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Highlands and Islands doing business with the world's largest country

23 February 2012

Businesses looking to break into a Russian market need to offer quality, value for money and be flexible in their approach, according to global exporter Johnstons of Elgin.

Oliver Platts, Sales Director at Johnstons of Elgin, is to share the company's 10 years of experience working in Russia as part of a free event being run by Highlands and Islands Enterprise (HIE) for businesses interested in tapping into the potentially lucrative marketplace. The one day event, which is part of the Smart Exporter programme, offers an overview of the Russian market and individual tailored advice sessions. It takes place on Thursday March 8 at Cowan House in Inverness.

Johnstons, which sells top end branded products in Russia, says it is still seeing growth and is currently enjoying a 20% increase year on year.

"Russia is an obvious choice for a brand such as Johnstons of Elgin. Firstly it is an emerging economy with a vast amount of wealth from oil and gas exports as well as a newly educated and burgeoning middle class. It also has the climate that is conducive to cashmere and woollen spun products," said Mr Platts.

Flexibility in the business is key to development. He added: "The world economy has changed significantly over the past few years and as a business Johnstons of Elgin has to recognise that and accommodate accordingly. We have found that in the past few years our key growth markets have been the emerging markets of South East Asia, South America and Russia - with China hopefully to follow. Initially we met with resistance in these markets due to the nature of our product, traditionally a heavy woollen spun product that does not suit the climate of some countries. As a result we have adapted our range to include much more light weight worsted spun garments and accessories to build our brand in these markets."

Understanding the market is important in finding business and that is where agency support can be crucial. HIE and its international partner Scottish Development International (SDI) have access to networks around the world.

Mr Platts commented: "It is essential to understand the customers and the consumer mindset. The Russian people are discerning and believe in value for money and quality. They have a climate which demands that their products must withstand extreme conditions as well. Distribution into Russia as well as the language barrier are also the main stumbling blocks so it is important to have an understanding of this as well as some representation or translation service available to you. Unlike the EU area there are very few Russian businessmen who speak English, particularly in the fashion and retail industry!

"HIE and SDI are an integral part of breaking a market like Russia. They can offer help and assistance initially and point you in the right direction with regards to representation. From a fashion point of view they helped us with subsidised trips to the market to partake in organised showroom visits and put us in contact with potential clients and customers out there. I recently returned from one of these trips to Kiev and could not have been happier with the organisation and the way the trip went."

Laura Robertson, of HIE, says the Russian market is one which could be attractive to many businesses in the Highlands and Islands. She said: "Russia offers opportunities across a range of sectors. In 2008 Scottish exports to Russia were valued at £170 million with the potential much higher. Food and drink, including whisky and seafood, are creating growing Russian interest, as are services for the oil and gas sector and tourism.

"Highlands and Islands companies are finding new markets in Russia, and we are running this session to help anyone interested in exploring whether they could do business with the world's largest country. The event is on March 8 in Inverness and full details and how to book is on our events page

Background

  • Smart Exporter is an international trade skills programme offering services to companies and individuals based in Scotland who wish to expand their export knowledge. The programme is delivered through a partnership between HIE, Scottish Development International, the Scottish Chambers of Commerce and the European Social Fund.
  • Johnstons of Elgin
    Known for their extraordinary cashmere and beautiful tweed products, Johnstons has been manufacturing in Elgin since 1797. Their history is one of quality, resilience and above all outstanding provenance. It is the only mill in Scotland to take cashmere from fibre to fabric, and is the relied upon manufacturer for international fashion brands and Savile Row tailors alike.

    The company employs over 450 people in Elgin and 250 people in Hawick.

 


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