International business projects in the emerging markets of Eastern Europe and Central Asia

Despite the fact that the present state of the economies of the post-Soviet zone of Eastern Europe and Central Asia is characterized by:

• instability of national currencies,
• general imbalance,
• dependence on the macroeconomic crisis phenomena,
• insufficiently exploited natural resources,
• impact of economic sanctions of EU and USA, etc.,

even in this situation there are a number of positive factors justifying the reliability of long-term financial investments of the world capital into the resource-oriented projects of the real economy on these territories and mainly within Russia.

In the current situation, due to dramatic changes in the domestic Chinese markets, these positive factors additionally attract interest of Western mid-market production companies to enter the post-Soviet zone in order to create effective joint ventures.

These positive factors include:

• existence of a huge resource potential within regions and municipalities which has not yet been given the proper commercial dynamics:
• agricultural lands,
• minerals,
• forestry resources, fresh water,
• global logistic potential along the directions: China-Western Europe, the Arctic Sea Way
• urban and rural real estate,
• tourism industry,
• unfilled domestic markets,
• industrial enterprises requiring modernization,
• existence of indispensable logistical means for most of the regions from the Eastern part of the post-Soviet zone, including the Central Russia:
• aviation communication,
• developed railway communication system,
• road infrastructure,
• navigable waterways, both internal and with access to world markets.
• existence of a huge resource of the professional manpower with the high educational potential, which together with unexploited resources might create the basis for arranging of the investment projects with the profitability much higher than in the mature markets of the developed economies,
• existence of necessary legal basis with respect to foreign investments,
• existence of legislatively confirmed administrative support of international businesses,
• existence of practical means for the effective implementation of the investment or the JV projects (priority development areas, technology parks, start-up incubators, etc.).
• existence within most regions of Central Russia of the sufficient purchasing power of population, allowing to ensure the return of investments and achievement of the required profitability even through the implementation of the project in the domestic market.

All this confirms the economic feasibility for developing of the innovative approaches and practical solutions for working with investment projects from the developing economies in Eastern Europe as objects of investment from the global capital markets. One of such approaches we are exploiting for several Russian projects is the participatory investment mode, i.e. a pool of investment participants is arranged for each investment project, including both the profile industrial and the purely financial partners. Such an approach allows to minimize the risks of investments of all project participants from the western side.

Almost all investment projects of this geographic zone are characterized by the common features:

• well developed from the technical and engineering sides,
• lack the marketing vision and financial analytics to be optimized,
• implementation of investment projects implies the legal participation of the local administrations, which play a significant role at all the project development stages, therefore it is necessary to establish proper relations with local administrations at the very beginning of the pre-investment phase of the project.

Regarding the investment projects owners/initiators from Eastern Europe and Central Asia, our participation to ensure the most effective attraction of global investment capital, located on the mature international markets of the direct project investments, includes:

• initial examination of a project (“initial project due diligence”):
• analysis of the project owner/initiator profile,
• analysis of the project structure and assets,
• analysis of market feasibility of the project.
• recommendations of strategic ways of the international promotion:
• clarification of the possible profile of the investor,
• clarification of the possible B2B technical partner profile,
• operational project management,
• identification of candidates for the financial or the B2B technical partnership,
• organization and support of negotiations between the project owner and the financial or the B2B technical partner,
• consulting support for the completion of contract documents.

Our knowledge of international investment markets and long-term experience allows us to find the best solutions for the development of your investment project. Our financial and managerial approaches are focused on the success of your project.

Regarding the companies from the developed economies of Western Europe, we take into account that every owner of a Western mid-market business, operating under limited resources (temporal, professional, financial), wants to make his international project realizable and effective. Taking this into account, our company’s experts, using their experience of working with projects in Eastern Europe, help a business owner/driver to develop an optimal foreign economic strategy, to offer practical solutions and operational means to achieve the goal set. Our experience shows that the implementation of the investment or the JV projects in the regions of Eastern Europe with the assured high profitability can be solely based on:

• critical selection of investment projects,
• preliminary analysis of investment assets of the project,
• conducting the on-site pre-investment project audit,
• establishing relations with the local administration,
• professional management outsourcing and project support until the completion of the pre-investment phase,
• controlling the project at all stages and jointly leading it to result that ensures the guaranteed rate of profitability and the return of investments to the international financial or the profile technical participant of the project.

Our knowledge of Eastern Europeana nd Central Asia markets and the long-term experience with investment projects from this area allow us to find the best solutions for entering these markets and developing your international business. Our financial and management approaches are focused on the success of your company.