The Horizon Of Opportunity
By Melinda Collins
Just as day follows night, recovery follows recession and businesses are eyeing up bold steps to position themselves for the upturn.
And while it’s one thing to pull out of a recession, driving long term productivity is reliant on exporting according to Export New Zealand chief executive Phil O’Reilly.
“Exporting is the most important thing for New Zealand firms to aspire to.
“It comes down to the difference between an almost unlimited global market of billions and a small domestic market of four million. There is a huge global market out there just waiting for great Kiwi goods and services.”
His thoughts are mirrored by EMA Export New Zealand division manager Bruce Goldsworthy, who says until New Zealand increases its export receipts, it won’t really recover from the recession.
“We’ve got to create an awareness of the importance of international business. We need to develop a culture where all New Zealanders understand the importance of exporting.”
So how do you know when you are export-ready? “When you’re meeting domestic targets and at the stage where you believe, for real growth, you have to go beyond a market of four million.”
For most companies looking to export products or services, they need to establish a reasonably strong base in the domestic market first, Goldsworthy says.
“As always, there are exceptions to the rule. “Some products and services lend themselves more to export than domestic markets.”
He says first base is generally the Australian market. “It’s pretty easy for New Zealanders to hop to Australia, look at where their products would sit in the market or where their equivalent products are in the market.”
And with closer economic relations with the country, across the Tasman trade is just getting easier. “It is relatively simple to trade across the Tasman, and it’s a big market for most New Zealand companies when starting out; a market of 22 million – five times the size of our market.”
Access is also simple with easy shipping and air freight.
The next step he says is to research. “You need to do your homework. You need an understanding of the market situation, demand for your product, what the competition is offering, what will get your product to the market and what’s going to give you the edge – design, quality, price or after sale service.
“It’s very important you do your homework on a raft of things from terms of trade, after sale service, the marketing of the product, costings, product delivery and exchange rate movement. You really do need to follow a strong business model. You can’t eliminate all your risks, but you can manage your exposure to them.”
Another significant role in exporting is building relationships, especially when there are evident language and culture barriers.
Goldsworthy says developing a relationship between the seller and buyer is integral and in some countries you won’t get an order until you have established a strong relationship. This is where local business contacts come into play. “It can be hard to get into a new market without local contact.”
Although this sounds daunting, there is a raft of services available from trade and enterprise organisations, overseas trade posts, chambers of commerce and economic trade and investment organisations run through local councils or government. Goldsworthy says some may even provide you with market assessments.
Aside from the organisations available to help, EMA, Export New Zealand, chambers of commerce and tertiary institutes are providing relevant training and courses, there is also a range of publications and websites with information to get you started.
“The first point of call for a company interested in exporting should be the local Export New Zealand branch. Through them you can meet and talk to other people exporting and get you in touch with courses available.”
Case study: Pitango Innovative Cuisine Ltd
Reaping the vast rewards of international markets is Pitango Innovative Cuisine, a fast growing Auckland business which develops and manufactures organic and healthy food products – winner of Best Business Operating Internationally under $10 million in the New Zealand International Business Awards 2009.
The company operates in the chilled segment of the ready to eat market, selling through major supermarkets and exports its entire product range.
As the world’s first carbon neutral fresh food manufacturer, Pitango gained independent carboNZero certification through Landcare Research.
This competitive advantage entails measuring its carbon footprint from supply, processing, shipping products to market, to the refrigerator units products are displayed in. This allows Pitango to move into new markets through distributors who demand carbon disclosure.
The company has also created technology that gives products a longer shelf life than competitors, which allows it to export to distant markets.
The flexibility to respond rapidly to international food trends and adapt products to suit different market tastes has been a major key to international success according to chief executive Wade Gillooly.
Another integral part to export success, he adds, is the strong relationships Pitango builds with international distributors.
“We work very closely with out distributors and consider them our business partners. We have complete transparency and visibility in each other’s business – around tenders, managing stock, new product development – and that creates a really strong relationship.”
Australia currently accounts for almost all Pitango’s export sales, but it is also developing markets in Hong Kong and Singapore.
“Our focus is on ensuring we do our current markets very well and then develop new international markets working within our capabilities.
“Growing internationally is challenging and exciting. You need aspirational goals to push the business forward. My vision is for Pitango to be the leading chilled soup and meals manufacturer in Australasia – we’re almost there – and to grow our horizons into Pacific Rim markets.”