“In the last four years we have generated more than 62 projects in various sectors and countries in the Eurasian region”

Interview with Miguel de la Cruz and Egor Zhunyaev, from the Eurasian Trade Alliance

Promoting commercial and economic relations between Spain and the countries of the Eurasian Economic Union (Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan) is the objective of the Eurasian Trade Alliance (ACE).

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We learn more about their activities and their most relevant projects, as well as the services they offer to Spanish companies, from Miguel de la Cruz Salcedo, Managing Director of the Madrid Office of the Eurasian Trade Alliance and Egor Zhunyaev, analyst of the project development department of the Eurasian Trade Alliance.

 

What is the Eurasian Trade Alliance and what services does it offer to Spanish companies?

 

Miguel de la Cruz: “The Eurasian Trade Alliance is a Spanish company created based on a resolution of both Russian and Spanish business groups that wanted to obtain a platform on which to develop their services.

 

Unfortunately, until a few years ago, the informality of some companies, some people have turned the relationship between Russia and Spanish companies into a dark space. Our work is aimed at clarify this type of commercial relations with Russian, and then Eurasian, companies, and with those of the European space.

 

Why am I talking about blocks and not countries specifically? Because after our initial work, from 2016 to 2018 we were faced with the request of many Spanish companies to open their markets to the countries of the former Soviet Union; Thus, in 2018 we expanded our work, we stopped being an Iberian-Russian organization and became a Eurasian organization.

 

 

"The Eurasian region is a growing market with a great need for services and products; through the Eurasian Trade Alliance, we manage projects and in some cases finance them."

 

 

What does the Alliance do? What it does is manage projects to carry them out in specific markets. We manage them, in some cases we finance them, we have a work system for projects that are of interest to us: 30% investment from the interested party, 30% from us and 40% which is what we get through our partners or state agencies.

 

We manage projects, adapt them, support them, or simply give them their initial boost. In this way, over the last four years, we have generated more than 62 projects in diverse sectors of the economy, as varied as food, fashion, engineering, waste treatment… and in diverse markets, including countries not necessarily in Eurasia but in the former Soviet region.”

 

Indeed, several member companies of the Eurasian Trade Alliance carried out a business mission in Tashkent, Uzbekistan at the end of September. What is their assessment of this experience?

 

Egor Zhunyaev: “On the one hand, Iberian companies have presented their projects and business possibilities in sectors such as solid waste treatment, medical equipment, medical transportation, hospital construction, agrologistics and greenhouse construction.

 

On the other hand, the Alliance showed the perspectives of Southern European countries for Uzbek producers of textiles, footwear, etc., interested in internationalization.

 

In summary, the main conclusion is the fsystematic communication discharge between the business communities of both countries. Especially, of course, in times of pandemic; That is why the key task of our mission was to prepare a unique project office for Spanish companies and their associations in Tashkent.

 

I would like to emphasize that it is not just about opening a representative office, it would not be enough. We are talking about a platform for the implementation of specific programs. In that sense we are very happy because we achieved work groups and roadmaps for each relevant project.”

 

How do Spanish companies consider the Eurasian region to do business? Beyond the Russian market, is there knowledge about these countries (Belarus, Kazakhstan, Armenia and Kyrgyzstan) and the business opportunities they present?

 

M.de la C.: “Obviously the current media, communications, internet, allow us to be virtually aware of some situations that may happen in commerce or in countries. However, the Eurasian region is so particular, It is such an atypical territory that it is necessary to have a specific and special approach.l. When we need any project, we give this information in the sense that it is necessary to prepare for an adaptation not only of the commercial proposal but also of the work style. If in the western part the first search engine is Google, here it is Yandex, if we use a favorite social network like Facebook here it is Vkontakte. There are so many particularities and the way of covering the markets is so different that the first thing we do is propose an adaptation process to companies.

 

Regarding relations, while there are certain myths about this region, these are nations that already belong to international organizations, that operate like anywhere else in the world, with the same agreements… In that sense, we don't foresee any difficulties. There are, however, some limitations on the issue, for example, paymentss, the presence of Spanish banks that does not yet exist in Russia or if there is any representation is very limited. These are some topics that we are trying to promote.

 

However, we are very optimistic because practice is showing us that carrying out export and investment projects is feasible, and that we are talking about a market with many perspectives. Many people are unaware that in addition to Russia, which is the largest country in the world with 140 million people, the proximity of the entire Eurasian and former Soviet space makes us talk aboute a market of nearly 200 million people. A very interesting market, growing, with a great need for services and products and with a certain sense of need for this production or these services to be European.

 

In our travels in Uzbekistan we have had a clear statement from the authorities and business groups for the need to obtain European technology and services, particularly Spanish. They are aware not only of the quality of these products but of the complementarity; "We are talking about markets that complement each other and that have many possibilities of continuing to grow."

 

In which sectors are there more opportunities?

M. de la C.: “Opportunities exist in practically all sectors. We are not going to refer to very large sectors, I am referring to gas and oil issues, but if we address medium and small companies there is a lot of interest in construction issues. In the case of Uzbekistan we are promoting projects for the creation of greenhouses, solid waste treatment centers, we have a very interesting project with the largest textile organization, to fashion, expansion and creation of hubs in several European countries including Spain where joint projects can be developed.

 

There is great interest in the topic agroindustrial, technology; Many companies consult us, but if we are in the midst of sanctions, how can we promote our products? I always give them practical examples. If we are characterized by something, it is that ACE is not a consultancy, we have the capacity to invest in certain projects and that means the risks are shared.

 

Returning to the topic of opportunities, the appearance of the first Russian ham, made in Yekaterinburg with Spanish technology, has recently appeared in the press. If there is any kind of possibility of being able to continue trading, it is also on the technology side. Many companies want to have European standards and are willing to buy the technology.

 

In summary, the sectors are very broad: medicine, construction, agribusiness, engineering… There is a lot of potential, and there is also a need for companies to pay attention, turn towards this market and make a decision.”

 

What key aspects should companies in Spain take into account if they want to enter these markets, such as legal, language, bureaucratic, etc.?

 

M. de la C.: “Like any internationalization or export project, first of all We recommend having a specific project, making a specific export plan. Unfortunately, many companies that make inquiries to us sometimes do not have this plan, they try to go abroad without a specific plan.

 

The second thing is to keep true budget and qualified personnel. In any international work situation, communication is necessary, even more so with markets as particular as ours, in the case of Russia.

 

And the third thing, whether you work with us or not, we recommend that you always find a local partner. Both Russia and the entire former Soviet space have distinct ways of conducting business. A strong global relations component is essential, as is close collaboration with authorities and the right contacts.

 

And what it is The administrative and legal process is quite standardized. If Russia has been characterized by anything in recent years, it is that it has greatly digitized these processes. Opening a business in Russia can take 3 to 5 days if it is a personal business and foreign citizens without a residence permit are also allowed to open easily.

 

Then the treatment with banks, taxes, is very similar, The procedures are quite simple, digitized, and with certain benefits. Once the company manages to access the state establishment and registers as a company, they also have the possibility of accessing tenders, public purchases, etc.

 

It is not a complicated process but it is It needs to be a well-structured, planned process, accompanied by people who know the market.. If there is something we try to differentiate ourselves from, it is that all our workers or partners are active entrepreneurs or with a business activity not too distant, and second, they live, work and, above all, speak the language of the countries in which we work.

 

Uzbekistan and Kazakhstan are presented as priorities for the new direction of work of the Alliance, why precisely these two countries?

 

EZ: “It is no coincidence that we use two names: Iberian-Russian Trade Alliance and Eurasian Trade Alliance. In the second case we highlight our presence throughout the region, including in Central Asia.

 

The fact is that Uzbekistan not only has 34 million inhabitants and is a large market, with GDP exceeding about 55.000 billion dollars, but it is part of a commercial hub in Central Asia, it is the second largest economy after Kazakhstan and continues to be one of the most dynamic economies in Central Asia in the medium and long term.

 

Unlike Kazakhstan, Uzbekistan is not formally a member of the Eurasian Union but has enormous integration potential. Furthermore, the country has the possibility of becoming an upper-middle income country in a generation partly thanks to the moment of demographic exceptionality that it is going through: half a million people enter the labor market every year. And the new government of Uzbekistan, which enjoys the support of international financial institutions, is developing reforms to promote foreign trade and foreign investment. With all of this, the aim is to revitalize the development of a true market economy in the country and resemble its economic model to that of Kazakhstan, which has the most developed economy in the region."

 

Do you have any new commercial mission planned that you can tell us about?

 

M. de la C: “Our work is constant, we have opened the first of our offices in the Central Asia region in Uzbekistan, which is in Tashkent. We hope that by the month of November, if the epidemiological situation prevails, we will open the second office in Almaty, Through the same approach, we will organize a business mission of Iberian companies to the region and continue opening up other interesting markets such as Kyrgyzstan, Georgia…