Making ACP countries a better place for doing business
The French Caribbean Outermost Regions (FCORs) as a Gateway to Europe By Noel Watson Ph.D. Consultant, Enabling Environments Ltd April 15-16, 2015
This document has been produced with the financial assistance of the European Union. The views expressed herein can in no way be taken to reflect the official opinion of the European Union nor of the ACP Secretariat
Objectives
To identify Opportunities for trade with the FCORs Preparatory activities and critical success factors for CARIFORUM exporters How the FCORs’ favourable relationship with France can be used as a potential gateway to the EU market
Background
In 2009-10
– A-Z Information conducted a study on Opportunities for Doing Business between CARIFORUM States and the FCORs
– Funded by EU
In 2012-13
– A-Z Information conducted Missions to FCORs with TT exporters – Funded by CART Fund
Whither the FCORs: Caribbean or Europe?
CARIFORUM and the FCORs
Nearly 0.5 Billion people 28 Countries
What Do CARIFORUM and FCORs have in Common?
Geography
Demography
» » » »
Caribbean – same region, marine resources Typically small (island) states Weather/climate Beautiful beaches
» Relatively small populations
Heritage/History/Sport
Vulnerability
» African, European, Indian heritage » World famous sports persons and artistes » Natural disasters » Limited exports products » High import dependence
What are Some of Main Differences Between FCORs and CARICOM
Economic
» Per capita income » Wage rates » Expertise and technology
Political system/structure
» FCORs: Department of France » CARIFORUM: Independent • (with British, Dutch, French, Spanish systems and language)
Relationship with EU
» Part of EU versus Independent but linked through EPA Language
» Interpreter might be needed Culture
» Music » French Influence
Socioeconomic Variable
Martinique
GDP per capita, current 24, 120 prices (US Dollar) Inflation, average 2.7 consumer prices (Index, 2000=100) 2007-2008 Population 395,953 HDI Rating (French Rating) Very High Distance FDF from Miami 1464 Miles Refined oil, Main Exports agro-products (banana, rum), services Main Industries
Minimum wage rate :
21,703
French Guiana 15,955
2.2
3.3
405,139 Very High 1377
205 ,954 Very High 3768
Guadeloupe
Agro-products (sugarcane, banana), light industry, transshipments Agro-products, Agro-products, construction, oil construction, refinery, services (trade, services (trade, tourism, tourism, public) public)
Gold, fishing (shrimps), rice, wood.
Agroproducts, construction, services, aerospace industries 9.61€ per hour 9.61€ per hour 9.61€ per hour >JMD 2 million/year
VALUE OF COUNTRY/REGION TOTAL EXPORTS BY SELECTED SITC SECTIONS WITH FCOR: 20112013 (source: http://www.caricomstats.info/tradsysonline) COUNTRY/REGION
2011
2012
2013
US$
US$
US$
CARICOM
176,203,443
234,348,808
204,543,222
MDCs Barbados Guyana Jamaica Suriname Trinidad & Tobago
170,884,630 1,496,766 1,931,471 5,846,997 161,609,396
229,282,151 1,599,446 1,933,405 5,239,159 220,510,141
199,053,703 1,659,873 955,763 5,736,787 190,701,280
LDCs Belize
5,318,813 7,892
5,066,658 3,228
5,489,520 2,048
OECS Antigua & Barbuda Dominica Grenada Montserrat St. Kitts & Nevis St. Lucia St. Vincent & the Grenadines
5,310,921 868,290 2,475,092 262,894 577,279 1,125,003 2,363
5,063,430 983,954 3,243,583 275,180 301,076 259,118 519
5,487,472 798,235 3,269,051 355,496 94,607 968,200 1,883
Opportunities: Goods Exports From CARIFORUM to FCORs VALUE OF CARICOM'S TOTAL EXPORTS BY SELECTED SITC SECTIONS WITH FCOR: 2011-2013 (source: source: http://www.caricomstats.info/tradsysonline) 2011 US$
2012 US$
2013 US$
ALL SECTIONS FOOD AND LIVE ANIMALS BEVERAGES AND TOBACCO CRUDE MATERIALS INEDIBLE, EXCEPT FUELS MINERAL FUELS, LUBRICANTS AND RELATED MATERIALS ANIMAL AND VEGETABLE OILS, FATS AND WAXES
176,203,443 9,913,722 5,074,212 2,801,231 130,963,400
234,348,808 9,224,558 6,093,398 1,796,177 83,612,529
204,543,222 8,593,590 4,952,190 1,849,127 162,393,923
65
537
370
CHEMICALS AND RELATED PRODUCTS, N.E.S. MANUFACTURED GOODS CLASSIFIED CHIEFLY BY MATERIAL MACHINERY AND TRANSPORT EQUIPMENT MISCELLANEOUS MANUFACTURED ARTICLES COMMODITIES AND TRANSACTIONS NOT CLASSIFIED ELSEWHERE
12,685,324 12,353,571
36,906,626 94,815,419
7,424,998 17,148,268
1,125,448 1,280,109 6,361
569,371 1,298,447 31,747
1,085,487 1,092,323 2,945
Commodity Description
Opportunities in Certain Products Based on exporTT Missions
Based on Mission findings there are distinct possibilities for a number of the targeted items including: – Cosmetics – Detergents Include Senior Managers – Electrical products on Trade Missions for the – Furniture products simple reason that they – Safety products can make decisions on – Confectionery the spot which may be – Aggregate products pivotal in striking deals – Packaging material – Labels – Garbage bags
Results of THREE Trade Missions to FCORs Arranged by exporTT
Exploratory Market Penetration Mission Mission Mission III # Companies
Meetings Leads Confirmed Orders
Potential Orders Days per Territory
17 150 75 1 1
7 64 6 1
10 131 85 6 5
2
2
2
Source: exporTT , 2015
T&T Companies Exporting to FCORs Source: TT CSO 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.
ABRAHAM SHIPPING CO LTD AG'S GARMENTS ANGOSTURA BITTERS LTD ASSOC BRANDS INDUSTRIES LTD C G A LIMITED CARIBBEAN BOTTLERS T & T LTD CARIBBEAN DEVEL CO LTD CARIBBEAN ISPAT LTD CHAI'S EXOTICS COLLEGE HEALTH FOODS F A AGOSTINI ESTATES LTD FORMULA I I I MARINE LIMITED GENERAL PACKAGING LIMITED HUMMINGBIRD GRAINS LTD INDUSTRIAL GASES LTD K C CONFECTIONERY LTD KHAN'S ALUMINIUM PRODUCTS LTD
18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35.
MARITIME PRESERVATION LIMITED MEILING MESSER TRINIDAD & TOBAGO LTD NAT FLOUR MILLS LTD PCS NITROGEN TRINIDAD LIMITED PEPSI-COLA TRINIDAD BOTTLING PETROLEUM COMPANY OF T & T LTD PHOENIX PARK GAS PROCESSORS PIARCO AIR SERVICES LTD RADICAL DESIGNS LIMITED ROTOPLASTICS SOLOMON YUFE & CO LTD STUART BROTHERS (W I) LTD TASTE MAKER MANUF CO LTD TDAD AGGREGATE PRODUCTS LTD THE TEXTILE KING TRINIDAD & TOBAGO TIRES LIMITED WEST INDIAN TOBACCO CO LTD
CARIFORUM-FCORs: Very Specific Current Example
Exchange of emails
ď Ž On Apr 8, 2015, at 6:08 PM, Noel Watson <noelwatson@azinfojam.com> wrote: Hi Ronald How are you? Am I correct in saying that I saw your products on the supermarket shelves on Martinique and Guadeloupe? Are you also in French Guiana? Are you in any of the European markets? Regards Noel Watson CEO, A-Z Information Jamaica Limited ď Ž On 8 Apr 2015 10:41 pm, "Ronald Ramjattan" <rramjattan@baronfoodsltd.com> wrote: Hi Noel We have been exporting to Martinique, Guadeloupe, French St Marten, France, UK, and Germany for the longest while. I am travelling to Guadeloupe tomorrow to sign off on an agreement paving the way for a Guadeloupe Company to handle the distribution for French Guiana, Guadeloupe and France . Regards, Ronald Ramjattan, Chief Executive Officer, Baron Foods Ltd.
Other Companies Exporting to the FCORs
Jamaica – Rainforest Seafoods – New Port Fish and Meats – J. Wray and Nephew Dominica
– Bello Products (Parry W. Bellot & Co. Ltd.) – Preserves, spices, coffee, chocolate and food condiment sauces
Opportunities: Services Exports From CARIFORUM to FCORs
Tour Operator & Tour Guide Services Hotel & Restaurant Services Educational Services: Technical & Vocational Services
ICT Cultural Industries Energy Distribution Services
Critical Success Factors: Export Readiness Important ingredients • Company Profile • Labels • Certification • Production Plant
An export readiness assessment should be conducted as part of the company’s export planning process. This assessment when properly designed and conducted can provide insights on the following attributes: – Significant management time and strong management commitment to export development – Strength in the domestic market – The resources to succeed – Business and export planning in place
Critical Success Factors Business Intelligence
Examine market data – Sometimes consolidated with overall French data – Examine previous studies by Caribbean Export, exporTT, Jamaica Manufacturers Association, etc.
Contact Chambers of Commerce
Critical Success Factors Strategic Alliances Manufacturing under licence
Joint Ventures can yield benefits from technology transfer from France / FCORs and leverage the comparative advantages of both regions Producers may also leverage FCOR expertise in meeting standards and in introducing innovations through the research support from the Metropolis.
If products are in demand, the potential market can eventually extend to mainland France and the wider EU.
Strategic Alliances
ď Ž Penetrate market by working with distributors that are already in the FCORs market and in mainland France FCOR importers have to pay return freight to the EU given the lack of backhaul. We need to have TT/CARIFORUM products going back in empty containers (win â&#x20AC;&#x201C; win)
Critical Success Factors:
Strategic Alliances
Importance of the Chambers of Commerce The Chambers of Commerce are important entities in regulation of businesses and commerce. All Businesses must be registered with Chamber of Commerce. Until recently, Chamber of Commerce formerly managed ports.
Importance of Agent on the Ground
Having an Agent in FCOR can be a major part of the export company’s success. One Agent may be able to operate effectively in all FCOR countries.
Critical Success Factors: Trade Missions
ď Ž Market visit is very important: Our visits facilitated the assessment of the market, standards and competition that lies therein. ď Ž Show and Retain Interest: Potential Buyers in the FCOR are impressed with the seriousness demonstrated through the trade missions as well as with the aggressive follow- up of interests with telephone calls and emails and the fact that the decision makers are able to visit in person.
Needs Identified in Regional Focus Groups
Need for a Facilitation Office in the FCOR which just facilitates trade opportunities
– Could Caribbean Export see this as an opportunity?? A Central information portal should be available where potential exporters will go for general information
– Caribbean Export and the FCOR Chambers?? Supporting Trade Missions
– This is happening • TT • JMA • SVG
Important Factors to Note: FCORs: Cultural Idiosyncracies
Slow or non-response to emails does not necessarily mean “lack of interest” The territories are small and interconnected hence there is a discussion and cross referencing before coming to a conclusion Exporters should pay attention to the terms of payment as oftentimes very long periods are required Exclusive distribution of the product is required by some buyers given the small size of the market.
Potential Challenges and Constraints
Potential Barriers to Trade – – – – –
Language Transport costs Knowledge of French regulations, culture and bureaucracy Lack of representation or distributors on the ground High duties when entering the FCORs • Octroi de Mer
– French culture and perceptions that French products are the best – Visa requirements – especially for some CARICOM countries – The need for market intelligence – data not always easy to obtain
FCORs As Gateway to Europe
FCORs provides an excellent regional testing ground for products before attempting to penetrate larger continental French/EU markets – Once goods have been tested in the FCORs, CARIFORUM exporters can ship directly to France/EU
Relationships with FCOR business persons that ship goods to France can lead to CARIFORUM products entering France – Take advantage of “backhaul”
Cultural services providers can form strategic alliances that lead to performances in France/EU and CARIFORUM Cultural events in the FCORs can be packaged with those of CARIFORUM neighbours – Tourists from France/EU can then be enticed with multi-destination vacations
Model for Doing Business with FCORs As a Gateway to Europe Opportunity
Critical Success Factors
Barriers
Commodities
•Market research
•Language
•Wide range of goods
•Joint ventures and partnerships
•Transport
•Mineral products
Services •Tourism, etc.
•Few distributors on ground
•FCOR expertise in meeting standards
•EU Standards •Visa
•Distributor/promoter on the ground •Trade links
FCOR Purchasers
•Have capacity
•Demand based on trends (past and expected)
•Meet quality •Cost competitive
•Understand regulations & EPA
Main EU
CARIFORUM Suppliers
•Have income •Have population •Like CARICOM products
The End
яБо Thank You