Canada