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

Europe

By

Noel Watson Ph.D.

Consultant, Enabling Environments Ltd April 15-16, 2015

Making ACP countries a better place

for doing business

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

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

Objectives

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

Background

Nearly 0.5 Billion people

28 Countries

CARIFORUM and the FCORs

Whither the FCORs: Caribbean or Europe?

Geography

» Caribbean – same region, marine resources » Typically small (island) states » Weather/climate » Beautiful beaches

Demography

» Relatively small populations Heritage/History/Sport

» African, European, Indian heritage » World famous sports persons and artistes

Vulnerability

» Natural disasters » Limited exports products » High import dependence

What Do CARIFORUM and FCORs have in

Common?

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

What are Some of Main Differences Between

FCORs and CARICOM

Socioeconomic Variable Martinique Guadeloupe French Guiana

GDP per capita, current prices (US Dollar)

24, 120 21,703 15,955

Inflation, average consumer prices (Index, 2000=100) 2007-2008

2.7 2.2 3.3

Population 395,953 405,139 205 ,954

HDI Rating (French Rating) Very High Very High Very High

Distance FDF from Miami - Miles

1464 1377 3768

Main Exports Refined oil, agro-products (banana, rum), services

Agro-products (sugarcane, banana), light industry, transshipments

Gold, fishing (shrimps), rice, wood.

Main Industries Agro-products, construction, oil refinery, services (trade, tourism, public)

Agro-products, construction, services (trade, tourism, public)

Agro-products, construction, services, aerospace industries

Minimum wage rate : 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: 2011-2013 (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 170,884,630 229,282,151 199,053,703

Barbados 1,496,766 1,599,446 1,659,873

Guyana 1,931,471 1,933,405 955,763

Jamaica 5,846,997 5,239,159 5,736,787

Suriname - - -

Trinidad & Tobago 161,609,396 220,510,141 190,701,280

LDCs 5,318,813 5,066,658 5,489,520

Belize 7,892 3,228 2,048

OECS 5,310,921 5,063,430 5,487,472

Antigua & Barbuda 868,290 983,954 798,235

Dominica 2,475,092 3,243,583 3,269,051

Grenada 262,894 275,180 355,496

Montserrat - - -

St. Kitts & Nevis 577,279 301,076 94,607

St. Lucia 1,125,003 259,118 968,200

St. Vincent & the Grenadines 2,363 519 1,883

VALUE OF CARICOM'S TOTAL EXPORTS BY SELECTED SITC SECTIONS WITH FCOR: 2011-2013 (source: source: http://www.caricomstats.info/tradsysonline)

Commodity Description

2011 2012 2013

US$ US$ US$

ALL SECTIONS 176,203,443 234,348,808 204,543,222

FOOD AND LIVE ANIMALS 9,913,722 9,224,558 8,593,590

BEVERAGES AND TOBACCO 5,074,212 6,093,398 4,952,190

CRUDE MATERIALS INEDIBLE, EXCEPT FUELS 2,801,231 1,796,177 1,849,127

MINERAL FUELS, LUBRICANTS AND RELATED

MATERIALS

130,963,400 83,612,529 162,393,923

ANIMAL AND VEGETABLE OILS, FATS AND WAXES 65 537 370

CHEMICALS AND RELATED PRODUCTS, N.E.S. 12,685,324 36,906,626 7,424,998

MANUFACTURED GOODS CLASSIFIED CHIEFLY BY

MATERIAL

12,353,571 94,815,419 17,148,268

MACHINERY AND TRANSPORT EQUIPMENT 1,125,448 569,371 1,085,487

MISCELLANEOUS MANUFACTURED ARTICLES 1,280,109 1,298,447 1,092,323

COMMODITIES AND TRANSACTIONS NOT

CLASSIFIED ELSEWHERE

6,361 31,747 2,945

Opportunities: Goods Exports From CARIFORUM to FCORs

Based on Mission findings there are distinct possibilities for a number of the targeted items including:

– Cosmetics – Detergents – Electrical products – Furniture products – Safety products – Confectionery – Aggregate products – Packaging material – Labels – Garbage bags

Opportunities in Certain Products

Based on exporTT Missions

Include Senior Managers on Trade Missions for the simple reason that they can make decisions on the spot which may be pivotal in striking deals

Results of THREE Trade Missions to FCORs

Arranged by exporTT

Exploratory

Mission

Market Penetration

Mission

Mission

III

# Companies 17 7 10

Meetings 150 64 131

Leads 75 85

Confirmed Orders 1 6 6

Potential Orders 1 1 5

Days per Territory 2 2 2

Source: exporTT , 2015

T&T Companies Exporting to FCORs Source: TT CSO

1. ABRAHAM SHIPPING CO LTD

2. AG'S GARMENTS

3. ANGOSTURA BITTERS LTD

4. ASSOC BRANDS INDUSTRIES LTD

5. C G A LIMITED

6. CARIBBEAN BOTTLERS T & T LTD

7. CARIBBEAN DEVEL CO LTD

8. CARIBBEAN ISPAT LTD

9. CHAI'S EXOTICS

10. COLLEGE HEALTH FOODS

11. F A AGOSTINI ESTATES LTD

12. FORMULA I I I MARINE LIMITED

13. GENERAL PACKAGING LIMITED

14. HUMMINGBIRD GRAINS LTD

15. INDUSTRIAL GASES LTD

16. K C CONFECTIONERY LTD

17. KHAN'S ALUMINIUM PRODUCTS LTD

18. MARITIME PRESERVATION LIMITED

19. MEILING

20. MESSER TRINIDAD & TOBAGO LTD

21. NAT FLOUR MILLS LTD

22. PCS NITROGEN TRINIDAD LIMITED

23. PEPSI-COLA TRINIDAD BOTTLING

24. PETROLEUM COMPANY OF T & T LTD

25. PHOENIX PARK GAS PROCESSORS

26. PIARCO AIR SERVICES LTD

27. RADICAL DESIGNS LIMITED

28. ROTOPLASTICS

29. SOLOMON YUFE & CO LTD

30. STUART BROTHERS (W I) LTD

31. TASTE MAKER MANUF CO LTD

32. TDAD AGGREGATE PRODUCTS LTD

33. THE TEXTILE KING

34. TRINIDAD & TOBAGO TIRES LIMITED

35. WEST INDIAN TOBACCO CO LTD

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

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.

CARIFORUM-FCORs: Very Specific Current Example

Exchange of emails

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

Other Companies Exporting to the FCORs

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

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:

Export Readiness

Important ingredients • Company Profile • Labels • Certification • Production Plant

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

Business Intelligence

Critical Success Factors Strategic Alliances

If products are in demand, the potential market can eventually extend to mainland France and the wider EU.

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.

Penetrate market by working with distributors that are

already in the FCORs market and in mainland France

Strategic Alliances

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 – 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.

Market visit is very important: Our visits facilitated the assessment

of the market, standards and competition that lies therein.

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.

Critical Success Factors:

Trade Missions

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

Needs Identified in Regional Focus Groups

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.

Important Factors to Note:

FCORs: Cultural Idiosyncracies

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

Potential Challenges and Constraints

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

FCORs As Gateway to Europe

Model for Doing Business with FCORs As a Gateway to Europe

Opportunity

Commodities

•Wide range of goods

•Mineral products

Services

•Tourism, etc.

FCOR Purchasers

•Demand based on trends (past and expected)

•Have income

•Have population

•Like CARICOM products

CARIFORUM Suppliers

•Have capacity

•Meet quality

•Cost competitive

•Understand regulations & EPA

Critical Success Factors

•Market research

•Joint ventures and partnerships

•FCOR expertise in meeting standards

•Distributor/promoter on the ground

•Trade links

Barriers

•Language

•Transport

•Few distributors on ground

•EU Standards

•Visa

Main

EU

Thank You

The End