Trade opportunities offered by Ukraine
Ukraine is emerging as the gateway to growing markets in Russia and Eastern Europe. No longer just a Soviet hangover, Ukraine is becoming an economic power in its own right.
It’s a market with a population twice the size of Australia, strategically positioned between Eastern Europe, Russia and the Middle East, thus with the potential to service a number of growing areas.
According to Valentyn Adomaytis, Ukrainian Ambassador to Australia and New Zealand, interest in Australia is increasing, just as bilateral trade has grown to more than AUD500 million over the past few years.
“In the current global economic recovery we are witnessing a growth of business cooperation between Ukraine and Australia,” he says, noting that Australian exports to Ukraine more than doubled in the first quarter of this year.
While Australia isn’t generally well known in Ukraine, there are sectors where we are well regarded, says Dan Tebbutt, senior trade commissioner in Austrade’s Moscow office which services Ukraine: “In mining, we have an extremely positive reputation and in agriculture we’re widely known and respected.” And with Ukraine evolving its agribusiness and mining industries, it’s a country wide open to Australia’s expertise in those areas.
New exporters
Ukraine is not really a market for new exporters, warns Tebbutt. “It’s a country of great potential but it’s also a country of considerable challenges. It’s still an emerging market and it’s still a country where issues such as the rule of law is a concern.”
He does, however, suggest that leveraging our expertise in agriculture may help. “It has a fair bit of unrealised potential. Australia has a lot to offer Ukraine in terms of services for increasing the efficiency of their agricultural production,” he offers.
Another aspect of agriculture is livestock, suggests Stefan Romaniw, chairman of the Australian Federation of Ukrainian Organisations. “I’ve been put in touch with people who are interested in exports from Australia. They want cattle and sheep, of all things, because they’re trying to build their industry.”
Similarly, the mining sector can play to Australia’s strengths. Ukraine has an energy shortage and is largely reliant on Russian gas. Australian companies can help by providing more modern techniques for exploiting their coal reserves and unconventional gas.
“We know of Australian companies actively looking for those types of opportunities in Ukraine as Australia has a lot of knowledge and experience in that area,” says Tebbutt.
New exporters to Ukraine tend to be larger as they are able to take greater risks. Smaller businesses should watch out for the offshoot opportunities that arise from bigger players making moves in the market.
Existing exporters
Mining and agricultural technology and services are more the domain of small to medium sized businesses than big corporates and the two sectors are just a launching pad for other services that Australia could introduce, notes Romaniw.
“We have a lot of intellectual property: for example, we could go to government and provide some of the expertise in processes that we have here.” He suggests that concepts such as occupational health and safety training to reduce mining accidents could reach other areas: “There’s a huge market in Ukraine, because that’s not a concept that people have quite grasped, especially when you see some of the building sites.”
He adds that although Ukraine is very advanced for an ‘emerging’ market, Australia could offer complementary services. “There are opportunities such as in operational maintenance; you may have the great planes but we can certainly service them,” he says.
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