In a period of persistent global uncertainty – marked by the decentralization of markets, war conflicts, trade barriers and economic slowdown in the EU, more and more Slovak exporters are looking for sales outside the traditional European markets. Although the majority of Slovak exports still go to Western European markets, companies are increasingly looking to more distant and less developed regions. According to Eximbanka’s research, there is a growing interest in Ukraine (19%), sub-Saharan Africa (16%) and the Western Balkans (15%). Companies are also attracted to Southeast Asia and Latin America, but they face a lack of contacts, financial security and unfamiliarity with the territories when expanding.
Exporting outside the EU: interest in non-traditional markets is growing
Eximbanka’s regular survey shows that the behaviour of Slovak companies and traditional exporters is gradually changing. Ukraine (19%) ranks among the priority markets in which Slovak companies are most interested – mainly due to its extensive renovation needs, especially in energy infrastructure, as well as in other strategic sectors. This trend follows the efforts of European countries to support Ukraine’s economic stability and development.*[1]
Other preferred regions include sub-Saharan African countries such as Kenya and Uganda, with a share of 16%, and the Western Balkans, namely Bosnia and Herzegovina and Serbia (15%). There was also increased interest in countries in South and Southeast Asia (13%) and Latin America (9%). These regions indicate that companies are increasingly prepared to enter markets that are geographically or culturally more distant, if they can recognize real business potential. Less attractive are the Near and Middle East regions, including North Africa (5%) and the Caucasus and Central Asia region (3%).
Barriers to expansion: finance, lack of information and uncertainty
Businesses face a number of challenges when trying to penetrate less traditional foreign markets. The most frequently cited obstacle (24% of respondents) is the difficulty in identifying customers and establishing local contacts. Economic diplomacy plays a particularly important role here, where local knowledge of the environment and the establishment of trusted contacts are among the most crucial in building diplomatic and economic relations.
Another factor is the need for additional financial resources and securing contractual relationships, identified by 22% of the companies surveyed. 13% of respondents reported a lack of information about the opportunities to penetrate the markets of developing countries and the needs of these countries. This is primarily due to a lack of relevant data on demand, sectoral opportunities, the regulatory environment or the local specifics of doing business.
Another challenge for entrepreneurs is the low awareness of available financing instruments, insurance and risk-sharing mechanisms such as guarantees and export insurance. This was identified as a barrier by 12% of firms, and is an important factor especially when operating in countries with higher levels of instability.
Firms also point to the high political, economic and security risks in developing countries. Eximbanka therefore offers risk management tools such as export insurance and guarantees to help reduce the risk of doing business in unstable markets.
The importance of partnerships in accessing developing country markets
As many as 72% of exporters report that they are able to enter developing country markets without the need to form trade partnerships. This approach points to their sufficient internal capacity and experience to enable them to operate effectively even in a challenging environment.
The remaining 21% consider collaboration necessary and use subcontracting, consortia, joint ventures or acquisitions. Partnerships help them to better manage risks, gain local knowledge and open up access to challenging markets often characterised by political or economic instability.
“Slovak exporters have the know-how and capacity to succeed outside traditional markets, but this requires, in addition to the quality of their supplies, sufficient readiness, security and reliable partners, especially in markets with a higher level of risk. Eximbanka is able to support development projects, reduce risks and strengthen the competitiveness of our companies, thanks to the use of EU instruments,” said Rastislav Podhorec, CEO of Eximbanka.
About the survey
The survey was carried out in stages in 2024 through an electronic questionnaire survey, in which 112 respondents, economic operators from different sectors, took part. In terms of company size, large companies as well as smaller and medium-sized enterprises from all over Slovakia were represented.
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About Eximbanka
As the only direct instrument of the state for export promotion, the Eximbanka is an important part of the chain responsible for promoting the country’s economic policy in the field of external economic relations. It offers a wide range of export-related financial products, especially credit insurance, financing and guarantees. As a state export credit agency, it enables Slovak exporters to enter into trade and investment relations where the commercial financial sector is less interested in taking on risk and therefore performs a complementary function.
* As a key instrument in the EU’s shared interest in Ukraine’s reconstruction, Eximbank will provide €77.2 million in financing through the “Ukraine Investment Framework” (UIF), backed by a 90% guarantee from the European Commission for companies. The second financial instrument is the European Investment Fund’s (EIF) Export Credit Pilot Programme under InvestEU, where Eximbank has obtained guarantees for an insurance portfolio worth €20 million, primarily for SMEs.