Ukraine's technology sector can often find no better outsourcing option than the low-cost production center known as China.
Ukraine’s technology sector can often find no better outsourcing option than the low-cost production center known as China.
Oleksandr Nesterenko, the head of ARTKB, a Ukrainian hardware developer, says that China has “huge production platforms.” Production in European Union countries is much more expensive by comparison. Other options on the low-cost front are Taiwan, India, Philippines and Malaysia.
“Ukraine, unfortunately, does not appear on the list of the most interesting partners for Chinese producers – we are too poor,” Nesterenko says.
ARTKB has worked in partnership with dozens of producers in China. It provided help to Ukrainian hardware startup iblazr in finding a Chinese factory for their large-scale production of flash devices for smartphone cameras.
Nesterenko says China is used to doing things on a large scale: “A Chinese (manager) waits for the American with a deal worth several million dollars. He needs to load his plant with a mass-volume production.”
The relative wealth of the United States and EU make them more attractive to China.
“New products require new equipment. No worries – they borrow money, buy new equipment and dump out a new product on the market. This is an ongoing process,” Nesterenko says.
Chinese are used to enlarging their production capacities by purchasing new technologies and building new factories. Old assembly rooms are razed to the ground for new plants.
“Many Chinese usually don’t know what is located around the block from their apartment,” Nesterenko recalls. “It is demolished for something new to take its place. Yesterday there was a factory, now it’s a shopping center.”
In short, Nesterenko says that Ukraine’s technology industry has challenges in trying to become the focus of China’s attention.
Kyiv Post staff writer Bozhena Sheremeta can be reached at [email protected]. The Kyiv Post’s IT coverage is sponsored by AVentures Capital, Ciklum, FISON and SoftServe.
