In Search of Opportunity

[rjm]

Just a pity we dont see a few more excellent posts like this from you SB 

Some great stuff particularly about Odessa, I know a guy that last week bought a brand new Honda CRV for $11000 less than it would have cost in Kiev, I think your post perfectly explains to those not in the know how it is possible 

Far cheaper to import Japanese cars of which there is already a thriving business. Further, Japanese cars are likely to last 4 or 5 times longer than a US manufactured automobile.

I doubt whether you are familiar with the unbelievably high rate of duties or customs charges imposed by the Ukrainian government on imports, especially automobiles.

American used cars only require low grade fuel while Japanese normally require premium fuel. I would argue that US cars last just as long and that Japanese cars eed more service and fine tuning. Also with the bad roads and snow in the winter, allwheel drive is someting many are looking for in Ukraine. Plenty of those toypes of cars on the used market in the US. I was not aware of the high import duty and taxes, I got the impression form someone else on this board that it was failry simple to put on Ukrainian plates at a modest fee if done in a certain way. Stat driving it as an expat car, then sell it. And keep doing so, let's say once every month switching between Odesa and Kyiv. In Odesa many are able to "smuggle" in questionable cars from Transnistra, a female friend there gave me all the insights in that business and as she said, everyone in Odessa knows about this and takes advantage of it. No wonder there are so many flashy cars to be seen on Deribaskoya.  Perhaps importing used farm equpment from the US would be a better idea, John Deer and AGCO tractors and harvesters. Give Masey Ferguson (UK) some competition  .     

[ecocks]

Interesting proposition and a good thought on the farm equipment.  Shows you aren't stuck in a rut.

Work it up a bit and get an idea of the amount of resource (money, time, arrangements, etc.) it would take to make it feasible.

Might be just an exercise, then again, an angel might come along and make it happen.

[mattsh]

American used cars only require low grade fuel while Japanese normally require premium fuel.
 

Would disagree with that.  My last car in the states, a Toyota Camry, 4 cylinder, used regular unleaded fuel.  The most basic stuff.  Car before that, a Ford Probe (Mazda drivetrain) also used regular fuel.  Now, if you go for a 6 or 8 cylinder, you'd likely need the premium, but that's likely the same whether its a US or Japanese model. 

[P-N]

To play devils advocate:

1.   Regarding car imports - how would it be more cost effective than bringing them from Europe?  To fly them in is not cost effective.  To bring them in buy ship is a long wait, high transit costs and high import taxation costs and means the south of Ukraine (Odessa and Crimea) as you entry point.  I have lost count of how many times I have advised people to contact "Andbod" (in the forum and by PM) as she has contacts with Hertz and Avis in Italy with thousands of used hire cars for sale and much easier and quicker to get into the country by land, if that is a business plan. (I will await the commission cheque Andbod  )  You then need good contacts in Customs (at the point of entry) and the DAI to stop delays in delivery, documentation, release papers and registration.  With the minimum of delay each machine would be delayed for an average of 2 weeks at customs if they come by ship and someone would have to go to the docks continually to try and get their release.......unless they have "connections".

2.   Regarding farm machinery - when Poland first started to emerge as the country it is today (decades ago), Britain started to send second hand/refurbished tractors to Poland by ferry and laterly Eurotunnel to mainland europe and then into Poland - delivery time 2 or 3 days (being as it is part of the big happy community that is Europe).  The same for the spare parts.  (I do not know, but with Poland having such a good farming community, I am certain there will now be several new manufacturers (British or otherwise) in Poland who do OK from Lviv and Odessa).  If you were to bring in this machinery from the US to be even close to cost effective and in any number the only way is buy ship (see note 1).  Then you have a spare parts issue (which will be harder to get through customs than the machinery itself as it is not so easily identifiable to the customs official and probably not on the customs import lists), plus the delay in getting the spares from the US - unless you warehouse it - at an extra overhead).   You are also then in a competitive market with existing suppliers with a maximum 3 day turnaround for the new (straight from the laithe) parts/machines arriving in/at Ukraine at considerably less cost, in considerably less time and a very easy route (via the happy community that is the EU) to the Polish boarder by land.  When Ukraine then joins the EU there is even less of an issue with customs for the existing suppliers as they will ALL be part of the happy community which is the EU and of course the USA is not part of, and never will be of the EU, you will therefore still be where you started if you started today.

There is, of course, then the tractor and farm machinery manufacturing plant at Nikoliev to take into consideration (no customs issues, transporation costs or delay issues and in the heart of the Odessa farming region)- no doubt the quality can be imporved and the plant upgraded but that finance will no doubt come soon as the EU membership looms on Ukraine's doorstep.  

Of course as there are a few MBA's amongst you, I am not teaching you to suck eggs because you thought of all of this already in your PEST and SWAT analysis done in two minutes in your head.  

Then - if all works out and it is cost effective, connections are made with the right people to make the importation as fast as possible, warehousing (as there is no way J.I.T. trading will be possible from the USA) is sourced you have to find your financier.

Having now given this idea to the 200,000 (plus) members and visitors to this site per month  , some of whom may also think it is a good idea AND have connections, AND have the considerable amount of capital to do it properly, then it may still not work out so well as they have a "lead in" time you cannot match.

All the above said, I know nothing about farming or agriculture - therefore I would never personally invest in something I do not understand and I know I would not have the capital to finance this in a way in which it would be required to even attempt to enter the market successfully.  Also per annum I can achieve from other streams a good return at far less outlay and risk with existing established Ukrainians.

If, however, you do manage all the above, I will take my hat off to you and offer all assistance possible regarding the "red tape" here in the south which I am able to provide, free of charge, relating to the farm machinery.  

[gladiator007]

I know I am a little bit late to this topic but hopefully not too much :-)
First of all thanks Ecocks for bringing an outstanding subject!!!
I add mysel to the idea of Ecocks on the pool of money from different trusted people ....
you guys are talking about meeting on sunday....
...obvioulsly not still in the country myself but would be glad to carry on the conversation on the subject once I relocate .....
Not rich or anyting but like RJM posts,I am about in the same scenario than RJM and  I might /could invest 80 or 90k on an interested pool of investors where the group of people makes for a better amount....
Like Ecocks and I am quite the same wavelength, let's think far beyond Aparment investements , marriage agencies or tourism.....,
By the way , I do appreciate the ideas of SB and find them quite interesting and would love that this thread or subject continues quite long ....(excuse me for my non expert forum writer skills, since I am unaware of the proper forum lexico still,
Back to subject
My personally view is that 2 is beter than 1 and obviously bigger investment better than small for sure...
On this I am not intending to be Einstein...just throwing some positive thoughts
Neither I am an investment guru but I do study like everybody else and intend to put some money for some profit in future and why not between othe people that want to do the same..

Just a pity we dont see a few more excellent posts like this from you SB 

Some great stuff particularly about Odessa, I know a guy that last week bought a brand new Honda CRV for $11000 less than it would have cost in Kiev, I think your post perfectly explains to those not in the know how it is possible 

Far cheaper to import Japanese cars of which there is already a thriving business. Further, Japanese cars are likely to last 4 or 5 times longer than a US manufactured automobile.

I doubt whether you are familiar with the unbelievably high rate of duties or customs charges imposed by the Ukrainian government on imports, especially automobiles.

American used cars only require low grade fuel while Japanese normally require premium fuel. I would argue that US cars last just as long and that Japanese cars eed more service and fine tuning. Also with the bad roads and snow in the winter, allwheel drive is someting many are looking for in Ukraine. Plenty of those toypes of cars on the used market in the US. I was not aware of the high import duty and taxes, I got the impression form someone else on this board that it was failry simple to put on Ukrainian plates at a modest fee if done in a certain way. Stat driving it as an expat car, then sell it. And keep doing so, let's say once every month switching between Odesa and Kyiv. In Odesa many are able to "smuggle" in questionable cars from Transnistra, a female friend there gave me all the insights in that business and as she said, everyone in Odessa knows about this and takes advantage of it. No wonder there are so many flashy cars to be seen on Deribaskoya.  Perhaps importing used farm equpment from the US would be a better idea, John Deer and AGCO tractors and harvesters. Give Masey Ferguson (UK) some competition  .    

RJM---posted that a person bought a Honda car new for 11000!!! wow
As matter of fact I am relocating and was planning to buy a car for myself and  I would love to get in contact with trust people that would sell me a car.
Please, contacts anyone? Odessa, Kiev,etc. Thanks in advance..
oh, also take my hat off Mr P-N, great thoughts and specially down to reality wich this oportunity issue needs a lot where money is involved....
cheers

[Florian]

Just a small comment on Pompey's post.

Working in transport myself, we have noticed that US-made machinery has become substantially cheaper over the past year, resulting in an increase of imports of mostly farming and construction machinery. A company like Amaco (tractors, combines and other agricultural stuff) is doing great business with the lower value of the dollar. They also have a lot of equipment in stock so the waiting time is not really a big issue for the buyer, just for the dealer.

Most of this equipment comes in through the harbours of Bremerhafen and Hamburg in Germany, after which it is transported over land by trucks (this is the part we usually do).

Generally speaking it is fair to say that there really is a market for everything, ranging from cheap Chinese and Korean equipment, to very expensive German equipment. Just don't make the mistake of reinventing the wheel by thinking you are the first player in that market. The fact that the market is there quite often also means that there are already some players actively working in it, because there is money to be made. Our lack of experience in other people's sectors is a weak point which will cost us money. Why not stick to what we know already and do well? We are foreigners with a background in something. In many cases, there is a market for what we already know. Why not capitalize on that and use the experience and skills we gained previously?

Alternatively, we could do something in an area we know needs improvemement. I am talking about the professional partners you wish you could find for your company right now, right here, meaning outsourcing companies, good recruitment agencies, good Ukrainian transport companies, etc. They are all there, but the quality...

I am still open for a meeting. From now on I should also be in Ukraine a bit more often for longer periods of time. Besides, I would be happy to meet Ed again! How are you doing? Haven't seen you in ages!

Hope we are still diving into this!
Florian

[ecocks]

Hmmm, entrepreneurs' sub-group?

Can try it on Sunday afternoon, maybe in Podil?

I will buy the first round, but it has to be somewhere QUIET enough to actually have a discussion.

[ecocks]

Doesn't surprise me that people are making money bringing in that sort of heavy equipment.  Heavier duty cycle builds should do well in this region which is why I suspected that if money was being made on bringing in cars in groups of 3-4 it could well be worth investigating larger-scale projects.

And that is really what it is all about, you know.  Keeping your mind open to the possibilities rather than immediately coming up with the lists of problems and why you can't do that.  It's a shame that some folks have already gotten themselves stuck in that rut despite positioning themselves in a new area of opportunity.

Yes, capital is a challenge, the real world does require money.  Market research, with varying degrees of complexity, needs to be performed and analyzed.  Legal issues need to be sorted out and attended to by those people patient enough to persevere despite all the false information and deadend advice.  As Jon mentioned earlier today, this forum has real sources of information, but it gets cluttered with personal agendas and emotion from time to time.  That's okay in some threads and humor is often good to reduce stress.  However, since this forum is basically unmoderated, an element of common sense and decorum is necessary from the participants.

[rjm]

Yeah totally agree Ed!

These forums really come into their own when practical information is shared around on various things,Ive picked up so much useful info from this board which I would never have found off my own back.

Living in Ukraine red tape can certainly be testing at times and the shared experiences on view here are a wonderful way of helping to deal with it all and come out at the end with your sanity in tact.

Someone recently criticised me strongly for updating the 90 day rule situation on the board, that person totally misses the point that this board is crucial in helping fellow expats in the information minefield, many (myself included at times) rarely come into contact with other expats and find this type of info really useful and vital in running our lives here in Ukraine as pain free as possible.

[P-N]

And that is really what it is all about, you know.  Keeping your mind open to the possibilities rather than immediately coming up with the lists of problems and why you can't do that.  It's a shame that some folks have already gotten themselves stuck in that rut despite positioning themselves in a new area of opportunity.

I could not agree more.  I have started 3 different enterprises in the past 3 months with different groups or individual Ukrainians in 3 vastly differing areas, (for next to no cost), not counting the other interests I already had here or in the UK.  One should (with a fair wind) started 3 weeks ago, give the Ukrainian and myself involved an incredible return within the month/6 weeks (I am amazed it has happened so fast, he is frustrated it has taken so long  ) and was simply a case of networking on both sides of the "invisible east/west" business divide.  The outlay cost, nothing more than a few emails and phone calls from all involved.  The same concept will occur in Kyiv via his contacts and family there.

The opportunities are there, you simply have to think about what you want to do carefully and remember that Ukrainians' know more about business than some people give them credit for.  The surest way to fail is to forget you are in Ukraine and try to force feed "we know best - we're from the West" - you have to meet Ukraine and Ukrainians half way to accomplish any form of real success - Ukraine, after all, is your market.

[Florian]

Count me in for sunday afternoon in Podol somewhere. Can you be a bit more specific about place and time Ed?

See you then!

Florian

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