FARGO - Agricultural equipment exporters to Ukraine say they are not counting on selling much in that country in 2014.
Howard Dahl, president and CEO of Amity Technology LLC, speaking recently to the Fargo-Moorhead Chesterson Society in Fargo, offered his own historical study of the region and explained the impacts on his companies. The society is named for G.K. Chesterson, an English writer.
“Probably anybody in Ukraine trying to sell farm machinery - I don’t think anybody’s going to make any money,” Dahl said. He hopes the International Monetary Fund, the U.S. and Europe can help stabilize the banks and the currency.
The 2013 marketing year had been an “extremely big year” for Amity in Russia and Ukraine because of a few projects, Dahl says.
“Our revenues were very, very strong last year,” he says. “This year, it’ll be almost nothing. We were already expecting a downturn” before the political problems.
Russian business is easier now because there is still money, and the banking sector is functioning there, Dahl said. But the Russian ruble has declined by 20 percent in the past five months, so the American equipment is 20 percent higher in price.
Titan Machinery Inc., based in Fargo, has been working in Ukraine since 2005. It initially focused on used machinery sales there, but since 2013, has increased its emphasis on new machinery. The company, which has 96 dealerships in the U.S., now has two dealerships in Ukraine. Titan also has dealerships in Romania, Bulgaria and Serbia.
“The Ukrainian political-economic crisis is creating uncertainty,” said Olga Hall, Titan Director of International Division. “It is impacting the currency exchange, interest rates, liquidity and sales activity.”
Hall said the company is taking countermoves, including gaining better control of equipment inventory management, securing lower interest rates and supporting customers who continue to move forward with their spring planting.
Brandt Holdings of Fargo sells used equipment in Ukraine. Stacy Anthony, Brandt Holdings international sales manager, said the company, which owns numerous farm equipment stores in a five-state area, has grown to the Ukraine market, selling to dealers or directly to farms.
Brandt has operated in Ukraine since 2006 and has sold 400 to 500 machines there. Anthony thinks activity will be cut by 70 percent or more.
“It could come to a complete stop before the year is over.” He says Ukraine is an important outlet, but the company has always planned to survive without it. Brandt has dealt on a cash basis, so the trouble is
Anthony praised U.S. Sen. John Hoeven, R-N.D., and others who have seen the turmoil firsthand. He says “great relationships have been forged” by numerous North Dakota companies, but many transactions will be “crippled or paralyzed” because of the unrest.
Dahl said a strong western Ukraine farm with a good debt-equity ratio and audited statements had ordered 30 field cultivators - $2 million - from Amity, but couldn’t secure the financing.
The Amity equipment generally goes in through the Odessa port in the Black Sea. The company has shipped little or nothing to Crimea, which has been taken over by Russia.
Dahl travels to Ukraine about four times a year. He was there in November, February and goes again this month.
In Siberia, he’ll receive a “Hero of Russia” medal for helping start a factory for seeding equipment 20 years ago.
