The ties between JOAB Recycling and the Russian recycling market are growing gradually stronger. Having a Russian partner that manages both transport and import makes doing business significantly easier.
The first JOAB refuse collection unit was exported to Russia in 2010. Since then several orders have passed through the plant in Blomstermåla, Småland. The need for efficient waste collection in Russia is great, particularly in metropolitan regions such as Saint Petersburg.
– We are carefully working our way into the country, confirms after sales manager Michael Lindhagen, who has mixed experiences of doing business with Russia.
One attempt to enter the market through a Russian dealer in 2009 provided some important lessons.
– It is essential to ensure that the distributors have the capacity and expertise needed. Particularly when it comes to the red tape that exporting to Russia can entail, he says.
JOAB’s attempt to enter the market in 2009 became a protracted affair with customs clearance. Michael Lindhagens advice:
– Looking into and translating the certificates and documents required for customs and shipping is homework that really should be done at home.
JOAB Recycling is working closer with the Russian market as part of a strategy aimed at a volume market. The product - refuse collection units - is strongly niched, and having operations in many markets is a must for profitability. Efficiency sells.
Moreover, the demand for waste management and recycling from Russia’s public sector is increasing.
– Two trucks with our refuse collection units can replace six Russian waste trucks, Mr Lindhagen says.
The somewhat higher price for the products does not seem to be a critical factor in the business. JOAB’s message is clear: the gains from increased efficiency are great, the technology is worth the price!
– The first contacts with Russian buyers were actually made at a recycling trade fair at Elmia, says Mr Lindhagen.
A week-long trip to Russia in 2009 to study domestic waste-collection technology and survey the expectations of the company’s products led to a breakthrough. The trip resulted not only in valuable knowledge of the culture in the Russian sector, but also in contact with logistics and recycling company, which uses JOAB units today. Contacts were established by this party with a private company that imports street-sweeping machines.
– This is the company we sell to today. It has the knowledge and routines needed for importing products in our segment, Mr Lindhagen states.
Their cooperation has facilitated exports significantly, and sales to Russia can currently be described as relatively simple. JOAB sells directly to its Russian customer, which bears complete responsibility for transport and import. The logistics and recycling company takes over when the product reaches Russia. Mr Lindhagen explains:
– The financial risk is reduced through an agreement, that a certain portion of the payment is made at the time the order is placed. The remaining sum is paid when the product is picked up in Sweden.
Representatives of the Russian partner have visited Blomstermåla to study Swedish waste collection. The business decision included training at JOAB’s production plant for the Russian personnel, who would be responsible for mounting the units on Russian vehicles.
– It is a security for us to know that they are well acquainted with our product, says Michael Lindhagen, who considers it likely that subsequent in-service training will be needed when the unit is updated.