Russian Export Center to help exporters lower losses amid coronavirus outbreak
Russian exporters can count on the help of the Russian Export Center (REC) in minimizing the losses caused by changes in the global economy amid the novel coronavirus pandemic, as well as in using the opportunities created by the new economic situation, the Russian Export Center announced on Monday.
“You need to understand that everything that happens can dramatically change the existing trade relations on the market and become a trigger for their diversification, which can present both new risks and new chances for Russian exporters. The role of the REC is, of course, to facilitate the conversion of any situation for Russian exporters to new opportunities, through our services, as well as state support tools," said REC Director General Veronika Nikishina as quoted by the press service of the REC.
Moreover, the REC emphasizes that they are boosting work with existing customers and are ready to expand it in connection with the changing situation.
"The Russian Export Center, amid global coronavirus pandemic, is ready to expand its work with exporters to help solve problems arising from possible rupture of foreign trade chains as a result of quarantine in a number of states," the press service said.
At the same time, the REC clarifies that state support measures will not be reduced, on the contrary, the effectiveness of financial products will only increase.
“We understand that the economy is experiencing a number of shocks, the macroeconomic consequences of which are still difficult to predict. However, crises always open up new opportunities. Not only does REC perform its ongoing operations to support exporters, but it is also ready to actively draw new customers who are ready to take advantage of the whole arsenal of support measures the center has at its disposal,” Nikishina said as quoted the press service of the REC.
Supporting small business
The Russian Export Center emphasizes that special attention is paid to small and medium-sized enterprises (SME) working for export, they are ready to provide a comprehensive financial package of services (financial products of Eximbank which is a part of REC Group).
“Given the high risks on the markets, we primarily focused on supporting SMEs, as mostly these companies have difficulties in facing the global challenges of world trade. Under existing conditions, the value of government decisions to support exporters is significantly increased. It is important that most of our financial products have already passed test and established themselves among exporters," says Roman Smimbin, deputy chairman of the board of Rusia's Eximbank as quoted by the press service.
The REC emphasizes that in the new conditions, the business needs not only a low cost of services, but also government support tools that are easy to use and able to quickly start working. Russia's Eximbank is ready to move forward and, for example, provide a VAT refund within a week if an entrepreneur provides just seven documents.
The bank is also ready to cover expenses for the purchase of raw materials and components and cover up to 80% of the value of the export contract, moerover, the loans under existing export contracts are issued without solid collateral at 4% yearly in rubles. Deferred payment insurance is also available, and this tool applies not only to commercial, but also to political risks. Political risks mean changes in legislation, impossibility of transfer, non-payment of a sovereign buyer, embargo, force majeure, local wars and revolutions, the press service of the REC says.
Switching to online deliveries
According to the REC, about 400 commercial exhibitions were canceled or postponed around the world due to the pandemic. For the Russian Export Center, exhibitions are one of the important formats of work— among the canceled events there are those in which, with the support of the REC, domestic exporters should have taken part.
Moreover, the Russian Export Center emphasizes that they treat such measures with understanding. Moreover, in response to the situation with coronavirus, the REC transferred many business and business missions for exporters to the online format. In the Far East, a pilot project for matching via video conference has been launched, the press service of the REC says.
"Closing the borders with China has particularly affected exporters in the east of the country. Therefore, we are promptly starting to offer them new formats for finding partners. The REC technology platform allows us to translate most of the projects aimed at conducting business missions abroad," said the vice-president of REC Alexey Kozhevnikov.
It is reported that in the future it will be possible to switch the events of all regional export support centers that are part of the REC structure to the online format.
The REC also plans to open a call-center, which will allow exporters to have a consultation on the products and services of the center remotely and compensate for the lack of information on the situation on international markets. The REC export school has begun to turn a number of its programs into online classes and to develop online educational programs. Analytics and current information on trade barriers is already available online, it can be obtained on the REC website.
Export to China is possible
One of the ways of supporting exporters was providing assistance to companies supplying products to China, the border with which Russia closed earlier due to the novel coronavirus outbreak. In particular, companies which produce goods such as chicken, which was still delivered to China by sea, but the supply of these perishable products by sea began to be delayed due to measures associated with the pandemic. It was decided to transport these goods using the railway.
Overland supplies were problematic due to China’s lack of the necessary infrastructure at the border to receive cold perishable products. The REC fonund a solution. The Russian side proposed, as an exception, to carry out control procedures not at the border, but at the destination stations (Chongqing and Chengdu), where there is appropriate infrastructure. According to this scheme, it was supposed to cross the border in transit.
"Chinese customs agreed to let the pilot containers of chicken meat from Russia through land borders and carry out control procedures at the destination station. In this regard, preparations are underway for sending the first shipment of chicken from the Moscow region to China by rail, which is scheduled for April," reported the press service of the REC.
Now, the first shipment of chicken is being worked out together with logistics partners, test containers will be sent from Selyatino station in the Moscow region and will be transported to China via Kazakhstan. The dispatch is scheduled for April, while the REC emphasizes that the timing will depend on the quarantine situation in China, since many enterprises, warehouses and terminals are still not working in there, and the Russian side is waiting for confirmation from the Chinese partners.
“After the pilot containers are dispatched, cross the border and reach their destination, we will see how delivery takes place, at what time, with what quality perishable goods are delivered by land route, how screening at the border crossing and how control procedures take place at the final station. We will see all the nuances of the new means of transportation, which should be finalized in the process chain and in control procedures, after which we will be able to prepare and send full-container containers trains with perishable goods for export,” Alevtina Kirillova, project manager for the development of export logistics of the REC explained.
A pneumonia outbreak caused by the COVID-19 virus (previously known as 2019-nCoV) was reported in central China in late December 2019. Cases of the new coronavirus have also been reported from more than 190 countries and territories, including Russia, which by now has 438 cases. The World Health Organization (WHO) has officially described the situation with the novel coronavirus as a pandemic. See how the coronavirus pandemic turned life upside down throughout the world.