Export should promote development, not survival
The IST-WOOD-TRADE company exports most of its products – and these are hardwood lumber (oak, ash) – to several countries, including such leading furniture companies as Germany and Poland. From a conversation with the director of the company, Yuri Pashaginim, it was easy to understand that the export business of the company is very difficult. However, not only to her, but it was Yuri Pashagin who spoke with all frankness about this. In his stories and pain, and some disappointment, and even hopelessness. And at the same time, he has entrepreneurial perseverance, loyalty to his chosen business (“Woodworking is the work of my life, I can’t do anything else and I’m unlikely to retrain”). That is why the director, despite the permanent difficulties that he spoke about, is still trying to move the company forward, launch it into a new orbit, establishing, in addition to the existing parquet production, furniture production.
– Our company exports oak and ash lumber to several countries, including those leading in furniture, such as Germany and Poland.
Poland is convenient for any Ukrainian exporter – geographically close, close and Slavic mentality. And for companies such as ours, it is especially attractive because it is the third furniture producer in the world (and maybe another, because Germany sells a lot of furniture, imported from Poland, as its own). In addition, there are many other industries dealing with wood, so its Poles need a lot. But doing business with Poles neighbors is nevertheless difficult and risky, because they have already felt like conceited Europeans and often treat their Ukrainian partners scornfully and even down. We have repeatedly seen the same thing. They can easily violate the terms of calculations, unreasonably delaying them for a long time, referring to funny excuses. There are times when you give away your products for nothing, because you will find reasons not to pay at all. If even one out of ten Polish customers turns out to be dishonest – all your three-year profit is down the drain! We came to the conclusion that it is impossible to develop a company such as ours thanks to trade with the Poles, except to survive somehow. The prices that they can offer can not be called mutually beneficial. And if you take into account the realities of our wild market, where prices over ten years can grow at times. “If we had such“ tricks, ”one Italian entrepreneur once told me,“ then there would not be a single producer in Italy. ” And we, Ukrainian entrepreneurs, like cockroaches, survive in any adverse and harmful conditions.
Since our country is often compared with Zimbabwe, that is, the corresponding culture of doing business, the corresponding level of its civilization. Therefore, I and thousands of Ukrainian producers cannot reliably insure my products against financial risks. Including those already named. If you are not brazenly paid, you can win more than one court, both Ukrainian and foreign, and end up with a “wolf ticket” that will close export markets before you.
Recently, export to Poland has become even more complicated: Polish permits for trucking Ukrainian commercial goods across the border have ended. As a result, our cramped wagon has been standing in the border zone for more than two weeks, being stuck in a long ten-kilometer line.
This is our business: we buy domestic timber more expensive than it costs in Germany and Austria, we process it, experiencing significant costs, without a lease or a favorable loan, and are forced to sell solid, high-quality dried wood to the Poles at low prices, without the possibility of delivering their lumber to them on time. And in the delivery of goods we incur losses: we expected that transportation would cost a thousand euros, which means one and a half through idle time at the border. The situation – work and “rejoice”!
– And the Germans, you also have clients – they are famous for order, punctuality …
– I’ll tell you about them. Take, for example, a medium-sized company, with, say, a three billionth annual turnover – these are often our customers. You, in order to establish business relations with them, send your proposals for a year and a half, recalling yourself. When you finally noticed, they’ll make an appointment in about seven months. We talked. They want to come to get acquainted with production and products on the spot. If they promise to come in October, God forbid, at least in March, wait. Such punctuality. Finally, everything is OK – ten lorry wagons are ready to buy every month, but they really take four cars, praise the quality (super!) – and no longer buy. We are looking for another client who, we already know, will act in exactly the same way. I will say this: there are better conditions for life, for doing business, but I have not met businessmen with whom it would be nice to do business, to be in partnership.

So we work with Germany. Today they need your products – they give a good price, they value quality highly, but tomorrow it is no longer necessary. This unpredictability is impressive. Often there are objective reasons for this: in one of the segments of their woodworking for ten years, out of 160 enterprises, three remained, the rest went bankrupt. There it is a normal process. Companies with billions in turnover just as quickly and easily go bankrupt as we have small ones.
– Nevertheless, you continue to search for customers in Germany and send lumber there.
– Yes. But could they send not ten to fifteen trucks a year, but thirty monthly.
… Yuri remarks at the end of the conversation: what he said is his truth, his realities, in others – perhaps she is different, her own, perhaps more encouraging, different impressions of trade with the same Poles and Germans.
The section “Success Stories” was founded as part of a grant project with the support of the Swiss Cooperation Bureau in Ukraine, the name of the project: “Improving the level of cooperation and trust with joint participation in international and national public procurement” – TENDER TOGETHER.