{"id":2086,"date":"2019-04-04T15:00:03","date_gmt":"2019-04-04T12:00:03","guid":{"rendered":"https:\/\/uafm.com.ua\/?p=2086"},"modified":"2020-03-16T15:14:56","modified_gmt":"2020-03-16T12:14:56","slug":"istoriya-uspihu-chleniv-uam-eksport-4","status":"publish","type":"post","link":"https:\/\/uafm.com.ua\/en\/istoriya-uspihu-chleniv-uam-eksport-4\/","title":{"rendered":"From the village of Teresva – to the world. How \u0419\u043e\u0441\u0438\u0444 \u041f\u0430\u0432\u043b\u0438\u043a established the export of furniture for his family factory."},"content":{"rendered":"

From the village of Teresva – to the world. How \u0419\u043e\u0441\u0438\u0444 \u041f\u0430\u0432\u043b\u0438\u043a<\/a> established the export of furniture for his family factory.<\/p>\n

The example of Joseph Pavlik from the village of Teresva in Tyachiv district is a classic story of a man who made himself. This is a story about a family business, a small company from the Transcarpathian village of Teresva that produces furniture (tables and chairs) without external investments and loans and sells them not only at home, but also in 4 foreign countries.
\n\u201cWe work in the finishing product. This means that a consumer in Romania, Israel or Austria prefers the best products on the market. Therefore, we focus on product quality and getting feedback from the buyer in order to understand what we need to work about. it is important for us that the buyer loved our product \u201d- Iosif Pavlik has such an unusual approach for Transcarpathian manufacturers. After all, he himself is an atypical entrepreneur.<\/p>\n

Country to have a product
\nThe first “furniture” – elements for coffee tables and furniture – Joseph began to do on the machines in a small one-room workshop near the house. His father was involved in carpentry, so he had several machines at home. On them the son also studied. Over time, Joseph became interested in the production of tables and chairs. I started with one model that I sold in local markets and small shops.
\nNow he has an enterprise with 34 employees, which monthly produces about 4,000 units of products. Half of them are exported abroad. What is important, already under its own brand Pavlik.
\n– The country has a product. We have to create it and show the world that Ukraine is not only a source of raw materials, but a country that can provide a quality product with high added value, \u201dsays Joseph. – I always show our workers an example: two containers stand side by side: one of our finished products, the second with the forest. In our – products from 8 “cubes” of wood, which costs 25,000 euros. Next – 30 “cubes” of unprocessed forest, which costs 3,000 euros. That’s what value added is. it is important to create a product, because if it is, then there is a quality of life. Who should create this product? Only we. This question is for us. Nobody will force us to do this, it is our responsibility: business and government.
\nJoseph knows firsthand what the benefits of competent cooperation between government and business can bring. In the summer of this year, he was a member of a trade mission to Israel, which was organized and conducted by the Export Promotion Office at the Ministry of Economic Development. And in November, a construction company from Israel arrived in Kiev to meet with Ukrainian manufacturers to order furnishing about 3 thousand apartments for their clients. The Pavlyk brand will also be a participant in this large-scale project.<\/p>\n

3 years of preparation for export
\nThere are many examples in Ukraine when the crisis becomes the impetus for business development. But only when entrepreneurs think innovatively and strategically. The family business of Joseph was about to survive the crisis of 2008: in order to stay afloat, they had to quickly reorganize and expand the range by developing new models. And the next crisis in 2014 made the businessman think about where to go next. It was 4 years ago that he realized that he should try to work for export.<\/p>\n

– By 2014, we had good sales in Ukraine and we did not need to look for new markets. Honestly, it did not even occur to me to change anything. When all is well, the person does not feel that it is necessary to look for something new. But after 2014, we clearly understood that in Ukraine in the coming years (until everything falls into place) there will be a problem with the market. And then they decided to reorient on export, – Joseph tells.
\nIt is interesting that a lot of time passed from the idea to export in the first batch of chairs delivered abroad – 3 years. Only in 2018, the first container with chairs of the Pavlyk brand sailed to Israel. And then it went. Now chairs from Bedevlje are also sold in Romania, Moldova, \u201cat the exit\u201d is a contract for a Czech customer. Now the entrepreneur is also exploring the possibility of selling to the US market.
\nWhat happened during these 3 years? First, Joseph studied the markets. And secondly, he made a small revolution in his factory – he changed his approach to business and introduced lean manufacturing (LEAN).
\n– The first thing we realized is that you have to go to the exhibitions, – says the entrepreneur. \u201cFirst we traveled to Ukraine, then we visited an exhibition in German Cologne \u2014 as a guest, we didn\u2019t present our product. But there I learned a lot of interesting things. I introduced myself as a buyer, and they willingly told me in which countries which models of chairs are in demand. The first conclusions can already be done. For example, it immediately became clear that very promising Israel. This is a small country where a significant part of the population is Russian-speaking. Thanks to a steadily growing economy, Israelis have been renovating furniture for 5-6 years, so there is a steady demand for furniture. At the exhibition, we met and exchanged contacts with several potential clients. Keeping in touch, we were offered to try to make several models that were interesting for them. Made samples in the shortest possible time, we sent them for approval to Israel. Thanks to quickly fabricated samples, we received an order.
\nSo we got the first export order.
\nThe introduction of lean manufacturing has opened up the prospect of entering foreign markets. This concept of management, created in the Japanese enterprise Toyota, based on the desire to eliminate all types of losses. At the same time, every employee is involved in the business optimization process. For example, a small touch: in the factory of Joseph Pavlik, without exception, all employees sort garbage.
\n– Before the introduction of LEAN, we had a semi-handicraft production and, most importantly, a semi-handicraft approach to business. And through this – a lot of problems with customers. We did not have time, lost time and money. And in the end – customers and reputation. When we introduced a new approach, the situation changed dramatically. We got a good product of stable quality. It gave us strength. Already last year we started working with the national network of building hypermarkets, and this year the export went, \u201dconcludes Joseph.<\/p>\n

How to compete with China and Poland
\nJoseph\u2019s first impressions and conclusions about the European attitude towards our manufacturers are: Ukraine is an alternative to China. A foreign buyer sees us as a replacement for China, as a cheap product, which is geographically much closer to them. For Europeans, one of the most important arguments for the Ukrainian product is the price. But in general, a businessman identifies three important things for a foreign customer: price, product quality and level of product support (management, logistics, punctuality, responsibility, communication culture, etc.).
\n– If you enter global markets, you must understand that you are competing primarily with China, Turkey, Poland. In these countries, the cost of production is very low due to technology and production approach. To compete with them and enter the European markets is difficult. But probably. We are an example. Now our task is to gain a foothold in those markets where we will successfully rejoice, says the businessman.
\nIt is not easy for Ukrainian exporters (especially small businesses) to compete with European manufacturers also because the initial conditions for starting a business in Ukraine and in the EU are far from being equal.
\n– I have a friend in Poland who took a loan at 3% per annum. Where will you find such in Ukraine? Nowhere. And besides, we also import equipment from abroad and pay heavy duties. And they are not. As a result, we must invest in the development of working capital, take money out of pocket. And it is difficult. Unfortunately, there are no loans that would allow Ukrainian business to survive. And this is very important for manufacturers, – notes Joseph Pavlik.
\nAnother risk factor that is absent in Ukraine, and in Europe (or very minimal), is instability, which prevents business from strategically planning work.
\n– Now we are faced with several problems that do not depend on us. For example, the price of gas has risen – the cost of the product has increased, because we ship containers with products from Odessa by sea, and, accordingly, logistics costs have increased. Our partners immediately call and ask: how can you increase the price? They do not understand why the value stated in the contract for a month may change. And there are many factors like gasoline. These include energy, tax burden, rate fluctuations, and the situation on the labor market. But all of this is a nationwide problem, the whole country must solve these problems: power together with business, says Joseph Pavlik.
\nThe entrepreneur notes that stability is very important for production. And she is not there now. In such a situation, export is very interesting, because the manufacturer receives a deposit, buys the material, produces the product, and after it is delivered to the buyer receives the money. Stability can only provide a stable market.
\nThe first successes in the international markets inspire Joseph. He plans to scale the business – to increase production capacity. And to start the production of more complex products with high added value, in the price of which \u201csit\u201d more author ideas of Transcarpathian furniture makers. The acquisition of new equipment and the introduction of technologies to improve the efficiency of the factory should help achieve both these goals.<\/p>\n

5 Tips for Beginners
\nHow can a small manufacturer start exporting their product? What is needed for this? Where to begin? Joseph Pavlik has built a chain of steps that are necessary for success.
\n1. Understand how strong your product is. If this is the final product, then determine who the customer is the product.
\n2. Find out where the product is interesting.
\nChoose a market in which you want to work, because each has its own characteristics. Each market will require a different model.
\n3. Submit an application to the Export Promotion Office. To go as an official representative of Ukraine to trade missions and exhibitions to the country that interests you. See potential customers, explore the market and look for customers.
\n4. Searching for connections you need to travel a lot, attend various specialized events, communicate. It will be difficult for a beginner manufacturer, but this is one of the key tools of today. Networking is a must.
\n5. To unite in associations, cooperatives, clusters. We, for example, are members of the Ukrainian Association of Furniture Manufacturers. This is a very useful platform for communication and information sharing. Our regular meetings allow us to see trends, understand the problems of the industry, find ways to solve these problems, generate ideas that will help move the business.<\/p>\n

Author: Yaroslav Svitlyk<\/p>\n

The heading “Success Stories” was founded within the framework of a grant project with the support of the Swiss government called “Increasing the level of cooperation and trust between representatives of SMEs” – TENDER TOGETHER.<\/p>\n\n\t\t