Volga Trader has been doing business in Russia since 1994. The initial business was a part time effort run alongside an innovation consultancy, Customer Refocus, also run by our founder. The first direction was to export semiconductor lasers made by the Russian company Inject in Saratov to the rest of the world. We obtained a large share of a small market with long product development cycles.
This continued until 2005. By this time the Dotcom bust meant that the innovation business was not particularly strong. However, helped by high oil prices Russia was becoming a significant importer of foreign goods. Volga Trader had built up a large database of Russian contacts. It was decided to use them to find buyers for foreign goods. A Russian subsidiary was set up with an office and employees in Saratov where our founder was already well known. Shortly afterwards we were appointed the in-market consultants for Russia for the Welsh Development Agency. This business continues with the Welsh Government.
At the end of 2014, the oil price collapsed. Russia was no longer able to pay for imports in abundance. In 2015, various sanctions in both directions were imposed by the EU, the USA and Russia in retaliation for Russian interference in Ukraine the previous year. This was a further blow to the import business, particularly from those countries directly involved.
However, the fall in the value of the rouble has also presented opportunities. Russian assets have become greatly undervalued. Russian farms and factories now represent great value. Their output is not vulnerable to replacement by imports. Revenues are more certain.
Investment in Russia is now a major opportunity. Thus we have realigned the business to include business broking. Private business in Russia is approaching its 30th birthday. Many of our Russian contacts are now ready to sell their businesses and retire. We can generally find suitable acquisition partners for outside investors.