Hot Spots: Trade Trends For The Coming Year

By Melinda Collins

There’s a lot to be said for free trade and its economic covenants. But flipping a coin and throwing product at a reluctant country is unlikely to bode well for anyone. To celebrate a new year and new horizons, Auckland Today went seeking trade trends for 2011.

Europe, the Middle East & Africa

What sectors align well?

New Zealand Trade and Enterprise regional director Anne Chappaz says austerity measures in Europe represent opportunities for ICT and services sectors.

Chappaz, whose areas of responsibility oversee Europe, the Middle East and African territories, says austerity will prompt efficiencies in the public sector, telecommunication and energy fields. Improved performance goes hand in hand with improved efficiencies.

“Health remains of particular interest, as does security. Education reform is a new area of opportunity in the UK. Across all sectors, a product that tells a credible and compelling sustainability story will gain traction more easily,” she says. “In the Middle East, public sector reform is also creating opportunities for consulting, education and IT companies. Construction is showing signs of regaining strength and the wealthy local and expat consumers are welcoming new quality food and beverage products.”

Who should steer clear?

Both Europe and the Middle East are complex regions that Chappaz says are likely to have a market for all industries.

“The challenge is finding the niche and the channel where a specific New Zealand product can be competitive and deliver value and unique benefits.”

Australia

What sectors align well?

NZTE regional director Australia Pacific Michelle Templer says Australia aligns well in general. “The resources and mining boom have generated unprecedented capital infrastructure. The numbers are staggering but the ability to “slice and dice” these large scale, complex and long time frame projects is critical,” she says.

“Sectors that should be looking closely at Australia include, road, rail, port infrastructure and ancillary services, high value manufacturing, and logistics management. There are specific niches around safety and security as well as these continue to be top of mind for investors.”

NZTE offers a special subscription service, ProjectLink, to help connect New Zealand business capability with Australian opportunity in manufacturing sectors.

“We are also seeing real opportunities around processed food products. In 2009 these were valued at NZD$877 million (excluding wine) but they are also growing rapidly.”

Who should steer clear?

Often described as a ‘two speed economy,’ the mining and resources boom contrasts the many independent small business operators finding the vibrant economy challenging. Additionally, the Australian dollar at parity

with the US dollar has had a significant impact on sectors such as export education, tourism and agriculture. “The bottom line is you need to have done your homework on the market to ascertain how your product or solution is going to perform. There are opportunities but you need to find the most profitable and sustainable one,” Templer concludes.

South & Southeast Asia

What sectors align well?

NZTE regional director South and Southeast Asia Alan Koziarski says there are a variety of specific opportunities in these areas. “There is growing demand in the clean technology sector, specialised manufacturing sector and in food and beverage.”

The region is home to a growing middle class, who are increasingly interested in premium products and services that New Zealand is well positioned to supply. “The growth in infrastructure also presents numerous opportunities, particularly in the aviation sector — such as in airport development.”

Who should steer clear?

While there are numerous opportunities available, short term won’t work. “Those who cannot take a long-term approach to developing the market need not apply. Research also needs to be done when considering a market — in some cases tariffs and taxes may preclude companies from exporting such as with meat products to India.”

United States

What sectors align well?

NZTE regional director Marta Mager says the affluent United States sets global trends critical to the success of non-commodity based New Zealand companies. “We are already seeing traction for New Zealand technologies in the US security and public safety markets. New Zealand companies working with NZTE have had significant success with deals secured with the Department of Homeland Security, US Navy, and the US National Guard.”

Mager says increasing pressure for federal and state governments and private healthcare providers to address rising healthcare costs offers opportunities for the New Zealand healthcare and technology sector.

“New investments in energy, water, infrastructure, housing and other sectors of the economy are incorporating longer-term sustainable development principles and offer opportunities for the right New Zealand companies.

“The emergence of a more thoughtful US consumer interested in quality, sustainability and affordable luxury predisposes the market well to many New Zealand consumer product and food and beverage offerings.”

Who should steer clear?

Rather than appraising sectors themselves, in the US, it’s about evaluating the capability of a given New Zealand company and the appropriateness of their offering, Mager says. It’s a large and diverse market, but you must have a unique product/service to compete.

“New Zealand companies should make sure they are prepared to commit fully to their market development. This is not a place for a New Zealand company seeking a short term win. The US market requires long-term investment and capital to reap significant rewards and results.”

South America

What sectors align well?

Mager says the South American market is also one of enormous potential and strong economic growth. New Zealand agritechnology companies (and sub sectors including dairy, sheep meet and pasture management) hold a competitive advantage in South America due, in part to our reputation as a world leader.

Mager says increasing family income levels and strong domestic currencies are opening up opportunities for our consumer goods — primarily in the biggest market Brazil, with its growing middle and upper income population.

Significant opportunities are present with the Brazilian Government’s infrastructure investment preceding hosting of the Football World Cup 2014 and the 2016 Olympic Games.

Investments equivalent to more than New Zealand $200 billion will be made in energy, telecommunications, sanitation and logistics. Investments equivalent to more than New Zealand $300 billion will be made in areas such as public transportation, drainage, energy, logistics, roads and civil construction.”

Who should steer clear?

Again, there is no right or wrong industry when it comes to South America, but the market is challenging and still relatively unexplored from a New Zealand perspective. “New Zealand businesses looking towards South America tend to be stepping outside their traditional markets. Companies should seek informed advice before entering the South American market. Don’t underestimate the difficulty and commitment needed for this market but equally don’t underestimate the rewards!”

China

What sectors align well?

NZTE regional director China Tim Green says key New Zealand industries such as seafood, wine, other safe and high quality food types (especially dairy and kiwifruit) have opened up due to increased food hygiene awareness.

Greater focus on agricultural processing and its role in the food supply chain and an increase in farm/herd sizes (particularly dairy and beef) have opened up opportunities in agricultural technology, he says.

High value technology and manufacturing industries have opened due to China’s insatiable appetite for technology and innovation, and a government focus on “pillar” industries (aviation, telecoms and resources). Key growth sectors which match New Zealand include aviation services, airport infrastructure, telecommunications equipment and services, communications and geospatial technology, supporting software, electronics,  environmental products and services.

Who should steer clear?

Green says any industry that fails to offer Chinese consumers something to distinguish itself from local (or foreign) competition should steer clear. “While there are opportunities for pretty much any industry in China, it’s still highly competitive and homework needs to go into defining the specific target — usually niche — that New Zealand industries can compete in.”

Author: magazinestoday

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