As the Iron Curtain has crumbled over the past several months, local businessmen James Harrell and Paul Armstrong have been devouring all the news they can about the fast-paced changes sweeping the Soviet Union and the rest of Eastern Europe.
During the past year, both Harrell and Armstrong have formed separate companies with the idea of tapping the potential created by the extraordinary political and economic changes that have taken place in Eastern Europe.
The two fledgling companies have yet to strike up any major business deals in Eastern Europe. But both men believe they are getting in on the ground floor of a market that could offer significant potential during this decade.
Harrell, 37, is one of three local founders of Intertrade, an international marketing and management firm in Laguna Niguel. The other founders are Kim Martello and Robert Ludovise.
Until now, Intertrade's primary activity has been in the area of commodities trading. The company organized a $2.1-million transaction that involved shipping manure from the Soviet Union to Brazil.
Intertrade currently is involved in negotiating several joint venture deals in Poland, none of which has been completed. Among the projects in the works are deals to establish a small medical clinic at a Polish hospital in cooperation with the Polish government, and another that involves setting up a biomedical research center. The firm also hopes to complete a nonprofit venture to donate a large number of typewriters to Romania.
"Our feeling is that there are plenty of opportunities for companies right in our own back yard (in Orange County) to deal with Eastern Europe," Harrell said.
A native of Huntington Beach, Harrell also runs a one-man consulting company specializing in cross-cultural management. Harrell is a former executive with World Vision who has set up relief projects in Cambodia for the Monrovia, Calif.-based international development agency. He formerly worked for the Defense Department as a Flemish interpreter in Belgium.
Armstrong, 31, is a founder of RHA Group, a business services firm specializing in the Soviet Union. In October, RHA opened an office in Moscow headed by Andrei Lefebvre, a Moscow native who formerly headed a public relations and marketing company in Long Beach.
Before founding RHA in July, Armstrong helped organize a recent effort by Irvine-based American PC to sell personal computers to the Soviet Union. He left the company before the deal was announced in September by Phoenix Group International, an Irvine firm that owns a majority interest in American PC.
RHA's first project in the Soviet Union involves organizing weeklong, industry-specific tours for Western business people.
In a recent interview with Times staff writer David Olmos, Harrell and Armstrong discussed the topic of doing business in the Soviet Union and Eastern Europe and offered some suggestions for companies interested in getting involved in those countries.
Q. After last year's events in Eastern Europe, many people are talking about doing business there these days. How do you view the opportunities for doing business over there?
A. Harrell: I think that we make the common mistake in this country when we lump lots of nations together. We do it when we refer to Asia. It's similar to referring to someone as Caucasian. Eastern Europe is a mix of lots of different economies. They have been under alliance economically as the Warsaw Pact. But that started dissolving eight to 10 years ago. In some nations, there is tremendous opportunity immediately. In other nations, the opportunity is there but the infrastructure for developing a trading base isn't in place. Ask yourself what it would be like if for most of your life you had not been allowed to trade freely--to apply your energy to making a profit for yourself, your company or your family--and then suddenly the restrictions were removed and you could trade freely. That's the potential for Eastern Europe.
Q. We hear a lot about how difficult it is for Western business people to do business in the Soviet Union and Eastern Europe from an everyday standpoint. How difficult is it?
