EBRD and donors enhance potential of a leading furniture wholesaler Atlant
Strengthening the private sector is a key area for development in Tajikistan. A challenging business environment, hampered by excessive red tape and the risks of corruption, prevents companies with real potential from growing and the country from developing a more diverse economy.
But things are looking up in this relatively small economy. According to World Bank data, reforms are improving the ease of doing business, with real progress for entrepreneurs who want to launch start-ups, obtain construction permits and file electronic tax payments.
Access to finance is one of the persistent problems faced by businesses. The EBRD helps to tackle this by coupling finance with expert advice to help them seize opportunities and capitalise on the adoption of higher business standards.
A success story comes from Atlant, a wholesale and retail trader of furniture and home appliances established in Tajikistan in 2008.
The company operates nine retail stores and a warehouse with total storage area of 5.5 km2, all located in the capital Dushanbe. It employs over 100 people and is one of the leading furniture wholesalers in Tajikistan.
Atlant’s increasing business volume meant that in 2017 the company decided to expand by investing in a new showroom and furniture manufacturing workshop. Working with the EBRD, Atlant was able to conceive an ambitious and comprehensive plan for its expansion.
With a relatively small loan of US$ 1.5 million, the company financed the construction of a new showroom and a workshop as well as the acquisition of furniture manufacturing equipment.
The expansion meant that Atlant had to rethink and optimise its business processes. Thanks to several advisory projects, Atlant improved some important aspects of its operations introducing best practices in management and organisational structure, annual planning and budgeting, marketing and operational efficiency, thanks to the support of donors including the USA, the Early Transition Countries Fund* and the Small Business Impact Fund**.
For example, Atlant adopted better accounting standards introducing financial statements consistent with the International Financial Reporting Standards (IFRS) and started to analyse and plan its costs. The company also introduced an automated system to manage its inventory. The new software halved the time spent on generating reports for suppliers.
Considerable effort was put into marketing. With a new specialist as part of the team, the company went through a rebranding exercise, which culminated in the adoption of a new name for their stores: Avrang.
The combination of finance and business advice prepared the business for the successful opening of its new Avrang shopping centre covering over 5000 m2. The launch event, which included a lottery to win small home appliances and a LEDT TV as main prize, attracted hundreds of people in the capital.
Among them was Tahmina Farmonova, who had a very positive impression: “I like very much the shopping center Avrang. All is in one place, very convenient, anyone can find what they like, the service is excellent, the staff friendly and the administration in general is incredible. All at European level,” she said.
Avrang’s owner and director, Sipehr Abduev, is very pleased with developments. “Thanks to EBRD support, we have been able to open the store sooner than planned, increase volumes, automate the accounting system, connect all stores with the head office and the warehouse,” he said.
“The project with international advisers significantly helped to develop our business, the loan helped to increase the volume of purchasing and attract new partners”.
These achievements would not have been possible without donor support. The Small Business Impact Fund will be instrumental in implementing the next step which will focus on the expansion of the furniture line.
“We want to help create comfort for people in their homes! And we are firmly moving towards our goal,” added Mr Abduev thinking of the future.
* The donors to the Early Transition Countries Fund are: Canada, Finland, Germany, Ireland, Japan, Korea, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, Taipei China and the United Kingdom.
**The donors to the Small Business Impact Fund are: Italy, Japan, Korea, Luxembourg, Sweden, Switzerland, Taipei China and the USA.