Russia distribution a challenge - Rohm and Haas

16 April 2008 10:50  [Source: ICIS news]

DUSSELDORF (ICIS news)--Distribution in Russia is a major challenge for western European producers with high costs and a shortage of suitable warehousing, a logistics director said on Wednesday.

 

"Don't underestimate the amount of work you have to do and the time it takes," Martin Croissant, Rohm & Haas' logistics director for Europe, Middle East and Africa, said at LogiChem's 7th Chemical Logistics & Supply Chain conference.

 

It is not enough to set up a representative office in the country, said Croissant, companies need to be a Russian legal entity or they are not considered to be a committed supplier.

 

Customs processes were seen as a "necessary evil" to navigate and costs can be punitive, accounting for up to 10 times more than in western Europe.

 

Securing first-class warehousing is also a challenge in Russia as there is a shortage of suitable facilities and local companies would much prefer to deliver flat screen TVs than chemicals, he said.

 

As a result, freight rates are high and it was virtually impossible to fix prices beyond a three-month period. Recruiting and retaining staff is difficult too, particularly in Moscow.

 

"There is very high inflation. Russians change jobs very easily and only need to give two weeks notice so companies must have a robust recruitment policy in place," said Croissant at the final day of the conference.

By: Elaine Burridge
+44 20 8652 3214

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