The Norwegian company BRGN is producing a shoe collection in Ukraine. Ukraine is close to the home market, and products are easy to import. Furthermore, Ukraine produces high-quality products, which makes the country attractive, but it also lacks the capacity seen in Asia and is more expensive.
The sales of the so-called Chelsea Boots, which are produced in Western Ukraine, have gone much better than expected for the Norweigan company BRGN. The first delivery of boots in August 2020 sold out quickly, and new shipments later that year and in 2021 did the same. That has made BRGN order another 15,000 pairs for next year.
“It was a coincidence that we came to Ukraine,” says Karine Trellevik Lunde, co-founder of BRGN, which is a Norwegian clothing company with a focus on sustainable clothing and with sales around the world in countries such as England.
“We were looking for suppliers in Europe to change things as we do much of our products in Asia, where we mainly produce in Taiwan, Vietnam, and China. They are historically known to be the best places to produce technical materials and outerwear, but Ukraine came up as an alternative,” says Lunde to Ukrainenu.
BRGN still produces far most of its products, including clothes, shoes, bags, and other accessories in Asia. At the moment, BRGN only cooperates with one factory near Lviv in Ukraine, but that could change in the future. Recently, Lunde was in Ukraine with the other co-founder Ros-Mari Tobiassen Gaundal to look at more potential factories.
“We met with two new companies while we were in Ukraine,” says Lunde, “One of them was a knitting factory, and we are still talking to them and starting the so-called sampling process, and that’s where you will see if it will work out of not.”
The benefits of Ukraine
Lunde says that they have been happy with their Asia partners but that it was essential to find alternatives. BRGN focuses on sustainability in their products, and it was, therefore, a priority to seek partners closer to the home market to reduce transportation. It would also give them the possibility to plan better and have fewer excess products or materials.
“And of course, customers like that it is being produced in Europe as well. So it is a plus for the customers, but it is also a plus for us. We have seen with Ukraine that they have gotten really, really good. Quality is great, and it lasts,” says Lunde.
“And when you have had such a great experience, you want more, of course.”
The Ukrainian company near Lviv, producing the Chelsea Boots for BRGN, is much smaller than the typical factories in Asia. BRGN was looking for companies that could make shoes waterproof by taking the seams of the garments and turning them inside.
“When I saw these high-quality leather boots at this company in Lviv, we started discussions with them and found out that they were very interested in making waterproof shoes, and they were very eager to start producing for customers abroad,” says Lunde.
“We started working with them around when the pandemic started, and it made it difficult, but we had a really good communication with them, and they even flew to Copenhagen to deliver the boot samples so that we could start selling quickly,” adds Lunde, who says that the shoes were much more comfortable than first expected.
She adds that the association agreement between Ukraine and the EU makes it easy to import products made in Ukraine compared to other places around the world.
Ukraine is still much smaller than Asia
According to the International Labour Organization, Asia is the largest manufacturer of clothes globally with a 32 percent share of the world markets for exports. Lunde says that it gives Asia an advantage over countries such as Ukraine.
“Asia has these huge quantities, which means that they can do anything. You send them the design, and they can then produce it. While in Europe, it is normal that you send the design and then a list of where the suppliers for all things are located. It gives the designers a lot of work, and that is not needed when working with Asian companies,” says Lunde.
“In Asia, the big companies have all the machines needed. But, unfortunately, it is not always the case in countries such as Ukraine, where we have met with factories that don’t have the right machines, such as lamination machines. Because they still have to buy their materials from Asia, it also still takes them quite a long time to produce,” says Lunde.
However, on her recent trip to Ukraine, she met with a large clothing company in Ukraine that also produces clothing for the military and police and, therefore, has large volumes and access to a lot of different machinery.
“They are growing and are almost at the stage where they have all these machines. So maybe, the picture will be changing as the market is growing and they can afford them, but there are still fewer of such companies than in Asia,” says Lunde.
Being big versus being small
A lot of the pros and cons of working either in Asia or Ukraine comes down to the size of the markets in the different countries. As Asia is the biggest producer of clothes globally, it is cheaper to have things produced there and easier to check quality.
“Ukraine is not the most trustworthy country, and our bank considers Ukraine a corrupt country. It means that we have to know our supplier much better and ask many more questions about, for example, ownership than we would do in Asia,” says Lunde.
For example, she says that almost all factories in Asia will have all the certificates you would need, while it might not always be the case in Ukraine. It doesn’t mean that the companies aren’t good, but it means more paperwork and checks of a Ukrainian company.
“You simply have to get help and look more into these factories in Ukraine. Of course, we always look at the factories we work with, but in Asia, you just ask if they have the certifications needed, such as the ISO, so you know things are checked, while with the small companies in Ukraine, you need to check things more in-depth yourself,” she says and adds that they have gotten help from the Norwegian Ukrainian Chamber of Commerce.
Different mentality with Ukrainians
Ukrainenu previously spoke to Lesia Ignatyk-Eriksen, the CEO of NordicUkraineInvest and helps Scandinavian companies find factories to cooperate with in Ukraine. She said that the culture in Ukraine is much different from in Scandinavia when it comes to keeping deadlines and understanding that quality is the top priority.
Lunde says that she hasn’t experienced any problems working with the company in Lviv and but she does see a difference in the culture between Ukrainians and Asians.
“I think that in Asia, it is in their culture that they do not say anything until you ask. So, if it becomes quiet, you might think as a Norweigian that it means that all is well. But after a while, you find out that it means the opposite, and you have to ask a lot of questions to find out what is wrong,” says Lunde and adds that it is different in Ukraine.
“I have not experienced this in Ukraine. They have been very upfront to let us know if something is wrong. For example, just last week, they told us that a new delivery of the material wasn’t of the best quality and that it would be better to wait for the next one in a week,” says Lunde, “And for me, as a Norweigian, the communication is the most important.”