News Tag: CUFTA
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.

Resource World Magazine highlighted mining in Ukraine

Resource World Magazine – one of the leading media in the business of mining, oil, gas and green technologies with subscribers in 46 countries published the outputs of the Mining in Ukraine conference, organized by CUTIS Project and the Canada-Ukraine Chamber of Commerce (CUCC) within the framework of PDAC Convention on March 2nd, 2020 in Toronto.

The editor Ellsworth Dickson wrote an article about activities of the state-owned Ukrainian exploration company “Nadra Ukrayny”, represented at the conference by the Chairman Taras Kuzmych.

Please read the whole article below:

Ukraine state exploration company seeking partners

By Ellsworth Dickson

In a presentation at the recent Prospectors and Developers of Canada Convention in Toronto, Canada, Taras Kuzmych, Chairman of National Joint Stock Company (NJSC), Nadra Ukrany, outlined the many activities of the state-owned Ukrainian exploration company.

The company carries out geological exploration and invests in projects in the exploration and production sector in the country – mostly oil and gas projects but some mineral projects as well.

Although Nadra Ukrany has been in existence in one form or another for about 80 years, the current state company was formed in 2000 “….to improve minerals supply for country’s needs [and] to reserve and increase geological enterprises’ potential.”

Considering the tumultuous events Ukraine has had to endure during the 20th century, it is remarkable that the NJSC has explored over 1,800 oil fields, discovered over 350 hydrocarbon deposits, drilled over 1,000 wells and added 2.9 billion tons of fuel reserves with the result that both state-owned and private enterprises represent about 95% of hydrocarbons in Ukraine.

The company has noted that these include hundreds of oil and condensate deposits such as: Shebelinske, Yablunivske, Radchenkivske, Sahaydatske, Mihaylivske, Rybalske, Anastasiyivske that have been discovered, tested and put into operation.

Recently, the NJSC has been modernizing its corporate structure and auditing its Joint Activity Agreements. The company is currently offering a selection of blocks, minerals and cooperating frameworks to investors covering the entire country. Bidding by investors is competition based.

For the oil & gas sector, the NJSC is involved in geological exploration, field development and analysis of wells, environmental monitoring and impact analysis R&D, laboratory studies of core, drilling mud and related activities, including engineering and geological research.

Nadra Ukrany has also been involved with exploring and developing various mineral commodities, including the Dashukivske clay deposit, Muzhiyivske gold and polymetallic ore deposit, coal deposits of the Lviv-Volyn coal basin, native sulphur and potassium salt deposits in the Carpathian region of Ukraine, the Dnieper brown coal basin, the Klintsy native gold deposit (the first Ukrainian gold was extracted out of its ore), and even mineral waters as Naftusya, Morshinska, Polyana Kwasova and Shayanska, as well as numerous deposits of decorative and construction brick.

There are several ways foreign investors can participate such as a Production Sharing Agreement (PSA), a Production Enhancement Contract and Joint Activity.

One example that is available is a farm-in PSA opportunity in the Oleska Oil and Gas Project in western Ukraine. This would involve E&P of conventional and unconventional hydrocarbons. Other oil & gas opportunities are also available.

There are also partnership opportunities for mineral development as well, including titanium in the Zhytomyr region, zirconium in the Krasnorichenske ilmenite field and zirconium, vanadium and scandium in the Paromivske ilmenite field. Scandium is a rare and valuable metal capable of increasing the strength of aluminum to that of steel, making the alloy especially useful for aircraft applications.

Blessed with petroleum and mineral wealth, Ukraine is keen on developing its natural resources and is welcoming foreign investors to participate in a variety of projects.

New opportunities for foreign investors in the Ukrainian mining industry were presented in Canada

Prospectors & Developers Association of Canada (PDAC) Convention in Toronto is the world’s annual premier mining industry event, bringing together investors, analysts, mining executives, geologists, students, and government officials.

Attendance at the 88th PDAC 2020 Convention totaled 23,144, highlighting the resilience and innovation of the international mineral exploration and mining sector.

Over 132 countries were present at PDAC, including major mining companies from the United States, Canada, China, Brazil, Australia, India, and South Africa.

For the first time within the PDAC agenda, Canada Ukraine Trade and Investment Support Project (CUTIS) in conjunction with the Canada-Ukraine Chamber of Commerce (CUCC) organized a half-day event called “Mining in Ukraine”. Ukrainian State and private mining representatives, as well as Canadian and American mining companies doing business in Ukraine presented to over 80 potential investors. The speakers shared their knowledge about the Ukraine mining industry and potential opportunities.

Roman Opimakh, who serves as the Head of the State Service for Geology and Subsoil of Ukraine was one of the first Ukrainian government speakers. Opimakh highlighted that Ukraine is on its way of transforming State Service for Geology into the service-oriented agency. The plan is to restore trust in the agency by improving the efficiency of its operations and creating investment opportunities for foreign companies. The agency is currently working towards activating “dormant” licenses and lifting artificial regulatory barriers. To attract investments in the development of the Ukrainian mineral sector, the agency is improving access to the existing geological data and conducting e-auctions and PSA tender for mineral projects.

The next speaker, Matt Simpson, CEO of Canadian company Black Iron Inc., a publicly listed company on the TSX, provided an overview of the company’s Shymanivske Iron Ore Project located in Ukraine’s iron belt 8km from Kryvyi Rih, the city with 750,000 people. The site is 2 km from rail, 30 km from power and will have access to 5 ports – 230 km to 430 km from the site. Matt Simpson said that they will need to invest US$436 million for the construction of the mine and plan to produce 4 million tonnes per year of premium 68% iron ore product. The production is scheduled to begin in late 2022. The Company is working closely with the Government of Ukraine to get all the necessary approvals to begin construction. If the project is successful, Matt Simpson predicts that it will generate US$1.2 billion investment over the next 20 years.

Brian C. Savage, Chairman and CEO of Avellana Gold Ltd. a privately held mineral exploration and development company, provided an overview of its development activities in Ukraine. The company owns licenses for gold-polymetallic deposits located in the western, Transcarpathian region of Ukraine near the border with Romania and Hungary. The three licenses cover over 1,300 hectares of land. The company has completed a 3d resource model and is developing a life of mine plan that targets 1 million tonnes of underground mining. Brian Savage said that it will take another two years to bring the project into the production of gold and zinc.

Chairman of the Board of NJSC “Nadra of Ukraine” Taras Kuzmych presented the opportunities of cooperation with NJSC “Nadra of Ukraine”. In particular, Taras Kuzmych outlined the plans for the transformation of NJSC “Nadra of Ukraine” and on specific proposals for cooperation in the field of development of minerals.  In addition to presenting these potential investment projects, Taras Kuzmych stressed the readiness of NJSC “Nadra Ukrainy”, which has vast experience and local expertise, to assist foreign companies entering Ukraine.

Taras Kuzmych presented a detailed brief on frameworks of cooperation with NJSC “Nadra Ukraine” in the joint development of blocks. In particular, it can be conducted on the basis of Production Sharing Agreements (PSAs), Production Enhancement Contracts (PECs) or Joint Activities Agreements (JAAs).

Stanislav Letyvniuk, Development Director of Kislotoupor Group, which was established in 1996, provided an overview of its mining activities in Ukraine. Kislotoupor has been operating in Ukraine for the last 24 years producing and supplying clay, gypsum, and other raw materials for glass production. The Company has completed 7 successful projects in the mining industry 4 of which where greenfield. The production has been exported to more than 10 countries, including countries in Europe, Asia, and the CIS countries. The Company has started a collaboration with customers in North America. In addition, the Company offers consulting services in the areas of deposit analysis, from exploration to the preparation of a business plan and project support.

CUCC’s plan is to hold a similar event next year at PDAC 2021.

All speakers presentations are available on the CUTIS Trade & Investment Portal

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.

How to export furniture to Canada: market trends and consumer preferences

The Canada-Ukraine Trade and Investment Support Project (CUTIS), the Canada-Ukraine Chamber of Commerce (CUCC), as a part of the partnership with the Ukrainian Furniture Association participated in the Smart Export 3.0 conference.

The event brought together about 70 furniture industry representatives who are interested in export development.

Ihor Sanzharovskyi, Director of the CUTIS project in Ukraine, briefly explained how the project supports Ukrainian small and medium-sized businesses (SMEs) in developing export to the Canadian market and focused on the information materials prepared by the project. He also presented a new guide “How to export furniture to Canada”.

You can download the furniture export guide here (in Ukrainian).

Maxim Boroda, CUTIS Senior Trade and Investment Analysis Expert, told about specifics, trends, and consumer preferences in the Canadian furniture market. It’s an interesting fact that the total volume of furniture sales in the Canadian market in 2018 amounted to CAD 38.3 billion, in particular, home furniture (CAD 31.3 billion), home textiles (CAD 1.4 billion) and outdoor furniture (CAD 1.1 billion). It is expected that by 2023 the total volume of furniture sales will reach CAD 46.6 billion. Download the presentation (in Ukrainian).

Oleksandra Brovko, CUTIS Senior Expert on Investment and Trade Policy, clarified regulatory requirements and voluntary certification for Ukrainian furniture in Canada. Download the presentation (in Ukrainian).

Please note that under the Canada-Ukraine Free Trade Agreement (CUFTA), Ukrainian products are not subject to import duties. For example, for Chinese furniture, the duty rates are 8-10%.

Vira Porovska, CUTIS Gender Equality Expert, illustrated why gender-sensitive marketing is an essential requirement of Canadian consumers. Download the presentation (in Ukrainian).

Olga Shtepa, CUTIS Project Coordinator, drew the attention of the event participants to the specifics of the Canadian business culture. In particular, Olga Shtepa named 5 essential components for successful exports to Canada:

  • Website in English (native English)
  • Detailed costs and prices information
  • Farewell to stereotypes
  • Getting rid of misconceptions about your product or service
  • Professional presentation of own products

Download the presentation (in Ukrainian).

Thanks to the support of the CUTIS project 10 Ukrainian furniture companies participated at Canadian Furniture Show 2018: Cube44 (living room and office furniture), ADK (living room and bedroom furniture), Aqua Rodos (bathroom furniture), Merx (kitchen, living room and bedroom furniture), Instyle (kitchen furniture), Stalkon (outdoor furniture), Blest (living room and bedroom furniture), Snite (children’s furniture), Kulik System (office furniture) and Renaissance (children’s furniture) companies was exhibited.

You can read the Blest company success story in the Canadian market here.

The success story of Cube44 furniture company can be found here.

CUTIS trade mission: Ukrainian footwear companies produce trial samples for the Canadian market

The CUTIS project and the Canada-Ukraine Chamber of Commerce organized a visit to Ukraine of Canadian TellTrading Co Ltd company representatives interested in finding reliable footwear suppliers for the Canadian market.

Danny DaSilva and Bruce Mowday met with four Ukrainian companies that are already exporting or seeking to export shoes to Canada, and have visited manufacturing facilities:

  • Olteya (Zhytomyr, women’s leather shoes)
  • Stepter (Lviv region, men’s and women’s shoes)
  • Kredo (Khmelnytsky, winter shoes with EVA soles)
  • Zirka Manufacture Factory (Cherkasy region, children’s, men’s and women’s shoes)

Olteya, Stepter and Kredo companies are members of the U CAN Export support program for small and medium enterprises interested in exporting in Canada. With the support of the project, the companies have repeatedly participated in Canada’s largest shoe exhibition – the Toronto Shoe Show.

The Canadians also visited the Kachorovska Atelier, which specializes in customized shoe and handbags making, and held a meeting with its owner.

Emma Turos, Executive Director of the Canada-Ukraine Chamber of Commerce in Ukraine and CUTIS project manager is pleased with the results of the visit of Canadian buyers.

‘The Canadian footwear industry representatives highly estimated the Ukrainian manufacturers – the quality of products, interesting portfolios, and modern equipment. Three Ukrainian footwear companies got trial orders from Canadian partners,’ Emma Turos said.

According to her, positive results were achieved through the collaboration of shoe manufacturers with CUTIS project experts.

‘The selected companies have already intimate knowledge of the Canadian market specifics, as they have been working with experienced Canadian specialist Phil Zwibel for three years. The companies participated in Canadian exhibitions, got acquainted with the local footwear market and consumer preferences, met with leading Canadian manufacturers, constantly improved and adapted products as well as optimized prices according to the advice of CUTIS experts. For example, waterproof footwear lines have been developed which are in high demand in Canada,’ Emma Turos explained.

We hope that trial samples will be the beginning of fruitful cooperation, and we look forward to a positive outcome.

CUTIS held an export forum for apparel and footwear manufacturers interested in trade with Canada

The CUTIS project and the Canada-Ukraine chamber of commerce held a practical export forum in Kyiv for Ukrainian companies interested in exporting apparel and footwear to Canada.

During the event, participants had the opportunity to learn more about the Canadian footwear and apparel market, get acquainted with specific features of product promoting in Canada and communicate with Canadian experts who have huge experience in cooperation with Canadian buyers and distributors. The forum brought together about 50 small and medium enterprises.

Adam Barbolet, Senior Trade Commissioner of Embassy of Canada to Ukraine welcomed the guests.

‘Canada has been and remains a reliable partner of Ukraine. The Free Trade Agreement between Canada and Ukraine (CUFTA) came in force in 2017 and has visible results in terms of trade growth between countries. For example, Ukraine has become one of the leaders of apple juice suppliers in Canada.

We are interested in further economic cooperation with Ukraine. We do hope that more and more Ukrainian small and medium-sized enterprises will be able to export their goods to Canada. We want to see these products in the Canadian market, we want to help Ukrainian business to be successful in the Canadian market,’ Adam Barbolet said.

Emma Turos, Executive Director of the Canada-Ukraine Chamber of Commerce in Ukraine and CUTIS project manager spoke about the CUTIS export portal, which will provide relevant information to Canadian and international businesses seeking reliable Ukrainian partners.

Olga Shtepa, CUTIS Project Coordinator, drew the attention of the event participants to the specifics of the Canadian business culture (download the presentation via the link). In particular, Olga Shtepa named 5 essential components for successful exports to Canada:

  • Website in English (native English)
  • Detailed costs and prices information
  • Farewell to stereotypes
  • Getting rid of misconceptions about your product or service
  • Professional presentation of own products/services

Maxim Boroda, CUTIS Senior Trade and Investment Analysis Expert, told about features, trends, and consumer preferences in the Canadian apparel & footwear market.

In 2018, Canadians spent CAD 36 billion on clothing. In particular, CAD 18 billion on women’s clothing and about CAD 11 billion on men’s clothing. By 2023, the total sales of clothing will reach CAD 43 billion, with an average annual growth rate of 3.4%. At the same time, sales of hosiery will increase faster than any other category.

Canadian consumers spent CAD 7.8 billion on shoes, in particular, CAD 3.7 billion on women’s shoes, CAD 3.1 billion on men’s and CAD 1 billion on children’s shoes. By 2023, total footwear sales will reach CAD 9.5 billion.

Sales of man’s footwear will grow faster than other categories. The reason is the increase of men’s interest in fashion trends, especially among young people, as well as the liberalization of the office dress code.

Oleksandra Brovko, CUTIS Senior Trade and Investment Policy Expert, clarified regulatory and labeling requirements for Ukrainian goods in the Canadian market. She drew the attention of the participants to the rules of origin.

Oleksandra Brovko noted that the rules of origin in the CUFTA are based on the so-called North American model, and therefore sometimes different from the rules of origin contained in other free trade agreements between Ukraine and the European and post-Soviet countries.

Zoia Pavlenko, CUTIS Environmental Expert, explained the specifics of voluntary certification of Ukrainian products for the Canadian market and argued why environmentally sustainable production practices are competitive advantages in the Canadian market.

Vira Porovska, CUTIS Gender Expert, illustrated why gender-sensitive marketing is an essential requirement of Canadian consumers.

Apparel and footwear export guides were presented during the second part of the event.

You can download apparel export guide here (in Ukrainian)

You can download footwear export guide here (in Ukrainian)

Participants also had a chance to listen to the presentations of Canadian experts as well as ask questions related to Ukrainian goods prospects in the Canadian market.

TFO Canada consultant Maria Guzman (apparel market) explained how Ukrainian producers should build mutually beneficial relationships with Canadian buyers and shared the success stories of Ukrainian companies participated in CUTIS’s U CAN Export supporting program for small and medium-sized enterprises.

TFO Canada consultant Phil Zwibel (footwear market) brought into focus the typical mistakes Ukrainian manufacturers make entering foreign markets, including Canada. The logistics issues, misunderstanding of market specifics and unwillingness to update a product to the needs of local consumers are the main challenges Ukrainian companies need to overcome.

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.

Lviv entrepreneurs learned about new opportunities for exporting apparel and footwear to Canada

The CUTIS project, the Canada-Ukraine chamber of commerce in cooperation with Ukrlegprom association, Lviv Business School and West Ukrainian Fashion Industry Cluster held a practical seminar in Lviv for Ukrainian companies interested in exporting apparel and footwear to Canada.

During the seminar, participants had the opportunity to learn more about the Canadian footwear and apparel market, as well as to get acquainted with specific features of product promoting in Canada.

The event brought together about 30 companies specializing in women’s, men’s and children’s clothing, as well as women’s, men’s, sports and children’s footwear.

Yuriy Samets, Chairman of the Board of the Western Ukrainian Fashion Industry Cluster and Tetiana Izovit, President of Ukrlegprom association, welcomed the guests.

Emma Turos, Executive Director of the Canada-Ukraine Chamber of Commerce in Ukraine and CUTIS project manager spoke about the CUTIS export portal, which will provide relevant information to Canadian and international businesses seeking reliable potential Ukrainian partners.

Olga Shtepa, CUTIS Project Coordinator, drew the attention of the event participants to the specifics of the Canadian business culture (download the presentation via the link). In particular, Olga Shtepa named 5 essential components for successful exports to Canada:

  • Website in English (native English)
  • Detailed information on costs and prices
  • Farewell to stereotypes
  • Getting rid of misconceptions about your product or service
  • Professional presentation of own products/services

Maxim Boroda, CUTIS Senior Trade and Investment Analysis Expert, told about features, trends, and consumer preferences in the Canadian apparel & footwear market.

It’s an interesting fact, in 2018, Canadian consumers spent CAD 7.8 billion on shoes, in particular, CAD 3.7 billion on women’s shoes, CAD 3.1 billion on men’s and CAD 1 billion on children’s shoes. In 2018, shoe sales in the Canadian market have increased by 3.7% in value.

During the same period, Canadians spent CAD 36 billion on clothing, in particular, CAD 18 billion on women’s clothing and about CAD 11 billion on men’s clothing. Consequently, the women’s clothing market in Canada is almost twice the size of the men’s market.

Maxim Boroda also presented practical export guides to Canada for apparel and footwear producers.

Vira Porovska, CUTIS Gender Expert, illustrated why gender-sensitive marketing is an essential requirement of Canadian consumers.

Oleksandra Brovko, CUTIS Senior Trade and Investment Policy Expert, clarified regulatory and labeling requirements for Ukrainian goods in the Canadian market.

Zoia Pavlenko, CUTIS Environmental Expert, explained the specifics of voluntary certification of Ukrainian products for the Canadian market and argued why environmentally sustainable production practices are competitive advantages in the Canadian market.

Borys Didai, KaDar Shoe Factory (Lutsk) export manager, told about the company’s entry into the Canadian market and the challenges facing Ukrainian manufacturers in this market. You can read the full KaDar success story via the link.