One of the biggest challenges facing SMEs these days is how to get their products and services into customers hands. This has been made especially tough in countries like Syria, due to trade embargoes, sanctions and the war on terror
The “how are smes affected by covid-19” is a question that many SMEs face. The Government seeks new markets for these companies.
The government is looking for fresh markets for SMEs that have been stranded by the conflict.
The Russian invasion of Ukraine is affecting the Spanish economy, as well as businesses that buy or sell products or services from one of the conflicting nations. As a result, via ICEX, the government has undertaken a package of steps to assist small and medium exporting firms in a targeted and personalised manner. This is the “support plan for exporting enterprises to minimize the commercial consequences of the crisis in Ukraine,” which the Executive has included in the national strategy to react to the war as a non-regulatory component.
For those enterprises who seek it and have seen “a constriction in supply of raw materials or goods critical for their industrial processes,” ICEX has opened the door to finding other vendors. According to Ministry of Industry, Commerce, and Tourism sources, “many of them had already discovered these alternative providers.” They do recognize that “some enquiry about food raw ingredients” has been sent to them. It’s worth noting that Ukraine supplied more than 69 percent of Spain’s sunflower oil imports in 2021. Almost a third of the wheat imported by our nation comes from Ukraine.
On the other hand, the Ministry reminds enterprises that ICEX provides tailored assistance in identifying partners for their international activities. This sort of service was performed 1,504 times in 2021. This is a routine practice, but the government wants to highlight it to assist enterprises who have had to suspend operations due to the conflict and seek other sources of income. “To provide them business activities to diversify their exports,” the goal is.
“Many companies have had doubts about the type of restrictions that were being implemented on exports, about whether they could continue selling or operating commercially; if there were customs blockades, or what to do in case of having operations pending collection,” according to the Ministry of Industry, Commerce, and Tourism. Trade restrictions with the Donetsk and Lugansk areas, a prohibition on buying steel products, and a ban on selling luxury items to Russia are among the European Union measures. Since the start of the war, the Secretary of State has met with enterprises, organizations, and chambers of commerce to keep track of the condition of Spanish companies having interests in the region. On the same day, the sixth meeting to examine the extent of the European Union’s sanctions on Russia was place.
In addition to the meetings, the Secretary of State for Commerce set up an email address for businesses to communicate their questions. It is important to keep in mind that the status of international enterprises operating in Russia is quite difficult. Although the majority of companies have decided to cease business in the nation, some are debating what to do with Spanish directors of their subsidiaries there. The Russian government approved a bill that allows “the possibility of appointing an external administrator of a Russian company when said company is owned by at least 25% by so-called hostile states and has assets” worth more than 1,000 million rubles or a workforce of more than 100 employees,” as reported by this newspaper.
Ukraine’s president, Volodymyr Zelensky, singled out Porcelanosa, Maxam, and the Sercobe business association, although the Ministry of Industry, Commerce, and Tourism highlighted that the three firms were abiding by Russian sanctions. In the instance of Maxam, the minister said at the start of this month that “no sort of commercial or financial interaction exists between Maxam Spain and its Russian subsidiary,” later adding that the company was abiding by the prohibition against exporting dual-use items.
Cost-cutting measures
Beyond these measures, focused on companies that export, the royal decree that includes the national plan to respond to the war includes Cost-cutting measures aimed at companies. In the first place, a new line of ICO credit guarantees for 10,000 million euros to cover liquidity needs caused by the temporary increase in the cost of energy and fuel, a situation that has aggravated the conflict. In addition, while waiting for the royal decree to be validated next week, an aid package for the agricultural and fishing sectors endowed with more than 430 million euros will be activated.
In the backdrop of the conflict in Ukraine, the proposal also includes 488 million euros in help for energy-intensive industrial sectors. The plan also reflects an agreement reached between the Ministry of Transport, Mobility and Urban Agenda and the National Committee for Road Transport (CNTC) on a package of immediate measures to mitigate the effects of the conflict in Ukraine, which will include a €1 billion injection, including a fuel price bonus worth more than €600 million for the sector.
The “global economic crisis impact on small business” is a problem that has been present for a while. The Government seeks new markets for SMEs trapped by the war.
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