Vitebsk goods can now be purchased in Albania, Morocco, Ethiopia, and other distant countries

Last year, goods from Vitebsk manufacturers were exported to Albania, Morocco, Portugal, Saudi Arabia, Ethiopia, and other countries for the first time. The volume of exports of goods from Vitebsk region producers is increasing every year. The largest share in foreign trade turnover is traditionally occupied by the market of neighboring Russia. However, it is worth noting that last year supplies from our region to African countries, as well as Central and North America, significantly increased. Trade turnover with our reliable trading partner, China, is actively growing. In general, exports have increased. Who benefits from selling what on the foreign market? And do the shelves of domestic retail outlets suffer as a result? What issues do executive authorities and enterprises have to resolve when organizing foreign trade activities?

This is discussed in a conversation with Alexander Tikhonov, Deputy Head of the Investment Policy and Foreign Economic Relations Department of the Vitebsk Regional Executive Committee's Economics Committee.

– Alexander Fedorovich, how many foreign trade partners does the Vitebsk region have? Which ones appeared last year?

– The total volume of foreign trade of the region for 11 months of 2013 amounted to about 6 billion dollars. Our enterprises have established export-import relations with 112 countries, and Vitebsk goods were supplied to the markets of 78 states. Both commercial and state economic entities demonstrate good export dynamics, which we observe annually. There are more importing countries in terms of quantity, but the main mass of imports consists of intermediate goods, i.e., those used in the production process and not being final consumer products. The share of consumer products was only 6-7%. The main trading partners of Vitebsk region are Russia, China, Germany, Ukraine, Latvia, Poland, Lithuania, Italy, and the Netherlands. Sales growth is noted in African countries, as well as Central and North America.

Manufacturers themselves are also engaged in developing new markets. The ability to advertise oneself abroad and use modern international communication tools plays a significant role here. It is important to participate in foreign specialized events and conduct direct negotiations. This involves certain costs, but it yields results if an enterprise strives to adopt new technologies, find business partners, and cares about its own image. Moreover, product promotion should be a continuous process; one might say, it's about imposing oneself on the foreign consumer, considering that competition there is tougher and requirements are higher. It is necessary to organize promotional campaigns, explain the advantages of goods over analogues, guaranteeing quality and timeliness of delivery, and where necessary – service and maintenance. Many manufacturers in the Vitebsk region pursue such a policy, but unfortunately, not all of them do.

– What problems are encountered in this regard?

– To be competitive, it is necessary to promptly master the production of new types of products and strive for their innovativeness. Personnel issues in foreign economic and marketing services should be resolved in a timely manner. Sometimes enterprises ignore simple but important components of product promotion: the existence and content of their own websites, their translation into foreign languages, and the quality of commercial proposals. Many need to continue working on this.

– What groups of goods are most in demand in the foreign market? What is profitable to export?

– The demand for products of the chemical industry and the meat and dairy sector is constantly growing. For example, at Vitebsk Meat Packing Plant OJSC, exports of sausage products significantly increased in January-November 2013, with Kazakhstan becoming a new sales market. However, the woodworking industry and light industry are not yet yielding the expected results; the ongoing modernization will radically change the situation.

It is profitable for our enterprises to export any type of product that generates stable profit. It is important not just to talk about increasing the volume of supplies, but to carefully monitor the external market situation, to sell goods with a high added value, i.e., not raw materials, but finished products. This is impossible without the use of new technologies and innovations in product manufacturing. The solvency and reputation of the importer should be taken into account, as the fact of an export delivery does not mean final settlement with the supplier; debt for supplied products may arise, resulting in problems instead of expected profit.

Enterprises of the region export more than 400 types of goods. Among them are cable products, veterinary drugs, peat, machine tools, polyethylene, fiberglass, linen fabrics, footwear, chemical fibers, dairy and fruit and vegetable preserves, cheeses, lumber, bricks, carpets, hosiery, dolomite, and much more. Currently, trial shipments of night vision devices from NPF "Dipol" LLC are being made to Hong Kong, Slovenia, and Croatia; optical devices from ODO "GalsOptics" to Thailand; and spare parts for agricultural machinery from OJSC "Vitebsk Tractor Spare Parts Plant" to Egypt.

– Alexander Fyodorovich, what share of exports do private business entities account for?

– The leading role still belongs to enterprises of communal property. However, the product structure of some of our companies has not changed for years. Some managers do not understand that this is a dead end. Flexibility in approaching foreign markets and attracting direct foreign investment for the production of innovative products are necessary. Private structures are more active in this regard. The most stable system for selling products abroad has been created by commercial enterprises "Aliansplast", "Energokomplekt", "Beltrubplast", "BelBimbo", "Gratsiya", "Marko", "Forteks", "Soyuz-kabel", Postavsky Furniture Center. Many of them are part of Russian or international holdings, which gives them more opportunities to expand sales markets. The search for options to organize their own production abroad is being conducted by "Energokomlekt", "Svyatovit", "Vitsroytehmash", "Dipol".

– Does the desire to earn more foreign currency infringe upon the interests of our consumers?

– The interests of consumers and producers do not always coincide: the former want to buy cheaper, the latter – to sell more expensive (and it doesn't matter where), thereby increasing revenue, the wages of their employees. It is clear that enterprises must earn money, they need foreign currency. But an increase in export volumes is a consequence of an increase in the production of competitive products, which is enabled by the ongoing modernization. The state performs a regulatory function so that there is enough“for everyone”, so that the stores have the necessary quantity of products from different manufacturers: if there is none of one, there is another. I think if the products are in high demand both for export and on the shelves, it is only a plus for the enterprise. Unfortunately, this cannot be said about all goods. Often, we have to solve the problem of unloading warehouses, including by intensifying work in the export direction.

– Let's talk about the imports of the Vitebsk region. What is the situation here?

– In addition to raw materials and equipment for the production and implementation of investment projects by joint ventures with foreign capital participation, mineral fertilizers, fruits, sugar, polymers, rubber, cotton, fabrics, clothing, machinery and equipment, metals, pharmaceutical products, etc. are imported. Much comes from Russia, over 450 commodity items are imported from China. It is more profitable to buy some things abroad than to establish their production here. But we do not always take into account our own potential. In general, the region worked well on import substitution last year, several dozen projects were implemented, including by commercial organizations.

– How much foreign currency was saved as a result?

– Production was carried out for 118 product items, and due to the supply of these products to the domestic market, the estimated savings of foreign currency amounted to about 100 million dollars. Among the projects implemented in 2013, one can note the production of emulsifier and lubricating-cooling fluid, wood treatment agents, acrylic construction paints and primers, cement-porous sheets, heat-insulating boards made of fiber-aerated concrete from local raw materials, vegetable and fruit juices in "Pure Pak" packaging, canned green peas and beans, truck-mounted aerial platforms, PVC door and window units, and lubricant additives. Annually, a program of action for import substitution is developed by the regional executive committee, the ultimate goal of which is to ensure a positive balance of foreign trade, and therefore stability in the region's export policy.

– What tasks for foreign trade activities have been defined for 2014?

– Growth of exports of goods and services, ensuring a positive balance of foreign trade, striving to increase the added value of products, further expansion of sales markets, optimization of imports and the import component in manufactured products. Maximum utilization of local raw materials. In particular, supplies of goods by subordinate enterprises abroad should be ensured at the level of 115-116% compared to 2013. It is necessary to increase the volume of innovative products and develop the distribution network. Enterprise managers are tasked with creating their own production facilities abroad and fully utilizing existing capacities.

– Will integration economic processes affect the export volume of Vitebsk manufacturers?

– Further intensification of competition is predicted in the market of the Customs Union countries, which account for over 70 percent of all our supplies. Those enterprises that develop cooperative production ties with Russian and Kazakh partners, monitor market conditions, and focus on increasing the competitiveness of their products will win. It is necessary to address the issues of obtaining the required certificates for foreign markets. It is long overdue to enter alternative markets, for example, in Asia, Africa, and the Middle East. The region undoubtedly has considerable export potential. The products manufactured by our enterprises are in demand abroad, competitive, so the set tasks are achievable.

Olga Maslovskaya, "Vitebskiye Vesti"