When plum makes problems - Poor collecting of receivables from Russian companies

Although the export of plums and other fruits to Russian Federation has been pompously announced, the experiences of some companies in Serbia show that the deal is not that good because it is extremely difficult to collect the receivables.

The information that even the market chains in Serbia are paying better than the Russian companies shows how problematic that collecting is. Hypermarkets in our country pay their bills over hundred days after the delivery, while any payment by Russian partners is questionable.

Sabac-based Nikol, which has been exporting plums, apples, strawberries, cherries, raspberries and watermelons to Russia, Germany, Poland and Moldova for almost a decade, exported over 200 tons of fruits and vegetables in 2008, about 120 tons in 2009, and nothing at all in 2010. People in that company say that the export was stopped this year because they have demanded that 100% of the payment be made exclusively in advance.

- The companies from Russia appearing in our market, so-called "broker companies", are being opened and closed on monthly basis. When we agree on some delivery, fruits are shipped in refrigerator trucks directly to Moscow's green markets where they are sold. If the offer at the markets is diversified, problems arise with the transportation companies because trucks are kept longer than expected due to slow sale. When the time comes for collection of receivables, new problems emerge because the terms are changed from hour to hour. We usually don't get the agreed price and, since these companies are being closed almost on a daily basis, we cannot even sue them - says Radisav Nikolic, the Director Nikol.

He buys fruits from farmers and must pay them within few days, while the receivables are sometimes awaited for months.

He sees a solution in smaller packages of fruits and in the collaboration with Russian hypermarkets, but that leads to new problems, one of which is packaging.

- The equipment for packing goods costs between 50,000 and 100,000 euros, while neither state nor banks offer favorable loans - says our interlocutor.

Another solution is to keep fruits in cold storage plants or to dry them, but this whole situation has prevented the company from fulfilling its investment plants. They wanted to have a modern cold storage plant built and to wait for favorable prices of fruits. Instead of fruits, that investment project is now frozen.

- We have bought the land for construction of the cold storage plant and procured the equipment. The project has not been finished yet, but we would manage to build that facility with the help of a foreign investor or a favorable loan from the state - our interlocutor points out.

A cold storage plant worth about 200,000 euros could be built on the land of 0.5 ha, and co-investor's investment would depend on the share in the ownership of the facility.