Exporting; it’s the difference between a domestic market of four million and an almost unlimited global market of billions. To our little corner of the South Pacific, it means the difference between sinking and swimming in the financial waters of the global market.
Quite simply, exporting is vital to New Zealand’s economy.
With a population of less than 150,000, exporting offers Hawke’s Bay businesses the opportunity to tap into a global network well beyond its own geographical borders.
While getting established as an exporter is not easy, particularly with the recent changes in the exchange rate, businesses can become successful exporters with good advice, planning and focused support. Hawke’s Bay is working to achieve a significant increase in local exports.
Export performance
In New Zealand, just four percent of businesses are exporting. In the Hawke’s Bay, only 270 businesses are reaping the financial rewards of this extended customer base. So just where are we going wrong?
According to Export New Zealand’s Hawke’s Bay business development manager Amanda Liddle, exporting means increased growth for the country. “Think of it like this; there is a certain amount of money that a country generates for itself, like a money cycle. The more money you can bring in from an external source, (ie another country) the bigger the cycle gets.
“This cycle results in a higher GDP which in turn benefits us all with more money to pay people, leading to higher employment, which creates more national wealth. That leads us to improved services in hospitals, schools and other institutions.”
So then what is with these disheartening figures? “There are challenges for a company starting out in the export market,” Liddle explains. “The high dollar, initial set up costs, establishing distribution markets and relationships, overseas travel to name a few.
“But if there is a long term strategy in place the journey can be mapped out to ensure you stick to what it is you want to achieve.”
Few Kiwi companies are taking advantage of this because businesses simply don’t know how to make the next move and head offshore. “What they need to know is there is lots of help out there.”
In order to improve these figures, we need government support such as the Ministry of Science and Innovation’s Tech NZ programme, she explains. “This is a 50/50 business fund that supports research and development into new technology. Not only does it partly support the business financially, but it also places confidence in the business that they have a worthwhile product that can be marketed internationally.
The logistics
We’ve all read the headlines; foreign exchange rates are up, exports are down, compliance issues are closing down businesses… So what’s the deal? Is exporting all it’s cracked up to be? And how difficult is it really?
While it can seem daunting, Liddle says it is well worth the effort and help is available. “With the right help it can be a very rewarding process, but of course it takes hard work and commitment and perseverance to establish the networks and business model you want.”
So, what is the first step to starting a rewarding export journey? “Go to the websites, Export NZ, NZTE where there is a wealth of information. Talk to your Chamber of Commerce or whoever issues export documentation. Get involved in the export community so you are linked into the general export programme of the region, e.g networking events, training courses and specific market seminars and roadshows.
“Export NZ , the regional business partner programme, Chamber of Commerce and NZTE who has an office here and the 0800 number 0800 555 888 are excellent sources of help and information.”
The most important factors to take into consideration before making the first move are how is your company operating, do you have a strategy for export market, do you have a business plan, what is your cash flow like, do you have any existing distribution channels set up, what is your path to market and do you have a contingency plan.
Exporting trends
The Hawke’s Bay is home to a diverse range of industry and business. Much like these businesses are suited to a specific local customer base, they are also suited to specific international customer bases. So let’s look at the latest exporting trends.
Export New Zealand – Hawke’s Bay business development manager Amanda Liddle says since signing the NZ-China Free Trade Agreement in 2008, New Zealand exports to China have grown by 135 percent, from $2.3 to $5.4 billion. “It is now New Zealand’s second largest trading partner and export market. China is a growing market for Hawke’s Bay businesses.”
What are the Hawke’s Bay’s most likely international markets?
“Australia is our closest country with the most similar culture to us,” Liddle explains. “Often this can be a good starting point. We have exporters doing business in the UK, Europe, USA, Middle East, South America, Indonesia, Japan to name a few. In fact you name the country and we will probably have an exporter presence in that market.”
Are there international markets we should steer clear of?
“Due dilligence on overseas businesses is important Liddle says. “You need to check and understand the non tariff trade barriers like quotas, levies, embargoes, sanctions and other restrictions on trading with a particular country. It is also important to know who we have Free Trade agreements with, such as China, Australia and the ASEAN countries.”
How does someone decide what markets could work for them?
“Once you know your market it is about investigating the opportunities and knowing what your product’s unique selling proposition is. How does it work in other countries? New Zealand is blessed with a clean green image (whether you agree or not – perception is everything) and is held in high regard for our food safety standards. This pure, natural image stands us in good stead for our products, particularly the niche, high-end products such as wine, honey, olive oil, ice cream and of course dairy, to name a few.”
Case study – from Hawke’s Bay to Hong Kong
Hawke’s Bay wine has gone global, with the number of local wineries exporting to Asia continuing to grow, according to Hawke’s Bay Winegrowers Inc. executive officer Lyn Bevin.
“At last count, we had 18 Hawke’s Bay wineries exporting to Hong Kong and 23 to China and we know from research that Asia, in particular China, has a growing desire to buy our wines. We are working hard to better understand this market and are developing relationships that work well both ways,” she explains.
Fongyee Walker and her husband Edward Ragg, are founders of Dragon Phoenix Fine Wine Consulting; China’s most successful Wine & Spirit Education Trust that works to educate Chinese about wine and assists wine companies from around the world to establish Chinese markets.
Fongyee says that to be successful exporting to China you need to be very serious. “You need to be committed, you need to work at it, visit regularly, be prepared to create a buzz, create an identity,” she says. “If you want a meaningful relationship then you need to do the legwork. The Chinese market is open but you need to choose with care, target one or two places and then be prepared to help educate about wine with simple messages.”
Alwyn Corban, managing director of Ngatarawa Wines has been exporting into China for the past three years. “It is definitely about developing relationships and your networks and being patient. There are masses of opportunities but you need to take the time to sift through them. It’s also important to maintain your brand position and your integrity.”
Exporting workshops for Hawke’s Bay
Export New Zealand holds breakfasts with the Chamber of Commerce, meetings, workshops and other informative events for exporters. Sign up to the Export NZ newsletter in HB (by contacting Amanda Liddle on the details below) and the national newsletter through www.exportnewzealand.org.nz
NZTE now has a dedicated export newsletter that provides weekly updates on any new information they have at a global level. Free of charge, it includes regular export intelligence reports highlighting critical export market developments as well as current business trends and issues. Sign up to NZTE exporting newsletter at www.nzte.govt.nz
The Chamber of Commerce has a dedicated China specialist to help with any enquiries about trading with China.
Contact Jim Poppelwell: jim.poppelwell@hawkesbaychamber.co.nz
Exporting links
New Zealand Trade and Enterprise
www.nzte.govt.nz
Market New Zealand
www.marketnewzealand.com
Business Info
www.business.govt.nz
Export New Zealand
www.exportnewzealand.org.nz
Regional Business Partners
This is a programme to help your business, providing vouchers for business training and funding for Research and Development
https://www.business.govt.nz/growing/assessing-capacity-and-capability/regional-business-partners
Contact Jenny Brown on jennyb@hbrc.govt.nz for Tech NZ enquiries
and Karen Cooper for business training – karen.cooper@hawkesbaychamber.co.nz
Market Intelligence for New Zealand Exporters
https://www.nzte.govt.nz/explore-export-markets/Export-Intelligence/Pages/Export-intelligence-reports.aspx
Beachhead Programme
Innovative and international
Here are some innovative and internationally competitive Hawke’s Bay owned and operated companies:
– Furnware – ergonomic school furniture
– Future Products group – manufacturers of food service temperature controlled displays and shop fittings
– Wood Mallets – polo mallets and cricket bats
– SirTrack – electronic animal tracking technology
– Te Mata Estate – premium wine
– Brownrigg Agriculture – Wagyu live cattle
– Rush Munro – gourmet ice cream
– Village Press – olive oil
– ABB – power disaster protection products.
Export New Zealand – Hawke’s Bay
Amanda Liddle
T (06) 835 2528 or 027 705 4668
E Amanda.liddle@eccc.org.nz
Hawke’s Bay Chamber of Commerce
Exporting to China information
Jim Poppelwell
E jim.poppelwell@hawkesbaychamber.co.nz
New Zealand Trade and Enterprise
T 0800 555 888
