8 November 2011, Kyiv: Second International Seminar: Trade and Project Finance took place with the participation of world’s second largest Export Credit Agency (ECA) of the Netherlands Atradius Dutch State Business NV, international bank Rabobank, as well as the experts of IBcontacts company. The event was supported at the international level by the Ministry of Economic Development and Trade of Ukraine and the Embassy of the Kingdom of the Netherlands in Ukraine.
Heads and owners of fifty Ukrainian and foreign trade and industrial companies that develop their business at the international level and attract foreign capital visited the Seminar. The event was held in an interactive mode with the experts from IBcontacts being masters of ceremony.
At the Second International Seminar Mr. Volodymyr Tkachuk, Deputy Director of Trade and Economic Cooperation Department of the Ministry of Economic Development and Trade of Ukraine, outlined the current economic situation in Ukraine as well as promising directions of country’s export.
Mr. Rogier van Tooren, Second Secretary of the Embassy of the Kingdom of the Netherlands in Ukraine, speaking about bilateral economic relations of Ukraine and the Netherlands, said that the Netherlands is among five largest investors of Ukraine. The general amount of investments is US $ 4.7 billions, with the largest share in industry and construction. The Netherlands is also one of 15 largest trade partners of Ukraine.
"Finance availability is now a key factor in a trade agreement. Foreign exporters of the same level, with products of nearly equal quality, are competing in more favorable finance conditions for their buyers, unlike before when they were competing in the quality of goods. And since a Ukrainian company is a party to the agreement and the one that pays all accompanying expenses when attracting foreign finance, it is essential for heads and finance directors of Ukrainian companies to understand the principles and details of different schemes of attracting foreign finance" – commented Ms. Kateryna Barabash, Managing Director of IBcontacts about the trends of international trade.
Mr. Stephan Naber, Underwriter/Regional Specialist (Eastern Europe) of Dutch ECA Atradius, described the structure as well as the procedure of export credit insurance, insurance products, kinds of risks covered by Atradius, requirements to Ukrainian companies, and the general policy of Dutch state ECA regarding Ukraine. Mr. Han Bartelds, Vice President of Rabobank, emphasized the advantages of export credit insurance, outlined its schemes, specific features of company assessment and financing, as well as shared his experience of cooperation with Ukrainian companies.
IBcontacts experts Ms. Anna Pobedymska, Head of Project Department, Mr. Oleg Dorofeev, Head of Legal Department, and Mr. Vilen Kharchenko, Head of Finance and Analytical Department, analyzed the barriers in international trade at the level of state, company and entrepreneurs, and defined the ways to mitigate trade risks.
These experts identified the obstacles for Ukrainian companies that hinder attracting foreign finance and the ways to overcome them, namely: financial and organizational barriers (e.g. absence of reporting in accordance with international standards, "group of companies" scheme), barriers of legislative and procedural character (custom and monetary regulation).
"We often face the situation when companies refuse to provide financial information at the request of ECAs due to lack of awareness about the negative effects of it on their relations with foreign partners. As a result, ECA is likely to make a negative decision in regard to export risks insurance of a Ukrainian borrower" – noted Ms. Anna Pobedymska.
"A Ukrainian company can also face obstacles that seem to be uncommon in Ukraine. For example, IBcontacts has had a project, the implementation of which depended upon its impact on the environment. Most of the Ukrainian companies consider this factor insignificant, unlike European companies do. Moreover, Atradius regards the absence of conclusion about the impact of a project on environment as a considerate ground to abandon ensuring risks" – added Mr. Kharchenko.
The practical part of the Seminar became a platform for Ukrainian companies to share their experiences in attracting foreign finance on security of export credit agencies to enhance production.
"Direct financing (i.e. without participation of a Ukrainian bank) of our company involving foreign ECA and financing banks is a bright example of the availability of this instrument to both large market players and importers that aren’t included into top-100 companies, – commented on the experience of "ZhL" confectionary factory its General Director Mr. Yevgen Gamov. – In spite of certain difficulties, an independent implementation of the project was our great success which enabled us to raise our international reputation. It should be noted that our projects are coordinated by the experts of IBcontacts. The reason is that this instrument is new for most of Ukrainian companies. Though when attracting international finance, it is important to be aware of the special features of ECAs as well as demands of foreign ECAs and financing banks to buyers. It is also necessary to use different approach while cooperating with each ECA or financing bank."
"Mriya" Agroholding has been attracting foreign finance with the participation of foreign export credit agencies since 2008. Attracting direct foreign finance has a number of advantages, i.e. long terms, cheap resources and no pledge. Besides, direct cooperation with foreign ECA and financing bank obliges a Ukrainian company to have a list of clear, specific, structured and predictable requirements from these market players" – according to Ms. Olga Rybachuk, Head of Foreign Finance Division of "Mria" Agroholding, who shared her experience with the participants of the Seminar.
In his turn, Mr. Rob Coppejans from Robinvest Reeuwijk B.V. shared the experience of Dutch exporters’ cooperation with Ukrainian buyers.
Thus, by virtue of the presence of all elements of export finance scheme (ECA, bank, company-advisor) the participants of the Seminar were able to form a complete image of the process of attracting cheap and long-term finance from abroad on security of ECAs, to receive answers to all interesting questions, as well as to learn the experience of the companies that had successfully attracted foreign finance.
The experts of IBcontacts company and Atradius pursued the series of innovative seminars conducted in an interactive format. The First International Seminar on Trade Finance was organized by IBcontacts company on May 19, 2011 in cooperation with the world’s leader in trade and project financing, German ECA Euler Hermes.
For more information, please contact Ms. Iryna Vasylenko, Head of IBcontacts Communications Department via phone +38 044 359 02 00 or e-mail email@example.com