The French Caribbean Outermost Regions (FCORs) as a Gateway to Europe

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