The wheels of success: Japanese expertise transforms Ukrainian tyre business thanks to EU4Business

Ukraine
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With funding from the European Union under its EU4Business initiative, the European Bank for Reconstruction and Development (EBRD) has helped Vinnik, a tyre distributor from Ukraine, to define its long-term business plan, improve production efficiencies and almost double profits.

Vinnik is an independent tyre distributor specialising in truck tyres, wheels and aftersales through a nationwide network of branches. Through its EU4Business Advice for Small Businesses (ASB) programme, the EBRD helped the company to find a new way forward to increase sales, reduce working capital costs and become more customer focused. By the end of the project, Vinnik had increased sales by 24% and earnings by 81%.

Entrepreneur Andrey Vinnik founded his company in 2004 with a vision of building a leading national truck tyre distribution company. Initially this was for the supply of new tyres, but the firm later diversified to include the reconditioning of tyres. Following strong growth, the company was looking for assistance to become better equipped to create and execute its future development, which is where the EBRD stepped in.

Business development consultant

Through its Advice for Small Businesses Programme, the EBRD connected Vinnik with a seasoned business development consultant from Japan with more than 30 years of experience working with automotive parts distribution and after-sales services, mainly as part of car manufacturer Honda’s after sales service in both Europe and Asia.

The adviser, Makoto Tsuda, worked closely with the company’s management team, with several key project objectives:

  • Developing a Strategic Vision
  • Preparing a long term business plan
  • Implementing a Total Quality Management (TQM) measurement system
  • Identifying production efficiencies
  • Re-aligning the organisational structure

As a result, the company has developed a new strategic vision with a simplified organisation. A new vision and mission statement has been drafted and shared with the company’s employees and a new three-year Business Plan is in place.

Moreover, as part of the move towards Total Quality Management, Vinnik have changed their procedures to be more customer-focused and have introduced a performance improvement culture, increasing staff motivation and effectiveness.

Despite the relatively difficult business operating environment through the duration of the project, the company has increased sales turnover by a quarter, reduced working capital by almost half and almost doubled profits. They have also created more than 60 new jobs.

EBRD Advice for Small Businesses

The EBRD Advice for Small Businesses programme, funded in the Eastern Partnership countries by the EU under its EU4Business initiative, aims to promote good management in the SME sector by providing assistance to individual enterprises, helping them to grow their businesses. It supports SMEs to make structural changes and develop new business skills, helping them to thrive and compete in market economies. The programme also enables SMEs to access local consulting services on a cost-sharing basis by providing grants of up to €10,000.

 

Find out more

EBRD advice for small businesses in Ukraine