Uganda – Least Developed Country Award
Interview with Daniel Kaibwije, Director, Trade Promotion & Public Relations Division, Uganda Export Promotion Board
Uganda’s Export Promotion Board (UEPB) partnered with the Uganda National Agricultural Advisory Services (NAADS) and created the Horticultural Export Initiative Programme Marketing Project. The project is designed to boost market-led production and productivity in selected agricultural clusters. This is a critically important sector with huge potential in many countries, particularly least developed countries (LDCs). The sector has the potential to employ disadvantaged men, women and young people across the entire export value chain. The Board chose three cooperatives clustered to produce citrus in northern Uganda, pineapples in central Uganda and hot peppers in eastern Uganda. A Market Linkage Centre was created in each cooperative to link cooperatives and farmers groups to export markets. The first step is to enter regional markets with a target of US$ 500,000 in export earnings.
‘UEPB together with other stakeholders formulated the National Export Strategy, which is the cornerstone for export promotion and development… and synchronizes with the National Development Plan and National Trade Policy. Previously, production and marketing were not synchronized. Today, there is a lot of effort in ensuring that ample market research is undertaken to support market-led production. Cooperatives can then understand what the market needs and produce as per market specifications and timelines. Countries should not fall into the pitfall of haphazard production.’
Daniel Karibwije, Director, Trade Promotion & Public Relations Division, UEPB
Daniel Karibwije points out that the greatest challenge facing many TPOs in least developed countries today is inadequate Government investment in export marketing. ‘TPOs charged with promoting exports require adequate funding for sustained export promotion and development in their effort to brand the country’s exportable goods and services,’ he says. ‘The political will to promote exports must be reflected in the budget allocation.’
Two important lessons learned by UEPB are the importance of market led production and product mapping. Karibwije explains: ‘It is important to understand the intrinsic requirements of the market in the import country. Least developed countries should not fall into the habit of haphazard production and should take advantage of positive agglomeration effects in agricultural clusters.’
Product mapping is critical in export promotion and development. ‘The competitive and comparative advantage of a country is best enhanced by mapping out which regions are most suited for particular products or services,’ he adds.
UEPB’s Market Linkage Centres, created in each cooperative, link cooperatives and farmers groups to export markets. The Centres accomplish this by offering:
- Export market information – presenting market trends and advice on planning and production processes;
- Business counselling and advisory services – fostering long-term enterprise development through customized, tailor-made support services for producer communities. Value addition is the driving factor;
- Capacity building – export business or business in general requires skills and capabilities in various managerial and functional aspects entailing quality management, production planning and forecasting, records management and business management;
- Business market linkage and matchmaking – this is a critical contact point for buyers wishing to get into direct touch with producers and vice versa;
- General information and publications – the Market Linkage Centres (MLCs) act as an extension of UEPB in rural settings – business community reference centres offer various information products from brochures, leaflets relevant to producers, exporters and the business community at large.
‘Previously, production and marketing were not synchronized. Today, there is a lot of effort in ensuring that ample market research is undertaken to support market-led production. Cooperatives understand market requirements and are able to ensure production of exports as per market specifications and timelines,’ Karibwije concludes.
Jamaica – Small Island Developing States Award
Interview with Delaine Morgan, Vice President, Jamaica Promotion Corporation
The Jamaica Promotions Corporation (JAMPRO) launched its Export Max: Enterprise Development for Export Growth programme to enhance the competitiveness of existing exporters and export-ready firms. The programme provides customized capacity building and market penetration support to 15 firms selected as having the best growth potential. Just seven months into the programme, participating companies reported new export and domestic sales of approximately US$ 1 million from direct participation in trade events and more than 70 trade leads are being pursued.
‘[We selected companies] in sectors highlighted in our National Export Strategy, mainly from the agro-processing sector. The biggest challenge being faced by our companies is access to financing. [But they] were also in need of technical assistance to improve their operations, infrastructure, factories and production facilities so they could meet market access requirements.’
Delaine Morgan, Vice-President, JAMPRO
The Export Max Programme was launched in June 2011. Fifteen (15) firms were selected through calls for expressions of interest and companies in the export community were invited to apply. The call, which opened for six weeks and resulted in 55 applications, was followed by a very rigorous and detailed selection process.
‘We had to do diagnostics with the applicants [that was] based on assessing a number of parameters relating to the operations of the various companies. An adjudicating panel with representatives from the public and private sectors assisted us with selecting the companies,’ Delaine Morgan says. ‘The 15 companies are in the various sectors highlighted in our National Export Strategy – mainly from the agro-processing sector.’
Memorandums of Understanding were signed with the 15 successful applicants in October 2011. After just one year into the programme, she reports a number of successes.
‘We were able to complete 15 diagnostic studies and from those we were able to develop enterprise development plans for the companies, including identifying a number of strategies to address the specific needs that were identified,’ Morgan says.
JAMPRO also mobilized funding of more than US$ 600,000 for technical assistance to help the programme’s participants improve their quality systems.
‘We have taken the companies to market through trade events. To date, we have taken them to eight (8) trade shows and they were able to generate export and domestic sales orders of approximately US$ 1.5 million,’ she says. ‘[JAMPRO has] also facilitated a number of capacity building interventions for the companies.’
One of the main challenges faced by Jamaican ready-to-export firms is access to financing. A second challenge is the need for technical assistance to enable companies to improve their operations, including acquisition of new technology and improvements of production facilities to meet market access requirements.
Being recognized as a winner means JAMPRO will benefit from brand recognition by both local and international stakeholders. ‘The award helps to build awareness of our Export Max programme and we have already been able to leverage additional funding,’ Morgan says. ‘We are now looking to expand the programme and the award will act as a stepping stone to attract further funding.’
The most important success factor for JAMPRO’s Export Max: Enterprise Development for Export Growth programme is the focused problem-solving approach to issues affecting the export performance of the participating companies. JAMPRO seeks to proactively identify the specific needs of each company and design and deliver customized enterprise development programmes for their advancement.
Mexico – Developing Country Award
Interview with Carlos Casas, Head of Export Promotions Unit, ProMéxico
ProMéxico Trade and Investment (ProMéxico) was recognized for its Export Supply Integration Model (INTEX). This innovative model focuses on increasing the productivity and competitiveness of SMEs. It does this by enabling them to take advantage of the opportunities in international markets by using partnership schemes.
ProMéxico identified a huge market opportunity, of US$ 250 million annually, for greenhouse tomatoes. Then, it developed a plan to boost the export capacity of small producers of greenhouse tomatoes. INTEX brought together 500 small producers from 13 different states under a unified brand, TEKITOMA, which, in 2011 resulted in US$ 40 million of exports.
‘Big corporations in Mexico export billions of dollars of agricultural products to the United States. But we have thousands of small producers who don’t know how to do it. We had to certify first; they need financing and to change the type of production they have. They needed to know about procedures and logistics.’
Carlos Casas, Head of Export Promotion Unit, ProMéxico
As a relatively new institution, ProMéxico – created five years ago – is developing several new models. Previously, the organization was an export investment promotion agency. Today, ProMéxico is ‘more in tune with what companies need’.
Carlos Casas explains: ‘ProMéxico is focused on its clients’ needs, and in many ways acts like an investment bank. We have clients and we have executives in charge of clients. In this way, we are very close to them and know what they require to take advantage of market opportunities.’
For example, ProMéxico recognized that the agricultural sector is comprised of many small producers scattered across the country who cannot export by themselves. ‘They were using intermediaries all of the time, they were uncompetitive and they were not certified,’ he says. Larger corporations export billions of dollars of agricultural products to the United States, but there are thousands of small producers who do not have the know-how.
The ITC award recognized ProMéxico’s programme to export greenhouse tomatoes. Over the course of three years, ProMéxico found a group of producers who were keen to improve their situation. They knew they had a good product and believed that with ProMéxico’s support they could export and diversify into varieties of tomatoes that are more highly valued on the market.
The first step was to identify producers interested in participating in the project. Next, a market study was conducted in the United States, Canada and Asia through ProMéxico’s offices. ProMéxico representatives talked to 25 distributors, buyers and experts to assess the potential opportunities.
‘We found a number of things we had to do to have them ready to export. We had to certify first, they needed financing and to change the type of production they have. They needed to know about procedures and logistics. But basically, they just had to get together,’ Casas explains. ‘If they didn't get together it would have been very difficult.
It was not that easy to bring the producers together, he admits. ‘Small producers think they know everything because they know how to produce. They were reluctant.’ However, ProMéxico presented them with a plan and incentives to join the project. ‘They became enthusiastic and started working with us in a very orderly manner. That’s been very successful,’ he adds.
Project participants formed a company (Integradora Hortícola Tekitoma, S.A. de C.V.) with a board of directors and are now exporting under the brand Tekitoma through one channel. This has resulted in in better prices, better productivity and improved logistics. ‘They are very, very happy. In addition, [various] government agencies came in and provided funding under different programmes,’ Casas reports.
INTEX also:
- Brought together federal, state and local players to create a continuous support structure;
- Implemented technical training programmes;
- Developed software tailored to the consortium’s needs; and
- Negotiated improved payment terms with an average 40% advanced payment and the balance in 21 days.
Under INTEX, associated growers exported US$ 40 million in 2011. Productivity improved 50%, production costs were reduced by 8%, and shipments increased by 60%. ProMéxico estimates 5,000 new jobs can be created in rural areas in this sector alone.
INTEX is being implemented for five other agricultural products (mango, Persian lime, papaya, pecan nut, berries) with each mapped into a logical framework, outlining specific objectives and tactics with corresponding indicators for ongoing performance management and timely corrective action. This is a model that can work for any agri-business product where the growers are pulverized and dispersed, but seasonally complemented.
‘The award is very important to ProMéxico… the application process was very specific. The award gives us a boost because it is given by alert TPOs. We plan to do an extensive marketing plan within the organization and our foreign offices,’ Casas says. ProMéxico also plans to communicate this recognition to the private sector. ‘ProMéxico is only five years old – this will boost our organization.’
Austria – Developed Country Award
Interview with Karl Hartleb, Deputy Director General, Advantage Austria, Austrian Federal Economic Chamber
Advantage Austria (WKO), the country’s Foreign Trade Promotion Agency, developed a unique initiative to promote Austria’s IT industry abroad and strengthen its competitiveness at home. The Go Silicon Valley initiative is enabling SMEs to break into the US market and to access risk capital. Under Go Silicon Valley, a programme financed with go-international funds provided by the Austrian Ministry of Economy, Austrian companies spend three months in Sunnyvale California using the Business Accelerator Plug and Play Center to kick-start their businesses. By exposing Austrian companies to the fiercely competitive Silicon Valley environment, some quickly adapt their business plans and become scalable businesses.
‘We needed to remedy a situation in Austria – the shortage of venture capital and access to key markets. We have a vibrant scene of IT companies … but there is a lack of money for small companies that have good ideas and need big global markets. So we introduced small Austrian start-ups to venture capitalists and to other technology firms [in the US] to look for partners and share technology.’
Karl Hartleb, Deputy Director General, Advantage Austria, Austrian Federal Economic Chamber (WKO)
Austrian IT firms develop ‘all kinds of solutions, from iPhone applications to industrial applications. But there is a lack of money that comes in to small companies that have good ideas and need big markets,’ Hartleb explains.
Advantage Austria tries to match these companies up in regions familiar with this type of business culture; in this case this was, Silicon Valley.
‘Overall, the Austrian business culture is not as open as some others,’ he says. ‘We introduce small Austrian startups to venture capitalists and to other firms looking for partners and to share technology. We are trying to initiate a more open attitude within the business culture. This initiative is one way of [achieving] this… it is currently not common to consider venture capitalism as a means to leverage funds for developing a business… The target is not the US market; it is a global market.’
Some of the 42 participating companies quit the programme once they fully understand the requirements. Others changed their ‘business definitions’ and ventured into different businesses and some were able to find a new financial basis. Five have set up subsidiaries in the United States, where the business culture is good, according to Hartleb.
Companies wishing to participate pay a €100 application fee and €400 when they travel to the United States. Advantage Austria, within the framework of the national export promotion initiative, go-international, of the Federal Economic Chamber and the Austrian Ministry of Economy, covers the remainder of the fees; those companies that decide to stay in the United States can apply for additional funding.
‘Advantage Austria sees the importance of SMEs making new decisions about the direction of their companies based on the practical and in-depth information they receive during their three-month stay in Silicon Valley,’ he says. ‘Ultimately these are responsible decisions as business managers can see early on what is required to be a sustainable company in the high-tech industry.’
Participating companies are engaged in weekly meetings with venture capitalists, attend trade shows and meet their peers who have launched successful start-ups. ‘They see how funding works, how the money comes in and [are exposed] to new technology. They also bring a network with them back to Austria,’ says Hartleb.
Advantage Austria has learned that it is on the right track in terms of analysing the situation of Austrian high-tech IT companies. ‘The programme is a great learning experience, to receive venture capital, see where the industry is going and where you are in respect to the competition … and what it takes to be successful in this very competitive industry. In Austria, we are dreaming of a venture capital culture,’ he adds.
The award will give ‘an internal boost’ to Advantage Austria and WKO. ‘Our 117 offices around the world will understand the message and not only take it as recognition for the work in the past, but also as a challenge for the future. Finally, the fact that we have been selected as Best TPO will confirm our customers´ impression, that Advantage Austria and the Austrian Federal Economic Chamber can provide a service of excellence to the Austrian business community, ranging from producers, to the IT industry and others in the service industry,’ he concludes.