Clients Speak: Oleg Alekseevich Shevchenko

Owner of "Impact", biggest premium glassware brand "Bohemia Crystal" distributor in Russia. In business since 1992.

WFA:

Oleg Alekseevich, you are an experienced business captain, you managed to survive quite a few heavy storms in Russia, in 1995, 1998 and 2008-2009. Do you see any differences between this crisis and the previous ones?

Guest:

I reckon, each crisis has its peculiarities and nuances, although, overall, crisis is crisis. For a wholesale distributor it has rather consequent results. Current macro-economic situation is emphasised by a sharp decline in rouble’s value and lack of cheap funding, without which trade cannot function normally. Rouble dropped in value almost 80%, interest rates went up one and a half time. It is like a hook from the left and right simultaneously.

WFA:

For an importer exchange rate is crucial, of course. Yet it is beyond your control, and so is  a key refinancing rate of the Central Bank of Russia. How do you plan to manoeuvre your business out under such circumstances?

Guest:

First of all, it is always cutting down expenses. Using our experience of 2008-2009, we will have to sharply reduce our payroll costs, move to new premises and new ware house, unless our current landlord agrees to reduction in rent payments. I have been using Oleg Vyacheslavovich as a financial advisor for a long time. I remember very well, when in August 2008 he recommended to undertake similar measures right after collapse of Lehmann Brothers. Unfortunately, my colleagues and myself decided that no trouble should arise due to collapse of a little known in Russia American investment bank. In 2009 we realised what was going on, much too late, it was already hard time, nonetheless, we managed to carry on.

WFA:

Do you think to cut down expenses is enough?

Guest:

We have to use all possibilities to increase efficiency of business. For example, to diversify the product line in favour of economy class items. Now, we mainly trade premium class glassware. Furthermore, we need to find cheaper funding, possibly through extended terms from our suppliers, for their banks give them cheaper money.

WFA:

Depressed value of rouble usually helps domestic producers, what do you think about competition from their side?

Guest:

It is a serious threat, indeed. On other hand, it gives an opportunity for us as well to start production in Russia. We have right expertise and technology to do so. The key point here as always in obtaining funding. For a launch of successful business, we ought to have a project finance line for 5-7 years. I do not doubt that with your assistance we can get it even in these harsh times. However, it is not enough, there must be support from the state in terms of tax holidays, for example, for those, who start new production facilities to replace imported goods. You hear on every corner about importance of it for Russia, and hence, we would like to see that deeds correspond to words of state servants.

WFA:

Well, we wish you to overcome all difficulties as you have always done so and remain a leader in your sector.

Guest: Thank you, with your help, I am confident, it will be the case.