Trade Watch Issue 1 2015

Official E-Newsletter of the Caribbean Export Development Agency

VOL. 9 NO. 1 JAN-MAR 2015

NCB Homes Recognised for their Pursuit of Environmental Sustainability and Excellence The NCB Group has added another accolade to its already outstanding collection of honours, after they were awarded the prestigious “Local Investor of the Year” and “Caribbean Regional Investor of the Year” awards at the annual Regional Investor of the Year Award (RIYA) in 2014.

Now in its second year, the RIYA is hosted by the Caribbean Export Development Agency (Caribbean Export) and the Caribbean Association of Investment Promotion Agencies (CAIPA) in recognition of the achievement of pan-Caribbean foreign and local investors.

Established in 2001, NCB Group is one of the most recognised and successful real estate developers in Cayman; and over the last three years the company has contributed some US$30 million into local activities.

Naul Bodden, President of the NCB Group shared that the company is “honoured to accept the award for Regional Investor of the Year because it acknowledges that our commitment to sustainability is an important part of the work we do and demonstrates that it makes an impact on our communities’ environment in positive and lasting ways.”

NCB’s passion for building exceptional homes fuels their ongoing research into new and innovative materials, trends and construction methods. This tireless pursuit of excellence allows them to offer the highest quality, most energy-efficient and aesthetically appealing homes available in Cayman. The NCB one stop shop approach to residential home building covers concept design, planning approvals,

In this Issue Pg 3

EDITORIAL Changing the Status Quo

Pg 6

EXPORT DEVELOPMENT Intellectual Property Tools and the EPA

Pg 8

EXPORTER SUCCESS Cricket: Sun, Sea, Sand and Sport

Pg 10

ACCESS TO FINANCE Financing from the Angels

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OPPORTUNITIES Caribbean Export Opportunities

L-R Mr. Ryan Rajkumarsingh, Director, Cayman Islands Department of Commerce & Investment, Mr. Naul Bodden, President, NCB Group, Mrs. Pamela Coke Hamilton, Executive Director, Caribbean Export, and Mr. McHale Andrew, President, CAIPA

surveying, actual home construction, landscaping and connection of property to utility networks, including power, water and sewerage. Today, the company covers eight distinct service lines: Construction, Development, Design, Project Management, Property Services, Electrical, Plumbing and Geothermal.

The 100% locally owned company also builds with quality products with the future in mind.

“We strive to make sure every structure we build has as little impact as possible on the Earth by favouring sustainable construction practices, efficient building designs, environmentally friendly materials and through the integration of renewable energy sources such as solar and geothermal cooling,” stated Bodden.

“It would be remiss of us to not be committed to environmental sustainability because the risk to our children, grandchildren and even great grandchildren is too high,” he concluded.

The NCB Group does much more than simply ‘build homes’…they develop communities. When buying your own piece of Cayman from NCB Homes, you’re investing in the future of your family. NCB Group is leading the way in Cayman for environmental sustainability and they take their role as innovators very seriously, recognizing that the bricks laid in the present pave the way for future generations to come.

As a pioneer of green technology into their multiple construction practices such as solar installations, double-glazed windows and ICF foam insulated concrete for homeowners and corporate structures, the potential of NCB’s environmental impact is demonstrated by its popularity. Some projects that have benefited from Continued on Page 2

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Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015

INVESTMENT PROMOTION Continued from Page 1 their expertise include the residential community known as Cypress Pointe North and Cayman Technology Centre. Cayman Technology Centre will feature the largest closed-loop Geothermal system and the largest off-grid solar installation in the Caribbean.

Green building is growing in interest and practice, but it is certainly more than a trend, as this phenomenon represents a shift in the company’s customs and construction culture. As more and more property owners demand green technology, the NCB Group offers the ability to provide concrete expertise for every step along the way. With its products and processes, the NCB Group is foremost in the corporate response to reducing the carbon footprint of the Cayman Islands.

Cayman still has a long way to go to catch up with the trends we are seeing worldwide in incorporating green initiatives into residential and commercial projects, but progress is being made. It is a consumer driven market, therefore it’s imperative that NCB remains current and produces projects that are innovative, sustainable and consumer focused. Thanks to their innovative approach, superior building techniques, commitment to quality and use of state of the art, energy efficient technologies, the NCB Group has proudly positioned themselves as one of the most respected builders in Cayman.

Every structure they are responsible for is in itself a responsible addition to earth. Sustainability is at the forefront, and they are always watching for new innovations in a tireless pursuit of excellence.(TW)

Cypress Pointe Solar Project

Illustration of Cayman Technology Centre Geothermal Project

Exterior Rendering of Villa in Clubhouse Marina

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Illustration of Clubhouse Marina

Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015

EDITORIAL

Changing the Status Quo One morning whilst driving my son to school, he asked “ Mum, why is it mostly the mums who drop kids to school in the mornings and do the pick-ups in the afternoon?” I instinctively responded, “Well the men work…” and then it hit me…I WORK. In fact the vast majority of the mothers I know also work, and do school pick-ups, give lessons, ferry the kids to extra curriculum activities, do homework, plan sleep overs and the list goes on.

What struck me, and left me pondering on it for the past few days, was the automaticity, the virtual knee-jerk explanation that I proffered in response to his innocent query. But, I think I have figured out why.

I too have drunk from the cistern of “what mothers should do, and their role in the household” and I have come to the realisation that the tragedy is that it seems as if there is no amount of higher education, professional accomplishments, or accolades capable of uprooting this ingrained acceptance of gender roles in our psyche, and which is often manifested in reality.

I was having a conversation with a colleague about the recent appointment of the new Senator, Carol Lady Haynes, and the striking photo on the cover of the Nation News Barbados, mid-stride with her family in tow, looking every inch the powerful, incredibly accomplished, dynamic and innovative leader that she is. My colleague, having not seen the photo, upon seeing it, remarked, “Oh, this is Richie’s wife!” Need I say more?

I believe that it is critical that we as a region urgently realign perception with reality. And perhaps that is the difficult part because it also means that we, as women, are just as much facilitators of a status quo that maintains traditional roles, while the entire environment in which we now live has dramatically changed, placing inordinate demands on women to not only battle it out in the workplace, but also be “Stepford wives” and “soccer mums”.

Surely this cannot be sustainable.

As we celebrate International Women’s Day 2015 on March 8, one area that is certainly changing the status quo, is the growth of Caribbean women in business; a fact that cannot be ignored. Under the 10th European Development Fund (EDF), which Caribbean Export is currently implementing, the Direct Assistance Grants Scheme (DAGS) provided funding to 282 regional firms totaling some €5.8 million, of which 38% were female owned or led. In fact between 2012 and 2014, the funding awarded to femaleowned firms increased by 54%.

In addition to the DAGS, the Agency also provides special funding assistance to priority sectors. In 2014, this support was provided to agro-processing firms to the tune of €197,000. A total of 22 firms were awarded funding, of which 50% were female-owned businesses. This signifies continuing commitment by Caribbean Export to support women-led businesses where it matters the most. It is generally difficult for all small businesses to obtain financing in the current environment, but women-owned businesses face greater challenges.

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Mrs. Pamela Coke Hamilton, Executive Director, The Caribbean Export Development Agency

As a result, most women start companies using more of their own money, and less capital from outside investors. Also, women can be more reluctant to apply for loans and are more likely to expect rejection, and research shows that more than 10% of men seek external equity financing, versus just 2% of women.

Yet when women are the direct beneficiaries of credit, their repayment rates are higher in all regions of the world.

The empowerment of women entrepreneurs has become the focus of global governments within the last few decades. In fact, it is posited that helping women-owned business is a smart investment as data from the World Bank, and the World Economic Forum demonstrate that women-owned businesses can be the tipping point for a global economic comeback.

As we celebrate another International Women’s Day, let us commit to changing our perspective from the inside out and in that transformation of our minds, achieve the radical shift that we so desperately desire.(TW)

Caribbean Export’s International Women’s Day 2015 Video (Internet Connect required)

Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015

EXPORT DEVELOPMENT

Overcoming Barriers to Export with Trade and Business Intelligence

In the era of intense global competitiveness, a pervasive economic crisis and the eradication of preferential treatments on the world stage, the Caribbean is now forced to compete directly with larger developed economies that have advantages of economies of scale and scope. Furthermore the region is faced with sluggish economic growth and an impeding business environment which render its exports largely uncompetitive. Firms have therefore been forced to adopt new and improved production methods, minimize their cost structures and focus more on research and development.

This shift has now led them to rely more and more on trade and business intelligence services.

Broadly speaking, trade and business intelligence services refer to the gathering and analysing of high quality information on markets of interest and competition within those markets. This allows firms to make more informed strategic decisions with the aim of levelling the playing field to increasing their competitiveness in the global market and highlighting market opportunities for further growth.

Inefficiencies and wastage are factors that cripple regional firms. Intelligence can help businesses improve their value chains and take advantage of the most efficient production and distribution methods. Market intelligence can assist firms to make more informed marketing strategies and identify market opportunities and potential diversification strategies. Trade and Business Intelligence also reduces the risk associated with firms trying to penetrate new markets by providing them with up-to-date political, economic and social trends.

Given the increased need for trade and business intelligence

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services within the region, the Caribbean Export under the 10th European Development Fund (EDF), Regional Private Sector Development Programme (RPSDP) has responded to the need of firm by implementing a range of programmes geared at improving the export competitiveness of Caribbean firms and, by extension, the sustainability of the region’s exporting sectors.

One such programme is the Trade and Business Intelligence System (TBIS). This system addresses the TBI needs of firms, both those who are already exporting and those with the potential to export goods and services. In addition the system addresses the needs of Business Support Organizations (BSOs), including Trade Promotion Organizations. The TBI team initially conducted a number of needs assessment surveys, following which Caribbean Export has been able to develop a range of tools and activities which were identified as prioritise during stakeholder consultations. To date this has included Training and Capacity Building for firms to develop simple market briefs that can aid in strategic decision making and build greater appreciation for Trade and Business intellligence. The development of an in-house facility to produce Market Briefs for firms; and a Market Intelligence Portal give users the ability to obtain market reports and other trade related information on products, sectors and countries of interest.

The TBIS is designed with the customer in mind, tracking and evaluating customer interaction and recording desired changes in tastes and preferences. As such, the TBIS conducts quarterly surveys on a cross section of stakeholders to gather valuable feedback which is used to develop new products and services that speak to these needs.(TW)

Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015

EXPORT DEVELOPMENT

Fruity, Florally, Nutty and Earthen: Caribbean Cocoa Inspires the World’s Chocolatiers The popularity of dark chocolate throughout the world has surpassed just being a flavour of the month. The rapid growth in demand for fine flavour cocoa, primarily used in the soughtafter dark chocolate, over the past five years, is set to continue bringing lucrative benefits to the Caribbean’s fine cocoa industry.

How the region can fully exploit this enhanced business growth through market penetration was explored at the 3rd CARIFORUM-EU Business Forum, hosted by the Caribbean Export Development Agency, from April 15-16, 2015 in Montego Bay, Jamaica.

The world cocoa market distinguishes between two broad categories of cocoa beans: ordinary or bulk beans (around 85% of all cocoa worldwide) and fine flavour beans, which are the defining component of high quality chocolate. Together, Latin America and the Caribbean produce 80% of the world’s fine flavour cocoa and, with six of the recognised 17 countries in the world that produce and export the exotic product come from the Caribbean, the collection of small islands have earned their place to feature prominently on the world stage.

As the drive for increased consumption is coming from the more mature markets of Western Europe, North America and Japan, producers need to be aware of the specific requirements and expectations of these buyers and importers to make the most of market opportunities.

“We need to look at how to recognise and encourage the proper growing and processing of fine flavour beans and how to build links between small farms and artisan chocolate makers. Both sides can benefit from the sourcing of unusual and interesting flavours from very local sources and the production of great chocolate,” says founder of the British company Duffy’s Chocolate Duffy Sheardown, who will be a speaker at the upcoming Business Forum.

The complex flavours of cocoa beans grown in the region have also become increasingly popular, as major chocolate manufacturers in Europe and other markets are now offering premium chocolate products in their range.

For example, cocoa from Jamaica has been described as ‘fruity’, cocoa from Grenada as ‘fruity, florally and earthen’ and cocoa from Trinidad as ‘nutty and winey’. Like coffee or wine, the taste of cocoa is unique to a region and can vary from season to season.

The 3rd CARIFORUM-EU Business Forum further explored trends and innovations in the Caribbean’s specialty cocoa industry and provide a platform for companies to network and find out about trade and investment opportunities. The Forum is being organised in collaboration with the ACP Business Climate facility (BizClim) and seeks to promote trade between Caribbean businesses and those in Europe, enable public-private sector dialogue and support the business climate reform agenda in the Caribbean. The agro-processing industry (cocoa, herbs and spices) will be specially featured along with music and higher education.(TW)

For more information about the 3rd CARIFORUM-EU Business Forum please click here

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Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015

EXPORT DEVELOPMENT

Intellectual Property Tools and the EPA Intellectual Property (IP) is a term that refers to creations of the mind such as the development of a new machine, a new plant variety, a new original song or a new name for a product or service. Intellectual property rights (IPRs) are therefore the exclusive rights legally given to such creations of the mind and are similar to property rights in that they belong to the owner who has the exclusive rights to sell, import, license and use his property.

The objectives of Chapter 2 of the CARIFORUM-EU Economic Partnership Agreement (EPA) on Innovation and Intellectual Property is to foster innovation and creativity to achieve sustainable development, promote trade and ensure the integration of CARIFORUM States into the world economy. The EPA recognizes the importance of protection and enforcement of intellectual property to achieving this goal.

In today’s knowledge-driven economies, protecting and managing IP assets can be critical to the success or failure of an enterprise. Following are the different types of intellectual property and opportunities for individuals to protect their work under the EPA. COPYRIGHT AND RELATED RIGHTS Literary and artistic creations, such as a painting, books, music, performances, films as well as software are protected by copyright and related rights. Copyright and related rights are automatically obtained once the work has been committed to some tangible form, such as writing a poem on paper or recording a musical composition to a compact disc.

Opportunities under the EPA • Provisions relating to copyright under the EPA seek to ensure that rights holders from both the European Union (EU) and CARIFORUM states are adequately compensated for use of their works.

• The EPA also seeks to facilitate reciprocal agreements between respective CMOs, with the purpose of ensuring easier access to copyright materials as well as easier delivery of licenses for the use of such material throughout the EU and CARIFORUM states.

• In addition to exporting copyrighted works, under the Services Chapter of the EPA , there are market access commitments by 26 European states for the exchange of entertainment services, except audio-visual.

PATENTS Inventions, such as the mobile phone and the steam engine, are protected by patents. Patents give legal rights to the creator of an invention to stop others from importing, selling, distributing or treating the invention in any way without the permission of the patent holder.

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Opportunities under the EPA • The PCT allows for an inventor to file a single patent application through WIPO, and therein name countries in which the inventor wishes to seek a grant of patent.

• The Budapest Treaty makes it easier for applicants to patent micro-organisms in multiple countries and limits national procedural requirements.

• The Patent Law Treaty (PLT) also limits the requirements of filing a patent application and would therefore lower the cost of applying for a grant of patent in CARIFORUM countries.

INDUSTRIAL DESINGS Industrial designs are applied to a wide variety of products of industry and handicrafts such as technical and medical instruments, watches, jewelry, housewares, electrical appliances, vehicles, architectural structures, textiles and leisure goods.

Opportunities under the EPA • The Hague Agreement, like the PCT, is a useful tool for designers to seek protection for their designs in multiple territories through a single international registration with WIPO. • With the expansion of protection to unregistered designs for up to 3 years from the date the design is made public, CARIFORUM designers can seek action against the intentional copying of an unregistered design.

Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015

EXPORT DEVELOPMENT TRADEMARKS Every business has a name under which it operates and most businesses have a brand associated with their product or service.

This brand or name can be protected under intellectual property as a trademark.

Opportunities under the EPA The Madrid Protocol seeks to minimise costs and the procedures associated with filing trademark applications in multiple territories.

Under the Madrid Protocol, a Micro, Small and Medium Enterprise may also save costs post registration as all renewals, records of changes in the name or address of the proprietor, and assignments can be carried out through WIPO without having to renew or record such changes separately in each of the designated territories.

The CARIFORUM-EU EPA is a permanent instrument of trade partnership between CARIFORUM and the EC. It replaces the trade component of Lomé IV and its successor Cotonou (2000). It is more than a free trade agreement (FTA), as it contains a strong development component with clear links to development aid for adjustment and modernization of CARIFORUM economies. On 16 December 2007, an Economic Partnership agreement (EPA) was concluded between CARIFORUM (CARICOM and Dominican Republic) and the European Community (EC). This represents the culmination of three years of formal negotiations between the Parties.

GEOGRAPHICAL INDICATIONS A geographical indication (GI) is a sign used on goods that have a specific geographical origin and possess qualities, reputation or characteristics that are essentially attributable to that place of origin.

Usually, a GI takes the name of the place of origin of the goods.

Opportunities under the EPA • Where a geographical indication is protected under national legislation in a CARIFORUM state, the right holder can request that the EU recognises and protects the product as a GI. • A GI classification allows rights holders to charge a premium above margin price for such products. Consumers will be more likely to purchase a GI branded product over other brands as they would be assured of the quality and origin of the product through the value associated with that GI. PLANT VARIETIES Plant breeding is the manipulation of a plant’s genetic characteristics to produce a new set of characteristics that would benefit humankind.

Opportunities under the EPA • Using plant breeding to improve crops could be beneficial to farmers by increasing yields and nutritional value throughout the year as well as guaranteeing a product that is enhanced and resilient to pests, diseases and other ailments.

• Effective plant breeding of varieties unavailable in the region, and the saving, exchanging and reusing of farm-saved seeds and propagating materials provided for under the EPA as an exception to PVRs, can result in reduced food imports in the region.

• Farmers can also benefit from licensing new varieties to territories in need of similar varieties, therefore providing another source of revenue from farming.

To learn more click here and read the full EPA Business Brief on Intellectual Property.(TW)

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Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015

EXPORT SUCCESS

The Caribbean: Sun, Sea, Sand and Sport

T20 cricket has reignited the imagination and draws crowds back to the stadiums for fast-paced games. Think of what it can do for tourism and the economy!

When people think of cricket in the Caribbean, often it conjures up images of children playing on the pristine sandy beaches against a backdrop of turquoise water with the sun shining endlessly against it.

That’s a rather romantic image of yesteryear, as today you are more likely to find children playing football on the beach and basketball in the parks.

For quite a few years, regional and even international cricket had been played in the West Indies, more often than not, to half empty stadiums, but the inaugural Caribbean Premier League (CPL) Twenty20 (T20) competition finally reignited the imagination of disgruntled fans.

In July and August of 2013, the Caribbean witnessed soldout stadiums, captivated crowds and international investment far surpassing what the organisers had ever expected. The CPL represents for the region a great opportunity to exploit sport tourism, which is a fast growing sector of the global travel industry.

It was in September 2012 that the West Indies Cricket Board announced that it had finalized an agreement with Ajmal Khan, founder of Verus International, to fund the league which operates under a franchise model comprising six teams—the Antigua Hawksbills, the Barbados Tridents, the Guyana Amazon Warriors, the Jamaica Tallawahs, the Saint Lucia Zouks and the Trinidad and Tobago Red Steel.

T20 was introduced in 2003 as a new format for the game, a fast and furious version that has become an instant success with cricket fanatics, and has also delivered significant value to multiple partners—team owners, broadcasters and sponsors alike.

Global interest has grown significantly and this high-energy game has a natural home within the Caribbean, synonymous with vibrant, colourful Carnivals and a party atmosphere. High energy is exactly what was experienced at every CPL T20 game that was played during the summer of 2013. “There is nowhere in the world that I have ever experienced an atmosphere like what we had at CPL,” said CPL Chief Executive Officer Damien O’Donohoe in a recent interview.

The T20 series hosted more than 250,000 fans across six countries and 36 million viewers worldwide. Approximately US $4.868 million was spent in and around the stadiums, which could result in an economic impact of US $91 million when hotels, travel, food and other services are taken into consideration.

These figures cannot be taken lightly, especially in view of the ratio between regional visitors and international tourists attending the games. As much as 90% of league has been funded from within the region, with Digicel as the global sponsor and Guyana’s Limacol as the title sponsor. The success proves that there is spending power within the region, O’Donohoe said, and “with the right structure and the right team, we can deliver a world-class event in the Caribbean as the CPL is second only to the Indian Premiere League.”

Continued on Page 10

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Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015

EXPORT SUCCESS Continued from Page 9 It is the production of world-class events in the Caribbean that will support the development of the sports tourism sector. The precedent has been set with the CPL and the goal should be to continue developing this product to further stimulate regional expenditure and to attract greater international investment to support the local economies.

The CPL has already seen investment from Hollywood stars Gerard Butler and Mark Wahlberg, who have stakes in the Jamaica Tallawahs and the Barbados Tridents teams respectively. Long-term Caribbean investor, owner and founder of the Virgin Group Sir Richard Branson has invested in the Antigua Hawksbills and is a tournament sponsor.

Such celebrity endorsements, combined with the opportunity for the CPL to be seen by as many as 80 million via ESPN, give rise to endless possibilities when it comes to boosting sports tourism, international business, attracting foreign direct investment into the Caribbean, and the exportation of our goods and services.

Increased media exposure of sporting events is critical to raise the profile of sports. Live coverage will always be preferred by viewers, and thus the time zone difference presents a challenge for the target markets that are most interested in the main international sporting events. For example, UK fans are sleeping whilst sport in the Caribbean is being played. Still, an increasing number of sports fans want to experience live events.

The media have the ability to create national and international icons of professional athletes, which engenders greater demand, as fans want to see their sporting idols in the flesh. Such celebrity status translates into an immense opportunity for the CPL as well as other sports. Carole Beckford, publicist for Usain Bolt, noted that at least 450 elite Caribbean athletes are featured on television year-round— from Jamaica’s Bolt to the US Virgin Islands’ basketball superstar Tim Duncan. It is estimated that 12 million international sports tourism trips are made each year, a niche which represents 14% of the global travel and tourism market which is expected to grow around 6%

annually over the next four years.

Sporting events are being made more appealing to attend, with producers listening to the needs of their audience and providing greater levels of comfort. CPL T20 has been truly cemented as a Caribbean family event, with grandparents, parents, children and women (24% of the audience) attending the matches. O’Donohoe noted that no costs were spared to ensure the overall experience was positive, with spectacular firework displays and entertainment to support the cricket.

The CPL’s scheduling during the height of Carnival season enables other events, such as festivals and concerts, to be created around it, further enticing visitors to the region. Sporting events bundled with the entire creative sector makes a very attractive destination.

The CPL is now tasked to build its brand to capture the minds of tourists and those interested in the Caribbean. The CPL has the potential to grow beyond the Caribbean shores. About 1200 cricket clubs have been identified in New York alone, indicating there is a strong interest in what many would consider nontraditional markets. The Indian Premiere League (IPL) was valued in 2010 at US $4.13 billion by the UK-based brand consultancy Brand Finance, and although we can’t compare the CPL to the IPL because of the sheer size difference, the global cricket market is huge and available for the Caribbean to seize a sizeable portion to significantly contribute to the region’s economies.

With the support of the governments and tourism boards, the CPL can assist in putting the Caribbean in the homes of 80 million people worldwide, greatly increasing the potential for avid cricket fans travelling to the region or even vacationers who simply want to enjoy a different side of Caribbean life.

After watching the scenes of jubilation, and the electrifying atmosphere witnessed in 2013, who wouldn’t want to come to the Caribbean and experience the music, the culture, the food, the Carnival, the people and, of course, the home of the best cricket in the world!

Reprinted for the Caribbean Export Outlook 2014-15

To read more articles from the Caribbean Export Outlook click here

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Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015

ACCESS TO FINANCE

Financing from the Angels It is no surprise that one of the major difficulties that start-up companies have is gaining access to finance. Some of the options available are bank loans, grants, guarantees and investments from venture capitalists or business angels. And quite often, many people are confused about the difference between venture capitalists and business angels. Mr. Nelson Gray, the Project Director for the Caribbean Business Angel Advisory Program, and European BA of the year 2008 has been a business angel for over 21 years and recently met with Caribbean Export. He explained that “venture capitals are institutions that collect other people’s money and invest it for a fee. Angel investors or business angels invest their own money, make their own decisions and ideally invest their time, knowledge and experience mentoring the company in which they have invested”.

Typically angel investors invest in companies in the infancy stage and start-ups in the technology industry; however they are not limited to these criteria and often invest in businesses of any size, stage of development or industry that appeals to them. In the United States last year there were 70,000 angel investments into start-up companies compared to 4,000 investments by venture capitalists. This is a clear indication of the level of impact business angels have on companies in the start-up phase.

Angel investment is usually exchanged for a stake in the equity of the company, but can also be exchanged for a share of profit, turnover or even as a loan. However, it is important to note that business angels provide more than financial support for an entrepreneur, as they also provide various forms of expertise such as management experience, industry knowledge, or technical skills. Consequently, many entrepreneurs have indicated that the

support received from a business angel was more important than the financial injection into the company, making this combination of financial investment and practical support to be commonly known as “smart money”.

In fact, Gray describes taking money from the bank as “dumb money” because “you get the money and nothing else except a set of controls and restrictions. Where as, if you take money from an angel investor you get the introduction to their rolodexes, so you get the introduction to companies that you want to sell your goods to, companies with the best manufacturing partner and experience on how and who to hire. All of this comes “free” and this is how you leverage your business.”

Gray sites a study that was conducted in the United Kingdom which suggested that only 4% of start-ups will be suitable for third party investments, the rest are sole trader lifestyle businesses.

Angel investors target that 4%. It is predicted that in 10 years’ time that the 4% will account for 50% of the employment created by that set of start-ups. This in itself is the economic driver that supports angel investing. “It is partly a self-fulfilling prophecy that if you take external funding to grow your business you will have higher levels of employment, turnover, exports and profits because you have the money and the expertise of your angel investors.”

The relationship between an angel and an entrepreneur can therefore be very close and akin to a true business partner.

Consequently if the business fails, the angel investor would have not only lost his money, but more importantly he would have lost the time that he spent with the entrepreneur. Gray states “I want to be valued more than my money and if the entrepreneurs doesn’t value my time and effort … then I should not invest in

Mr. Nelson Gray, the Project Director for the Caribbean Business Angel Advisory Program chats with Mrs. Pamela Coke Hamilton, Executive Director of Caribbean Export

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Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015

access to finance Three Qualities for Attracting Angel Investors

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Willingness to take a partner and to be engaged and coached by that partner

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An ambition to grow a significant business not only locally but that can go Pan Caribbean and internationally;

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The recognition that there has to be returns on investment for the investor.

them and they should not be taking my money”. He uses the analogy of an athlete, “at the end of the day we are going to improve their performance to an Olympic standard”.

For Caribbean entrepreneurs that are interested in seeking a partnership with an angel investor, Gray advises “there are three qualities companies within the Caribbean must have to attract investors.” These are the willingness to take a partner and to be engaged and coached by that partner; an ambition to grow a significant business not only locally but that can go Pan Caribbean and internationally; and the recognition that there has to be returns on investment for the investor. All in all it is the willingness to work with others to build a business of substance that is required for any entrepreneur to attract an Angel Investor and grow a successful global business.

Over time business angels have merged to form Angel Networks where individual investors form groups and pool their resources to: make larger investments; make better deals; secure talented

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human resources and better facilities; have a diversity of industry knowledge, management skills and financial assumptions which makes it more efficient in the screening processes; share in the risk through shared investments and diversification of finances into investment portfolios and influence regulatory and policy issues with governments. An angel network is thus, an organization that helps investors find companies to invest in, focussing primarily on business support and acting as a liaison between the entrepreneur and the investors.

Gray naturally supports the development of angel networks, encouraging cooperative investment by building portfolios of 10 or 15 companies, sharing the investments with other angels within the network. This is considered good practice as it not only shares the financial risk but also pools together the expertise explaining “I may have the expertise in setting up the business but another member may be more appropriate to mentor the company in manufacturing while another may have the experience in international sales. So we will pass the company around at varying stages of its development to share the skills within the network”.

Caribbean Export is in the early phase of developing an angel network in collaboration with World Bank/InfoDev with the aim of bringing together Caribbean entrepreneurs and angel investors from the region. It is hoped that the development of a Regional Angel Investor Network will provide an alternative avenue for start-up firms to access finance from traditional banking or even grants.(TW)

Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015

OPPORTUNITIES

Glyn Partridge, Chief Executive Officer of 10 Saints Brewery Limited shares how to leverage Caribbean Export initiatives to successfully maximize export potential

Opportunities Consultancy: Provision of In-Market Support at ANUGA 2015 “ANUGA Fine Food” is the world’s most premier exhibition for gourmet and delicatessen products. ANUGA is not only the largest food and beverage fair in the world, it´s also the sector´s most important fair for new markets and target groups.

It is the perfect venue for all the latest trends and themes in the food and beverage industry and a great place to make first-rate contacts and business deals. The event will be held at the Cologne International Expo-Centre and is organized by Koelnmesse GmbH. In 2014 ANUGA was attended by 6,777 companies from 100 countries and occupied a gross exhibition space of 284,000 m². Over 155,000 trade visitors from 180 countries attended the exhibition.

Caribbean Export is looking for a consultant to provide in-market support to CARIFORUM agro-processing firms at ANUGA 2015. Interested persons are advised to review the full terms of reference and submit proposals accordingly.

DOWNLOAD THE TERMS OF REFERENCE - ANUGA 2015 Proposals should be submitted no later than May 22nd 2015 electronically and in English to Ms Ginelle Greene, GIZ Private Sector Officer at email ginelle.greene@giz.de; copied to Mr Damie Sinanan Caribbean Export, Special AdvisorExport Development at email dsinanan@carib-export.com.

CLICK HERE TO VIEW ALL THE CURRENT OPPORTUNITIES AVAILABLE ON THE CARIBBEAN

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Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015

UPCOMING EVENTS

May 2015 Services Go Global Training of Trainers Certification

Barbados

May 4-8

Fair Agroalimentarie 2015

Dominican Republic

May 7-9

ProNET Training

Trinidad and Tobago

May 11-13

Services Go Global Training of Trainers Certification

Jamaica

May 11-15

World Forum on Quality Management

Mexico

May 26-29

Workshop on Best Practices in Quality in the Agro-Food Industry

Haiti

May 27-28

June 2015 Services Go Global Training of Trainers Certification

Antigua and Barbuda

June 1-5

Services Go Global Training of Trainers Certification

Saint Lucia

June 8-12

Business Futures of the Americas Conference

Haiti

June 13-17

Call Centre Week

USA

June 15-18

Caribbean Investment Forum

United Kingdom

June 25

Outlook Ad-TIME Mag(f)HR.pdf

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Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015

ABOUT US

Caribbean Export Development Agency Head Office: 1st Floor Baobab Tower Warrens, St Michael BB22026 BARBADOS Tel: (246)-436-0578 Fax: (246)-436-9999 Email: info@carib-export.com Sub Regional Office: Av. Pedro Henríquez Ureña No. 150 Torre Diandy Xix, Piso 7 Santo Domingo REPUBLICA DOMINICANA Tel: (809)-531-6565 Fax: (809)-473-7532 Email: c.export@codetel.net.do Website: www.carib-export.com

Caribbean Export’s Strategic Objectives • Increase trade and business intelligence & research capacity • Foster access to finance for export-ready SMEs • Strengthen regional investment promotion capacity • Facilitate export development and promotion • Reinforce advocacy for an enabling environment • Ensure sustainable corporate capacity building

www.facebook.com/Caribbean.Export www.twitter.com/CaribXport www.youtube.com/TheCaribbeanExport

We are very interested in your feedback.

Please email your comments to: tradewatch@carib-export.com.

All material copyright © 2015 Caribbean Export

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TradeWatch is made possible through the kind support of the European Union.

Tradewatch • The Official E-Newsletter of the Caribbean Export Development Agency • Vol.9 No. 1 January - March 2015