News Tag: експорт
Rules of origin for apparel and footwear under the CUFTA – video

In order to obtain preferential access to the Canadian market under the Canada-Ukraine Free Trade Agreement (CUFTA), the product must be of Ukrainian origin.

The rules of origin impact on:

  • Import duty rates
  • Tariff quotas
  • Export trade statistics

It is essential to know that a declaration of origin of the goods is the only document Ukrainian producer needs to confirm the origin.

What does this mean for Ukrainian business?

Ukrainian companies don’t have to receive any additional certificates. The origin information shall be indicated on an invoice or any other document containing the description of the goods. Therefore, it means reducing financial and time costs for customs clearance of export products.

You can find out more about rules of origin for Ukrainian apparel and footwear goods under the CUFTA from Olexandra Brovko, CUTIS Senior Expert on Trade and Investment.

To free download the manual – I CAN Export: Rules of origin under the Canada-Ukraine Free Trade Agreement. Guidelines for Exporters (in Ukrainian), please follow the link.

Target commodities and services for export promotion to Canada within the Export Strategy of Ukraine

The Ministry of Economic Development, Trade and Agriculture of Ukraine in partnership with the Canada-Ukraine Trade and Investment Support Project (CUTIS) and the National Institute for Strategic Studies presented a report “Target commodities and services for export promotion to Canada within the Export Strategy of Ukraine” on March 5.

The research was conducted by the experts of the Ministry of Economic Development, Trade and Agriculture of Ukraine, the SE “Ukrainian Industry Expertise”, Export Promotion Office (EPO), and supported by the CUTIS project.

The study was divided into two parts. The first one is focused on the selection of most promising commodities and services of Ukrainian exports to Canada within the framework of Ukraine’s Export Strategy.

356 commodities (food and machinery industries) were analyzed, resulting in the selection of 18 target groups.

Besides, the following target services for export promotion from Ukraine to Canada were analyzed: ICT (Computer services) and Creative industries (R&D, Professional and management consulting services, Technical, trade-related, and other business services, Audiovisual and related services, Other personal, cultural, and recreational services).

In the second part, comparative analysis and rating of target commodities and services were carried out.

As a result of the study, the following priorities for export promotion were selected:

Food Industry:

  • Fruits and nuts, frozen;
  • Tomatoes prepared or preserved;
  • Sugar Confectionery;
  • Vegetables, fruit, nuts, prepared or preserved;
  • Chocolate.

Machinery:

  • Articles of Carbon or Graphite Used For Electrical Purposes;
  • Non-Electric Radiators, Air Heaters;
  • Electric Domestic Heating Apparatus;
  • Household or laundry-type washing machines.

Services:

  • Computer services;
  • Technical, trade-related, and other business services;
  • Professional and management consulting services.

As Sergii Kovalov, Deputy Director of the Department of Export Development, Ministry of Economic Development and Trade of Ukraine mentioned, the next steps are development and approval of the Strategic Plan of export promotion to Canada. The ministry also plans to apply this methodology to select export promotion priorities and develop strategic plans for other markets in focus.

EPO is ready to use research results for preparing trade missions to Canada and provide consultations to Ukrainian businesses interested in exporting to Canada.

SheChampion: Vinnytsia and Khmelnytsky women entrepreneurs studied successful export experience to foreign markets

The CUTIS project in cooperation with regional chambers of commerce and industry launched a series of #SheChampion seminars. The main goal is to discuss barriers women entrepreneurs face in business and international trade, as well as share experience in entering foreign markets.

On February 19, in cooperation with the Khmelnytsky Chamber of Commerce and Industry, the first #SheChampion seminar was held in Khmelnytsky, bringing together 30 participants.

Women entrepreneurs discussed gender issues in international trade, new trends in the Canadian markets and shared success stories of finding new partners in foreign markets.

Vira Porovska, CUTIS gender equality expert, made a presentation related to the main barriers for women’s SMEs in exporting (according to GBA report). She also conducted a master class ‘How to find the right people to your business’. The participants learned how to determine what competencies a specialist should possess and how to conduct a professional interview in the absence of a qualified HR.

Maryana Ovcharuk (handcrafted soap “Soap Stories”) and Galina Mikhnyak (CASCAD-HOLOD, furniture and logistics services) explained the complexity of entering new markets based on their own experiences. Besides, they focused on barriers and provided practical advice on how to overcome the challenges.

On February 20, the third #SheChampion seminar was held in Vinnytsia in cooperation with the Vinnytsia Chamber of Commerce and Industry. About 36 women entrepreneurs participated in the event.

During the seminar, the participants learned about gender issues in international trade, and perspective sectors for Ukrainian small and medium enterprises in the Canadian market.

In particular, Vira Porovska CUTIS gender equality expert shared the main achievements of the SHEforSHE mentorship program for women entrepreneurs.

Maria Terekhova, managing partner of the New Fashion Zone platform and one of the mentors of the SHEforSHE program, spoke about the changes introduced by the participants (manufacturers of children’s clothing) as a part of the preparation for the Apparel Sourcing Paris exhibition. Maria also shared her impressions of negotiation with foreign buyers in Paris and explained the basic requirements of foreign distributors to Ukrainian clothing and textiles. Participants also discussed the specifics of the Canadian apparel market and change Ukrainian producers need to adapt.

Besides, trainer Kateryna Voylova provided expertise and professional advice concerning promoting hand-made products on the ETSY platform. During the presentation, issues such as product placement, pricing, and paying difficulties were raised.

In the end, Vira Porovska held a master class to increase staff motivation.

Similar events are planned in other regions of Ukraine. The next seminar will be in Dnipro on March 3. So keep an eye on the updates.

SHEforSHE Mentorship Program: CUTIS Project brings women’s businesses to a new level

In 2019, the CUTIS project presented a gender-based analysis report on the export challenges of Ukrainian small and medium-sized enterprises (SMEs). The main objective of the study was to identify gender-based challenges of women-owned or -led enterprises in exporting and provide recommendations on reducing these barriers.

The report confirmed that traditional gender stereotypes hinder women’s advancement in business. The survey participants indicated that permanent access to mentoring and professional development is an important element of success in building their own business.

This is how the idea of CUTIS introducing a SHEforSHE Mentorship Program came about with the aim to support development of women’s businesses in Ukraine and promote their products in foreign markets, primarily, in Canada.

TM SASHA (children’s dresses) production

Two mentors, who already have successful experience in promoting products in foreign markets, were selected. They are Maria Terekhova (Kyiv, New Fashion Zone platform) and Ruslana Rymarska (Lviv, Smakuli cookies), participants of our U CAN Export Support Program for Ukrainian SMEs.

In partnership with the Regional Chambers of Commerce, two teams of participants were formed. The following factors were taken into account during the selection: business development dynamics, availability of an interesting product (or prospects for its creation), export potential, and most importantly, readiness for change and implementation of ideas developed during their participation in the program.

The first team headed by Maria Terekhova as mentor included the following mentees: Olesya Tymoshyk (Chernihiv, children’s clothing TM “TimTex”), Kateryna Volkova (Slavutych, TM SHUBA (home and baby textiles) and TM SASHA (children’s dresses) and Yevhenia Lukash (Kherson, EvgaKids children’s clothing Internet store).

Maria Terekhova and Kateryna Volkova

 

The second team consisting of mentees Halyna Ishchak (Ivano-Frankivsk, private entrepreneur, cakes and biscuits) and Iryna Fishchuk (Ivano-Frankivsk, private entrepreneur, confectionery) is headed by Ruslana Rymarska.

Meeting of Ruslana Rymarska and potential participants of the program

 

As Kateryna Volkova shared, the mentor visited the enterprise in Slavutych as part of the cooperation. During the meeting, the main challenges facing the company and complexity of entering new markets were discussed and a plan for further cooperation was developed. Every week, the mentor and the mentee discuss implementation of the developed plan of changes via Skype.

Children’s dresses TM SASHA

 

“There were a lot of issues that I have been trying to solve over the years. I found some of the answers to these questions myself, and of some with the help of Maria Terekhova, my mentor. It became clear to me that in order to work effectively in foreign markets, the company needs an export specialist. Finding one requires additional time and financial resources. Then the idea came up: why wouldn’t I master a new profession myself? This is exactly what I am focusing on now”, – Kateryna shares her experience.

According to Olesya Tymoshyk (TM “TimiTex”), while working with her mentor, she was able to modernize the design of clothes for the nursling to find a new client (B2B) and a new supplier of fabrics that she is currently negotiating with.

New product

 

“When you have been working for a long time, you get used to the technological process, your models, and you do not always understand the need for change. It is difficult to stop, figuratively speaking, step aside and watch the company without sentiment. This is where you need external experts with new, different, broader experience and knowledge, who immediately see what needs to be changed, improved, removed or added. Maria Terekhova is an expert with whom I was fortunate to work in one team. Her excellent experience, contacts and resources enhance our business and drive us to grow”, – says Olesya.

We wish our mentors and mentees further success in the development of Ukrainian women’s businesses. We will keep you informed of further achievements of these dynamic women entrepreneurs!

What impressions did Ukrainian manufacturers make on Canadian buyers and what are the prospects of Ukrainian products in the Canadian market?

The CUTIS project has organized a visit to Ukraine for Canadian distributors interested in finding reliable food and beverage suppliers for the Canadian market.

During the 10 days of the trade mission that Canadian business representatives spent in Ukraine, they visited Kyiv, Lviv, Kharkiv, Dnipro and Zaporozhzhia and met with representatives of more than 40 companies.

Yuriy Baranov, founder of CAALCO distributors corp., distributor of Yummy Market (Canada)

My company has been involved in the import of alcoholic beverages for the Canadian market for over 20 years, and at the moment I am considering expanding the import line with foodstuffs. I have a good track record of working with such leading Ukrainian alcohol companies as Bayadera group (TM “Hlibny Dar”), continue to negotiate with Alef Vinal (vodka Green Day, brandy Jean-Jack).

During the mission, I also established business relationships with such well-known companies as Petrus, Staritsky&Levitsky. A real discovery for me was the company “Ukrainian Medovary” from Drohobych, which restored almost lost recipes of Ukrainian natural beverages based on honey. A nice addition to the CUTIS program was a meeting with the Ukrainian Chamber of Commerce management.

I personally visited 12 companies and had about 20 meetings with representatives of Ukrainian business. Most of them amazed me with the high production culture, quality of products, flavour profiles, professionalism of their teams. It feels like these companies have a clear export strategy, a creative team and are result-oriented.

I would like to emphasize the companies such as Beehive, Malby (TM Millenium), Klion group (TM Veladis), Lviv handmade factory, Bob snail, Bayadera, Bester. These companies have every reason to be optimistic about the future of Ukrainian exports to the global markets.

I am often asked what the main prerequisite for the success of a product in the Canadian market is. The answer is simple and complex at the same time: the product should be interesting to Canadian distributors and buyers.

If a Ukrainian company plans to target only the ethnic market and the Ukrainian diaspora in Canada this kind of expansion is 99% doomed. Indeed, the Ukrainian diaspora has more than 1.6 million people but the vast majority of them have no idea what modern Ukraine is and what kind of products it produces because their ancestors came to Canada before the 1917 revolution. True, they are loyal to everything Ukrainian, but they have grown up in Canada and usually consume local Canadian products they are used to.

I think it is optimal for a Ukrainian company to initially test their product in the ethnic market, to understand how interesting it is to Canadian consumers. Only if the product is in demand should they try to approach Canadian grocery chains and address such issues as customizing the name or developing the label to meet Canadian requirements (labels in Canada must contain information in 2 official languages – English and French). It’s worth starting with European-oriented networks such as Yummy Market or Starsky.

Michael Prudkov, Vice President of Crussimpex, a Canadian distributor company   

Crussimpex is a food importer that cooperates mainly with small manufacturers and distributes throughout Canada.

Crussimpex already has experience working with Ukrainian companies, and we want to expand the mix of Ukrainian products in the Canadian market.

During the mission, I met with representatives of about 20 Ukrainian companies. The overall impression is positive. There are many decent manufacturers on the market.

In today’s world, however, having a good product is not enough. You need to be ready to invest in entering foreign markets.

I got the impression that not all Ukrainian companies understand how to promote and sell their goods abroad. Exports require extra costs: into skilled personnel, interesting packaging, promotion, marketing, etc. No way without that. In addition, the entry process takes more than one day – it is unlikely to send a huge batch for the first time. One needs to move step by step and heed the importer’s advice.

You also need to understand the specifics of each region. Canadian consumers, unlike American consumers, are very conservative. It is difficult to get them to buy a product they are not used to. Although geographically Canada is a huge country, the size of the market is small, and it is by no means comparable to the US.

I would also advise Ukrainian manufacturers to take a more prudent approach to the issue of pricing. On average, the wholesale price in the Canadian market is three times higher than the wholesale price in Ukraine. Talking about the retail price, the difference is 4-5 times. This includes logistics, distribution costs, retail margins, exchange rate risks, and more.

Not all Ukrainian manufacturers understand this math. They hear the word Canada and immediately inflate the selling price. Canadian consumers are quite sensitive to the price. With overstated prices, Ukrainian goods simply will not find a buyer in Canada.

What Ukrainian foodstuffs have the best chance on the Canadian market? These are definitely not meat or dairy products because they are subject to import quotas and the certification process is quite complicated.

Confectionery products have very good chances and the leaders of the Ukrainian market (AVK, Roshen, Biscuit-Chocolate) are already presented in the market. I think other Ukrainian companies can become a name and compete with Belarusian, Moldovan or Russian manufacturers.

Grocery manufacturers have a good chance: I want to try putting Ukrainian fishery products on the Canadian market.

In general, the chances of Ukrainian companies in the Canadian market are not bad. I think that the representation of Ukrainian goods will only grow. Specifically, if there is support from such programs as CUTIS and from the State.

Emma Turos, Executive Director of the Canada-Ukraine Chamber of Commerce in Ukraine

When entering a new market, not only Canadian, a Ukrainian manufacturer should listen to local importers who understand specifics of their own market much better. Sometimes they ask about five steps to success. The answer is simple – 5 Ps (product, price, promotion, place and people) that you read about in any guidebook. I would add another “P” – practice. Practice export activities on a daily basis, and everything will get clear. Understanding the process of entering a market and the sense of time and partner are very important qualities of an entrepreneur.

In most cases, it will be difficult to sell the product as it is marketed in Ukraine. In the food industry, you need to consider everything – product appearance, taste, preservation of tastiness and appearance over a long period of time (only transportation to Canada takes almost two months), packaging, labeling, product and brand name. The product name must be clear to the buyer, it must be international. The exception is ethnic markets. In this case, the name should meet expectations as much as possible. Simply speaking, if the label indicates that these are “Artek” waffles, then they should comply as much as possible with traditional taste and appearance. Buyers buy such products in order to experience the “taste of childhood”. By the way, Ukraine clearly under performs in this area. For example, there are so-called “Kyiv” cakes on the Canadian market. However, they are made in Moldova. There is also a general rule: if a brand is stronger than a product, the brand must be promoted. If the product is stronger than the brand, then the product is promoted. One may also operate here under private label. Ukraine has very few globally known brands, so one should be flexible about the product name and brand. We have cases where both the product and the name were changed to more universal ones.

Pricing is another sensitive issue. Ukrainian manufacturers must clearly understand their competitors in each market segment. In the ethnic market, for example, (gingerbread, cakes, bagels, candies, etc.) we compete in price and quality with Moldova and Belarus.

Two heads are better than one and if a company has a clear strategy and resources I would not recommend saving on expert services. Without knowing the market requirements and the preferences of consumers in other countries, mistakes can be made that they will cost a lot. Trying to re-enter a new market afterwards is very difficult, since the Canadian market, for example, is not that big, and the reputation will be difficult to restore.

We live in a global world of change where you have to constantly fight for your place but do that diplomatically and with a polite smile. I am deeply convinced that Ukraine still needs to take a worthy place in the global trade not only with resources but also with high value-added products.

Ukrainian clothing manufacturers have every reason to succeed in Canada – fashion industry expert

The CUTIS project and the Canada-Ukraine Chamber of Commerce, under the CUTIS apparel trade mission, organized a visit to Ukraine by a representative of the Canadian fashion industry who is interested in finding reliable clothing manufacturers.

Sonali Nayak, Fashion Priests president, met with representatives of five Ukrainian companies participating in U CAN Export CUTIS support program for small and medium enterprises. They are:

Fashion Priests is a relatively new company with ambitious plans. It operates in several markets (including Canada, the USA, and India), and is constantly expanding purchasing geography.

Thanks to the Conference Board of Canada and TFO Canada, Sonali Nayak also visited Indonesia with a buyers’ trade mission. ‘Ukrainian companies are more ready to enter the Canadian market, the samples and models presented by Ukrainian manufacturers may be interesting for Canadian buyers,’ she said.

‘During the mission, I had the opportunity to meet with representatives of five Ukrainian companies (from the sports swimwear and leggings producer to the outwear factory) who made a positive impression on me.

Interesting models, modern equipment, high technology, good quality fabrics, creative teams are the components of Ukrainian clothing producers’ potential success in foreign markets,’ Sonali Nayak mentioned.

‘I definitely see the prospects for further cooperation. We have to harmonize, for example, size guides, because in Ukraine and Canada they are different, to choose the optimal styles and fabrics. I hope that the Fashion Priests specialists will visit the selected Ukrainian enterprises once again in the spring and will discuss all the details as well as made trial orders’, Fashion Priests president explained. 

Thanks to the Canada-Ukraine Free Trade Agreement, Ukrainian clothing is imported to Canada without paying import duties (18% on average). This is an additional plus for business partnership with Ukrainian manufacturers.

Maria Guzman, CUTIS Canadian expert and TFO Canada consultant, advises Ukrainian manufacturers to pay additional attention to details such as size matching, curves, seam size, etc. Ignoring such things can lead to Canadian buyers refusing to make an order, even if they generally like the style and clothing model, Maria Guzman concluded.

Interesting facts about free trade agreements with Canada

There are 14 free trade agreements currently in force in Canada involving 51 countries. According to Statistics Canada, at present Canada’s trade with these countries accounted for 78.5% of Canada’s IMPORTS and 89.7% of Canada’s EXPORTS in 2018.

The objective of free trade agreements is to increase trade with partner countries by reducing tariff barriers and opening access to foreign markets.

Three biggest free trade agreements:

North American Free Trade Agreement, NAFTA. Canada’s total trade with the member countries of NAFTA was valued at $788 billion and accounted for 66.8% of Canada’s total trade with the world in 2018.

Comprehensive Economic and Trade Agreement, CETA. Canada’s total trade with the member countries of CETA was valued at $118 billion and accounted for 10.0% of Canada’s total trade with the world in 2018.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership, CPTPP. Canada’s total trade with the member countries of CPTPP was valued at $98 billion and accounted for 8.3% of Canada’s total trade with the world in 2018.

On August 1, 2017, Canada-Ukraine Free Trade Agreement, CUFTA, entered into force. The Agreement will immediately open customs-free access to 98% of Canada’s market. This refers both to agricultural and industrial goods.

Canada’s situation is more complex. Right after the Agreement comes into force, the duties will be eliminated only for 72% of Canadian goods. The duties for the rest of 27% will be gradually reduced in compliance with transition periods – 3, 5, and 7 years. Besides, the Agreement provides for partial liberalization on the agricultural products key for Ukraine as well as some tariff rate quotas and specific goods.

Canadian ICT business successfully develops cooperation with Ukrainian partners at Lviv ІТ Arena

This year, Canada was first represented with its national booth at the Lviv IT Arena, the biggest Ukrainian IT conference, which was held on September 27-29 in Lviv, Western Ukraine.

With the support of the Government of Canada, a range of events under the Canada National IT Program has been conducted. It’s a bright illustration of the great attention paid to developing cooperation between the Ukrainian and Canadian ICT sectors.

With the assistance of the Embassy of Canada, six leading Canadian ICT companies have visited Lviv IT Arena for the first time (Tektelic, Free Balance, GTA, IT Solution Invest, IT Action Group, and Web4you). 

On September 28, Trade Commission Service, Embassy of Canada to Ukraine in collaboration with the Canada-Ukraine Chamber of Commerce and the CUTIS project, organized the Canadian Business Breakfast which included B2B meetings between Canadian and Ukrainian companies. Roman Waschuk, Ambassador of Canada to Ukraine, opened the breakfast.

During the event, the Ukrainian N-iX company made the presentation of Ukrainian ICT sector achievements (Ukrainian IT Market in 2019 and beyond). 

About 20 Ukrainian companies attended b2b meetings with potential Canadian partners, including as leading companies like EPAM, SoftServe, as small and medium-sized businesses participating in CUTIS export support U CAN Export program (Inoxoft, Perfectial, LaSoft, Taurus Quadra).

On September 29, Canada Meet-Up meeting was held with the participation of the Honorary Consul of Canada Oksana Wynnyckyj-Yusypovych and the Canadian ICT business. About 40 Ukrainian ICT companies visited the event.

Summarizing, it is worth mentioning that the interest of Canadian ICT business in cooperation with Ukraine is ample proof of the high level of services that Ukrainian companies can and already provide to international partners in IT and communications sphere.

Ukrainian footwear companies participated in Canada’s largest shoe show for the third time

From August 18 to August 20, Ukrainian shoe companies participated in Canada’s largest Toronto Shoe Show.

This year more than 650 Canadian and European footwear and accessories brands were taking part in the exhibition.

As part of U CAN Export Support Program, the CUTIS project supported the participation of seven Ukrainian shoe manufacturers:

  • KaDar (Lutsk, men’s and women’s casual shoes)
  • Kredo (Khmelnitsky,  rubber footwear with EVA soles)
  • Olteya (Zhytomyr, women’s leather shoes)
  • Alisa-Line (Kharkiv, children’s rubber footwear)
  • Realpaks (Kharkiv, women’s and men’s rubber shoes)
  • Shoesprom Group (Kyiv, men’s and women’s shoes)
  • Stepter (Lviv region, men’s and women’s shoes)

This is the third shoe show in Canada for the Ukrainian footwear business. Previous trade shows took place on August 2018 and February 2019.

The results of the first two exhibitions are positive. Six Ukrainian producers have already delivered their samples to Canadian buyers, and three deals are almost on a finish line.

Before the exhibition, the CUTIS project organized a meeting of Ukrainian business with Cougar shoe company, which has been successfully operating in the Canadian shoe market since 1948!

Besides, as part of the retail tour, representatives of the Ukrainian shoe industry visited several malls and shoe stores in Toronto, including Nordstrom, ALDO, Hudson’s Bay, Steve Madden, Brawns. Such an introductory tour is very important because it helps Ukrainian businesses understand specific of Canada’s footwear industry and consumers’ preferences.

The Canada-Ukraine Free Trade Agreement (CUFTA) entered into force on August 1, 2017, and opened customs-free access to 98% of Canada’s market for Ukrainian companies. Canada’s situation is more complex. The duties were eliminated for 72% of Canadian goods. The customs tariffs for the rest of 27% will be gradually reduced in compliance with transition periods – 3, 5, and 7 years.

The Canada-Ukraine Trade and Investment Support (CUTIS) Project is a 5-year (2016-2021) Canadian development assistance initiative designed to lower poverty in Ukraine through increasing exports from Ukraine to Canada and investment from Canada to Ukraine. The project funded by the Canadian Government through the Global affairs Canada and implemented by the Conference Board of Canada in partnership with the Canada-Ukraine Chamber of Commerce.

The CUTIS project implements U CAN EXPORT Support Program in five priority sectors: clothing, footwear, furniture, confectionery, and IT services.

Ukraine significantly increased its exports to Canada – infographics

In 2018, Ukraine exported 78.2 million USD in goods to Canada – up by 50 percent in comparison with 2017.

If you compare the figures with 2016, the dynamics would be even more impressive – growth is almost three times.

Imports from Canada to Ukraine are also growing. It has increased from 299.2 to 333.1 million USD.

The Canada-Ukraine Free Trade Agreement (CUFTA) has a great impact on developing the volume of goods exporting to Canada. The agreement entered into force on August 1, 2017 and opened customs-free access to 98% of Canada’s market for Ukrainian companies. Canada’s situation is more complex. The duties were eliminated only for 72% of Canadian goods. The duties for the rest of 27% will be gradually reduced in compliance with transition periods – 3, 5, and 7 years.