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The Cutting Edge^™ July 2005

International Business Development

SABIT, a US Department of Commerce export development program, awards grants annually to U.S. companies and organizations that support training of Eurasian managers, to include representatives. This program, which WMMA members have taken advantage of in the past, can be an economical way to gain solid footing into the growing markets of Russia and neighboring Eurasia nations.

The objectives of SABIT program is to build partnerships and provide technical assistance by training Eurasian business leaders in U.S. business practices. These training programs directly support Eurasian economic and civil society development by encouraging market-based reforms. From the WMMA member perspective the program generates valuable export opportunities.

SABIT manages two training programs that turn partnerships into results:

GRANT PROGRAM - www.mac.doc.gov/sabit/grant_program.html
SABIT offers competitive grants to cover a share of the costs of hosting Eurasian managers from 6 weeks to 6 months of hands-on, professional training in the U.S. In discussing the program parameters with SABIT officials I learned the program can be used to train one or more existing and potential dealers from one or more of the Eurasian qualified countries and Russia. Additionally, grant funds can be shared by more than one WMMA member. As an example a program could be funded to train dealers from Russia, Ukraine and Belarus in the operation and application of several WMMA members' products over the course of 6 weeks to 6 months. Members that are interested in expanding sales to Russia and Eurasia may want to start discussing this opportunity within their organizations and with member colleagues.

Participating U.S. organizations may either nominate a candidate from their existing Eurasian business contacts, or work with SABIT to recruit and select a qualified candidate or candidates. Organizations can apply to host trainees from Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. Structured as reimbursable awards, SABIT grants cover only the following three items:

• Round-trip airfare from trainee's home country to the training site
• $34 per diem to cover trainee's living expenses
• Up to $750 per month for housing costs

The host organization or organizations is/are responsible for any additional costs associated with the training (overhead costs, domestic travel, etc.)

GROUP PROGRAM - www.mac.doc.gov/sabit/group_program.html
The Group Program encourages U.S. exports and investment in Eurasia by bringing delegations of managers and technical experts to the United States for four weeks of industry-specific training at sites across the country. The training sessions also facilitate technical assistance and knowledge transfer, thereby promoting economic and civil society development in Eurasia.

SABIT recently funded a Timber and Wood Processing Program to train 18 Russian managers. These delegates came from private companies in Russia outside the cities of Moscow and St. Petersburg. From June 4-July 2 the program introduced participants to the procedures and equipment used for timber harvesting and management and wood processing in the United States. As part of the training, the group traveled to select regions and cities across the country to meet with industry experts and U.S companies, including member company Wood-Mizer. The group also attended the 28th biennial Forest Products Machinery & Equipment Exposition (EXPO 2005) June 23-25 at Atlanta's Georgia World Congress Center.

A detailed professional overview of each member of this delegation and what they are interested in learning during their SABIT experience can be found at www.mac.doc.gov/sabit/group_program/technology/timber/session_bios.pdf

I had the opportunity of meeting with the group in June to discuss their needs, the WMMA, the breadth and depth or our industry and our members' interest in expanding sales to Russia. Over the two hour meeting they provided the following insights:

Most were in the sawmill segment and looking to expand existing operations as well as branch out into mouldings, cut stock and furniture components;
• Their traditional markets are in western Europe but noted the domestic market is expanding rapidly;
• Infrastructure (transport, financing and distribution) has improved greatly over the past 5 years;
• Major European suppliers have set up extensive distribution networks in major commercial regions of the country;
• Most European suppliers visit the country at least twice a year;
• Only a few US suppliers are known;
• Service support is the major concern for purchasing US equipment without local representation;
• Payment terms such as letters of credit or payment prior to shipment are common and do not cause concerns;
• Despite knowing little about US suppliers, Russians are wiling to look at new sources of supply to support their growth.

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