European Alternatives

By Rayna Skolnik

Show managers who want to organize international events outside NorthAmerica often head for Europe. The exhibit industry is solidly establishedthere, and culture shock is minimal.

But massive political changes are making vast new markets more accessible,and show managers are broadening their views.

Following is a look at several areas that are becoming increasingly importantto exhibitors, including facts about each location's exposition facilities,industries and economy.

Russia and Ukraine
"Russia is a hot market," says Aizik Chernobrov, Executive Directorof Show Management and Services Inc. in Oak Brook, IL. "The economyis in very bad shape. They need products and technology."

But with the economy in such bad shape, is anyone buying? Chernobrovresponds: "A lot of businesses have been privatized. They have money,and they are spending it on services and equipment." He also notesthat it's becoming easier to do business in Russia because customs regulationsand visa requirements have been loosened.

The exposition industry itself is undergoing changes, according to PeterMcKenna, President of Trade Solutions in Washington, DC, a marketing andlogistics consultant to trade show organizers. "In the former SovietUnion, the exhibit industry is a marketing tool that has been used for hundredsof years," says McKenna. "But it is becoming much more competitivethan it used to be."

Whereas in the past there might have been a single government-organizedevent for a particular industry, now there could be several independentshows. For example, McKenna notes that in the last year, there were fourmajor shows for the oil and gas industry. "Oil and gas is a top priority,"he says, "because it will pay for everything else." Interestingly,the petrochemical shows are held in Moscow, rather than near oil fields,because Moscow is where the purchasing decisions are made. Venues for consumer-goodsexpositions, however, include St. Petersburg and Kiev in Ukraine.

There are two major exposition facilities in Moscow. The Moscow InternationalExhibition Center, known locally as VDNKh, is a complex of about a dozenstructures originally built as a museum. There is also the four-buildingKresnja Presnaya, a purpose-built exposition facility constructed in 1967.Chernobrov notes that although there is sometimes a shortage of labor inMoscow, the quality is high. "They're good craftsmen," he says.

Hotel ballrooms are also an option in Moscow. McKenna specifically mentionsthe Radisson. "It's a beautiful hotel with exhibit venues and ballrooms,"says McKenna. It's good for tabletop shows."

In St. Petersburg, the chief exposition facility is the Lenin SportsHall. Clearly not purpose-built, it is an arena the size of several basketballcourts that is ringed with fixed seating and dominated by a bust of Leninthat is perhaps 10 feet tall.

Kiev, in Ukraine, also lacks a traditional exhibit facility, says McKenna.Consequently, he used Boy Scout Hall, which was designed for sports andother scouting activities, yet for some reason has huge chandeliers. "Kievis over-the-top in decorations," McKenna says.

Facility limitations can be dealt with, but political instability isanother story. Chernobrov had to cancel a show scheduled for Moscow becauseof the coup during which the Russian Parliament was set afire. "Sincethen, we've tried not to invest too much," he says. "We did somesmall events."

Latvia
Chernobrov is more heavily involved in Latvia, where his experience hasbeen consistently positive. "We did a Baltic Trade & InvestmentExpo in Riga a year ago," he says. "Very high government officialswere involved. Attendance was good and exhibitors were pleased."

The key reason that Latvia works so well, Chernobrov explains, is thatthe Baltic countries were under Soviet rule for a shorter time -- they wereindependent until 1940 -- and thus are more westernized. In fact, he says,in Riga you'd almost think you were in a city in Germany.

Chernobrov's trade and investment conference, which included a smallexhibit, was held in a suburban resort that was formerly owned by the government."There are quite a few facilities like that in the Baltics," hesays. "And entertainment, nightlife and restaurants are almost up toU.S. standards." Moreover, hotel prices are reasonable. Moscow hotels,he says, try to "cash in" on the city's new popularity.

Small as it is, Latvia has two private trade show organizers. And thereis even an exposition industry publication, Busirzess with Latvia, whichis published by the Latvian Development Agency in Riga and available inEnglish.

The downside is that the three Baltic countries -- Latvia, Estonia andLithuania -- together have a population of perhaps 6 million while Moscowhas 7 million. Thus, buying power is limited.

South America
"In nearly every country in Latin America, there's increasing opennessto trade," says Paul Mackler, Chief Executive Officer of CMC in Norwalk,CT. Consequently, Mackler's exhibitors are eager to expand into those countries,and he is exploring opportunities that would enable them to do so. Alreadyestablished in Mexico, CMC has moved into Venezuela, Brazil, Chile and Colombia.Colombia, Venezuela and Mexico have signed a trade agreement similar toNAFTA, making those countries even more attractive as exposition venues.

As borders have opened, however, not all countries have geared up forthe increased volume of business. "The intent was to eliminate redtape and simplify doing business across the borders," says Mackler."But in some cases, unskilled customs agents are simply not preparedfor the traffic, and things are even more difficult than before."

In emerging markets, political instability and hyperinflation -- as muchas 200 percent annually -- are major hurdles, Mackler cautions. "Politicalunrest can affect exhibitors' mind-sets or even force the postponement ofa show. Fortunately, that hasn't happened to us," he says. "Ifyour show is driven by government purchasing, it's even more important tobe sensitive to what's going on politically."

Mackler urges show managers to enlist the aid of a lawyer in these countriesto deal with the legalities and nuances of tax issues, licenses and permits."In some cases, you expect the procedure to be very formal, but it'sinformal -- and vice versa," he says.

Vendors use different terminology, Mackler notes. Also, language differencescan make it difficult to employ what Americans consider standard negotiatingtechniques. "Understanding local customs and culture is critical,"he stresses. "Otherwise, it can be hard to tell if firm prices arethe custom or if people are taking advantage of you."

Show organizers often expedite the transition into another culture bychoosing a partner. CMC recently acquired Marketing International Corp.of Arlington, VA, which has extensive experience in Latin America. "Thetalent and knowledge of their people are vital -- even more important tous than the shows we acquired," says Mackler.

The largest exposition facility in South America is Anhembi, in Sao Paulo,Brazil, according to Bill Warnes, formerly President of Marketing InternationalCorp. and now Vice President, International, of CMC. The facility has 540,000gross square feet of exhibit space. Purposebuilt and with unlimited floorload, Anhembi is comparable to Frankfurt or Hannover, Warnes says. Otherfacilities in Sao Paulo include the just-opened Expo Center Norte, alsopurpose-built, and Ibirapuera.

In Rio de Janeiro, Brazil, there is a professionally built facility,Rio Centro, about an hour from the city center. In Santiago, Chile, themajor facility is FISA, a 21-building fairgrounds complex. None of the buildingsare purpose built, although they do have computerized registration installed.Venezuela's largest facility is Poliedro, in Caracas.

Each of these cities also has hotels with ballrooms suitable for exhibits.Warnes specifically mentions the Nacional, in Rio; Holiday Inn Crowne Plaza,in Santiago; and Tamanaco and the Caracas Hilton, both in Caracas.

Most of the other countries in South America have a fairgrounds on theoutskirts of town, says Warnes, but no purpose-built facilities.

The exposition industry in Latin America is well established. AFIDA --Asociacion de Ferias Internacionales de America -- which Mackler describesas being similar to the International Association for Exposition Management,is 25 years old. It was founded by individual countries' fair authorities,which both own the facilities and produce the events. Some of those facilitiesare now open to outside organizers, but arrangements must be worked outwith the individual fair authorities.

Japan
Trade shows as we know them have not been fully developed in Asia, saysKevin David, Commercial Director of Asia, for Blenheim Group PLC in London.In Japan, for example, "They were primarily public shows and were usedas vehicles to promote company names, not sell products. There were fewbusiness-to-business shows, and they were much smaller -- limited by thedistribution system."

Now, with the development of communication and the strength of foreigncurrencies against the dollar, that is changing. But for the moment, saysDavid, "There are no hard statistics and no market history."

Some 50 percent of shows in Japan are done in Tokyo. Show organizersmay have to flip a coin to choose between the two major facilities. NipponConvention Center, also known as Makuhari Messe, is modern and has up-to-dateequipment, but is 20 miles from the center of Tokyo -- a city where trafficis legendary. Tokyo International Trade Center, or Haruni InternationalFair Ground, is an older facility but is a mere two miles from downtown.Other important exposition centers in Japan include Chiba, Yokohama, Osaka,Kobe and Nagoya.

As you'd expect, producing shows in Japan is costly. But show managersand exhibitors save in a number of areas, according to David. "Youdon't have to worry about getting ripped off on labor charges," hesays. "There are no unions -- anyone can work in the halls. There'sno tipping; people work because they like to work." He also notes thatexhibit build-up time is very short: "The Japanese can build structures20- to 30-percent faster than workers in other countries."

Having lived in and out of Asia and Japan since 1981, David cautionsagainst trying to organize a show in Japan from an office in the West. "Youmust have a strong local base and an inter-Asian network," he advises.

South Africa
"Putting on exhibitions in South Africa is a piece of cake," saysPatrick Robinson, who is Reed Exhibition Companies' Director of EuropeanSales Development.

Robinson has been given responsibility for South Africa, and his commentmay surprise those Americans whose view of the entire continent is basedon news reports from individual areas. For example, The New York Timesrecently noted, "Rwanda, that tiny country ruptured by ethnic hatred,is 1,500 miles to the north and is as economically relevant to South Africaas Bosnia is to Boston. But to many Americans, it is all Africa."

Robinson sees it otherwise. "There is a skilled, highly educatedwork force," he says. "They have an extremely good infrastructureand communications. The country needs an update in some areas of technology,but it also has advanced manufacturing technology and great ideas to exchange.

Because of its faith in South Africa's potential, Reed recently enteredinto a joint venture with Times Media Limited, a major publisher in SouthAfrica and the country's largest exhibition organizer. At the new TML/Reedcomputer show in Johannesburg in May, "The standard of stand-fittingwas comparable to that at any western European show I've been to,"says Robinson. "There were double-decker stands, and everyone had portablephones." Reed is even considering expanding its Nepcon show into SouthAfrica.

Major exhibition facilities in South Africa are the National ExhibitionCenter, or NASREC, and Kyalami Exhibition Center, both in Johannesburg,as well as the Durban Exhibition Center, in Durban. An international conferenceand exhibition center is scheduled to open in Durban in 1997.

Exhibiting is taken seriously in South Africa. Exsa, the Exhibition Associationof South Africa, was established in 1980 to protect the interests of exhibitors.It has 73 members, 18 of them are show organizers and the others are suppliers.

The areas described above present special challenges for show managers,from 22-hour flights to political coups, from facilities that don't alwaysmeet U.S. standards to dramatically different ways of doing business. Butthey also offer the allure of international business growth that is so importantin today's global marketplace.

International Economic Policy Country Desk Officers: The U.S. Dept. ofCommerce source of information on trade potential for U.S. products in specificcountries. (202) 482-3022.

Trade Development Industry Officers: U.S. Dept. of Commerce specialistscan identify countries with potential for particular products, servicesor industries. (202) 482-1461.

M & A Calendar: A comprehensive directory, by date and location,of international expositions. Available from Exhibitions & ConventionsLtd., Mainzer Landstrasse 251,60326 Frankfurt am Main, Germany. 49-69-75-95-02.

Business Information Service for the Newly Independent States: A U.S.Dept. of Commerce source for those wishing to do business in the formerSoviet Union. (202) 482-4655.

Bridges: A Russian/American trade organization helping business expandinto Russia. (303) 220-5397.

Asociacion de Ferias Internacionales: Offers a calendar of events andnames of major show producers in Latin America. Contact the association'sPresident, Maximiliano Figueroa, at Feria Internacional de E1 Salvador.53-98-56-441.

Japan External Trade Organization: Office in New York has a calendarof shows in Japan and prepares an annual report on world trade. (212) 997-0400.

Japan National Tourist Organization: For both tourism and expositioninformation. Offices in New York (212) 757-5640 and other major cities.

South African Tourism Board: Extensive information on tourism and expositions.Offices in New York City (800) 822-5368 and Los Angeles (800) 782-9772.

Trade Show Bureau has a pamphlet, "Exhibiting Internationally,"written primarily for exhibitors, that is a valuable source list for showmanagers, as well. (303) 860-7626.