International trade: Acquest forms joint venture with Soviet panel; Acquest group 'is the quarterback of directing the two entities to get together.' (Acquest International)

International trade: Acquest forms joint venture with Soviet panel

Acquest group `is the quarterback of directing the two entities to get together'

Many Angeles-based companies are expressing a thirst to invest in the Soviet Union, and Acquest International aims to quench it. Acquest, a development and investment banking group in downtown Los Angeles, recently formed a joint venture with a Soviet economic committee to help facilitate American investment in small businesses in the Soviet Union, and dozens of local companies are lending an ear.

On April 30, a "Memorandum of Understanding" was signed between Acquest International and the Committee for Economic Reforms for the U.S.S.R. The agreement established two corporations -- Acquest Enterprises, whose sole purpose is to attract private U.S. investment for new small businesses in the U.S.S.R., and a Soviet counterpart soon to be formed.

"Acquest Enterprises is the quarterback of directing the two entities (U.S. and Soviet agriculture producers) to get together and take care of logistics," said David Moore, president of Western Growers Association, which represents Los Angeles-based companies such as J.B. Distributing Inc., Cal-Fruit Inc. and American Produce Inc.

Moore said members of its association are hoping to teach planting and harvesting techniques to the Soviets and perhaps receive a portion of Soviet crops or form some other cooperative venture in return.

"They want to feed their people, and maybe we can help and get a return on our investment," he said.

Caithness/N.C.F., a Long-Beach-based gas transmission pipe manufacturer, wants to supply its technology to the Soviet Union.

"You now have direct entry (with Acquest) instead of dealing with bureaucracies," said President Norm Fawley.

"We think that Acquest is an attractive way to explore opportunities," said Ellis Meredith, chairman of Food Executives International Foundation, which represents Los Angeles-based companies such as Lawry's Foods Inc.

"The Russians are very committed to Acquest," he said.

Indeed they appear to be. The Committee for Economic Reforms for the U.S.S.R. visited California from May 28 until June 6, and Chairman Valentin Vologhzin expressed his feelings about the joint venture at a Business Journal-sponsored luncheon.

"I hope that this venture is successful in helping American businesses to find their inroads in the Soviet market and to deal with different problems peculiar with the U.S.S.R. market," he said.

Vologhzin said the committee chose Acquest after interviewing numerous experts and businessmen from around the world, including those from West Germany, Japan and China.

"Our chemistries mixed. They came together," said Peter Guttridge, chairman of Acquest International. Acquest International is the only American company to form a joint venture with this particular committee, although many other American companies have already formed joint ventures in the U.S.S.R.

On May 28, an expanded Memorandum of Understanding was signed among the partners, providing for a $100 million American capital fund to combine with an already formed Soviet fund to finance small businesses in the U.S.S.R.

According to Andrzej Korbonski, a UCLA political science professor specializing in Soviet and Eastern European affairs, there is a great need for the Soviets to follow the western model of small businesses.

"They are extremely backward," he said. "Try to get a suit cleaned or a pair of shoes. It's a drag."

However, he recommends that Americans wait awhile before investing in the U.S.S.R.

"I think it's a highly risky business. Maybe in 10 years," Korbonski said.

"I think the resistance is still very very strong," he added.

However, American companies are anxious to venture into the new territory.

"We think the downstream possibilities are very exciting," Meredith said.

Andrew Olson, managing director of Team International Group and consultant to Acquest, also expressed the possible benefits to be reaped in the Soviet Union. The Soviets need for advanced computer technology is far greater there than in other countries, and a company he represents plans to market there, he said.

To overcome the inability to exchange Russian rubles for American dollars, American businesses are planning other alternatives.

Companies represented by Food Executives International Foundation plan to form joint ventures with Soviet companies, trade on the barter system or reinvest the money in the Soviet Union, Meredith said.