EBRD and EU help Arassa Rysgal improve product quality and operations
Arassa Rysgal, a leading manufacturer of light footwear in Turkmenistan, produces enough flip-flops to satisfy the demand of practically every citizen. With finance and business advice from the EBRD, funded by the European Union (EU), the company diversified its operations and became the first in the country to launch production of trainers and wellington boots.
Ayhan Rejepova, the owner, started the business back in 1997, trading dried fruit and nuts. It was an instant hit with a daily volume of 1.5 tonnes of goods, so Ms Rejepova started pondering diversification and the establishment of a production line.
Living in the countryside, she knew that flip-flops were the footwear of choice among the Turkmen people. The weather in the region is dry and mostly very hot, so light footwear is all one needs to feel comfortable.
It was not until 2015 when she launched the first production of flip-flops under the brand name ‘Gerchek’ (‘Dandy’). The idea was to offer a reasonably priced alternative to the imported flip-flops dominating the domestic market at the time. Initially, the company used just one piece of machinery and hired 20 employees, but Ms Rejepova quickly managed to expand her business to become a fully-fledged production facility. Currently, she is employing 400 staff, 65 per cent of whom were women.
“The first months were the most difficult. Although we had good experience in trade, we did not know how to manage production. Another challenge was to overcome the distrust of domestic product. Those days, ‘imported’ meant ‘quality’ for customers. It took a whole season for us to change people’s mindset,” she recalls.
Today, Gerchek footwear is very popular. The company’s products are distributed in all five regions of Turkmenistan and are also exported to neighbouring countries. The annual production is growing and has reached 6 million pairs of flip-flops, more than 40,000 wellington boots and 80,000 trainers. Even last year, when many businesses were hit hard by the coronavirus pandemic, the company managed to keep up the volume of operations and produced an even bigger output than last year.
The first time Ms Rejepova turned to the EBRD was when seeking finance for new workshops, warehouses and equipment to diversify the product range. Thanks to the EBRD’s business advisory programme, funded by the EU, the company teamed up with an experienced international adviser who helped improve product quality, organisational structure and marketing and sales operations. The company also developed a business plan for its ambitious investment project and improved financial management system.
“The advisers helped us tremendously. We can see a huge difference between what we had before and after the advisory projects. We would never have achieved such success on our own,” says Ms Rejepova.
As a result, the company was able to secure US$ 2 million in financing from the EBRD to invest in the construction of workshops and the purchase of new equipment.
Ms Rejepova is pleased with her company’s success but does not intend to stop there. She has ambitious plans for the future: “With a new investment project we would be able to implement the full cycle of production without dependence on imported raw materials, provide more affordable footwear and create 200 further jobs for women.”