Russia Offers Opportunities - But beware of red tape!

More than twenty years after Russia and the other countries in Eastern Europe were freed from the shackles of communism; they have grown to represent some of the most important new markets for UK businesses. In a recent interview, Business Secretary Vince Cable said that UK exports to Russia grew by 36 per cent in 2010 and bi-lateral trade was worth more than 6 billion. Whilst leading a trade delegation to Moscow, he also said that more than 600 UK firms were already trading in Russia and more than 2,000 small and medium enterprises have expressed an interest in making inroads into the huge market. Many household names are already well established, including M&S and BP whilst the UK's top four law firms regard Russia as one of the world's best markets. However, developing trade links and exporting products to Russia and other former soviet countries is not always as straightforward as exploring more established markets such as the USA and Europe. One company that has recently entered the Russian market, Burofloor, has encountered a common problem faced by exporters, excessive red tape and expensive import duties. The company is a leading supplier of commercial carpet tiles and recently appointed agents in Russia, Hungary and Romania. Though its ranges of environmentally-friendly office carpet tiles are proving popular, shipping them is proving to be a challenge. "As one of our Russian contacts put it, the government there is making money out of thin air with its rules and regulations," explained a spokesman for the carpet tile specialist. The company has enjoyed success in more traditional markets such as Gibraltar, where it has supplied carpet tiles to an M&S franchise. In Romania it has supplied more than 10,000m2 of carpet tiles for a chain of electrical stores. However, Burofloor, which recently launched a range of environmentally-friendly carpet tiles using recycled material, is committed to making further inroads into Russia, believing the rewards could be huge for businesses who persevere. Many of the views expressed by the company are shared by Cable, who said: "The potential of the emerging BRIC nations, of which Russia is the R, has long been apparent, but the global financial crisis has underlined how important they are not just for world growth but for the UK's growth and jobs too." He went on to say the UK's historic markets are growing only slowly and most world growth in the next years is coming from countries like the BRICs. In each of these countries, the numbers enjoying what we would call a middle-class lifestyle are expanding and seeking the kind of goods that the UK is competitive at providing. "But we cannot rely on existing exporters alone. Research shows that about two thirds of recent growth in world trade has been through new businesses entering the export market and that's why I want to encourage more firms to take up the export challenge," Cable added. Further information about UK Trade & Investment can be found on their website at www.ukti.gov.uk.