Food is a substance that holds cultures together. Common foods unify and define countries and regions. However, a food that one group considers a delicacy,
another group may find offensive. The French have long been called "frogs" because of their taste for the amphibians. The English once were sneered upon
as "beefsteak" because of their trend-setting use of cattle, and in the Philippines at least one tribe is nicknamed "dogeaters."
The name Dogeaters has not been confined to the Philippines, however.
The summer 1988 Seoul Olympics focused the world's attention on South Korea. One aspect of Korean cuisine the government preferred not to have spotlighted
was the use of dog meat. A dog stew, called Poshintang, is commonly available in restaurants in Seoul and the rest of the country. As an ingredient, dog
is not as ubiquitous as beef is in the U.S.; it is considered to be something of a delicacy. Traditionally, it has been a seasonal favorite, most popular
in the summer. Dogmeat is also purported to be effective as a male stimulant, increasing sexual stamina, even though there is no scientific literature
to support this claim.
Even before the Olympics, there was concern that foreign visitors to Seoul might be offended by restaurants offering dog meat. The Ministry of Health and
Welfare ordered measures to prevent such a conflict. In 1986, a ban was placed on the sale of dog meat as an "unseemly" food. The practical result was
that most restaurants in city limits replaced signs offering dog meat with smaller, less conspicuous versions, or they renamed the dish to "health stew."
This did not prevent criticism. "How can a nation that will cheerfully eat its best friend be relied upon to host a small dinner party, let alone the Olympic
Games?"
In spite of this kind of pressure, dog meat sales continue. There are plans to open two dog slaughterhouses on Chejun Island, 450 km south of Seoul.
One
entrepreneur has opened a chain of dog meat restaurants. China Trading, the company behind the new restaurant chain, estimates there are now about 20,000
dog meat restaurnats throughout the country. It says one restaurant can rack up sales of 10 million won (about US$6020) a day during peak dog eating season
from April to July.
In the U.S., the estimated number of animals euthanized ranges from 6-150 million per year. If half of the number is composed of dogs, that leaves a lot
of potential meat to be exported. Legally, the only barrier would be the Animal Welfare Act, a federal law that covers any "live or dead dog, cat, nonhuman
primate, guinea pig, hamster, rabbit, or any other warm-blooded animal which is being used, or is intended for use for research, teaching, testing, experimentation
or exhibition purposes. The USDA interprets the act to exclude birds, rats, and mice bred for research, and horses and other farm animals, such as livestock
and poultry, used or intended for use as food or fiber." It is conceivable that dogs raised as livestock would be excluded as well, once it is established
that they are being raised as food.
Another rule governing the trade of livestock is the "Twenty- Eight Hour Law" which simply outlines minimum guidelines for the care of animals as they are
transported to market. There are certain feed, space, and water requirements if the transit time exceeds a twenty-eight hour period. If the dogs were slaughtered
in the U.S., that would eliminate concerns about these regulations. Shipping meat instead of live animals also avoids the problems associated with the
quarantine of live animals.
Even though the dog meat market does not seem to be growing at a fast rate, it is conceivable that American exporters could make inroads in a niche market.
The breed of dog that is farm- raised in Korea and China is a large dog similar in appearance to the German Shepherd. It is difficult to say whether the
variety of breeds in the U.S. would be considered suitable choices for the dog meat market abroad. Market research would need to be done.
Initially, it appears that there may be enough demand to support dog meat export, however, the impediments must be overcome. The voice of the American citizen
is one factor that should not be underestimated. Grass roots lobbying has great potential to raise public awareness against export efforts. Boycotts of
company family products has the potential to eliminate economic gains realized from coordinated dog exports.
Because the concept of sending dogs overseas to be eaten may be distasteful, it is helpful to examine the current status of unwanted dogs to gauge our attitudes
towards the situation.
The SF SPCA claims to be the only public animal shelter with a no-kill policy. They euthanize an animal only if it is suffering from an incurable illness.
The policy of other shelters is to "put down" animals if no one claims them after a certain period, which differs in each jurisdiction.
The result is millions of pounds of flesh to be dealt with. Some of it enters landfills where it eventually decomposes. A small amount of dogs are buried
in pet cemeteries. The rest are "recycled."
Rendering plants process the carcasses for use in dog food and as feed for other animals. "In addition, some 40 billion pounds of year of slaughterhouse
wastes like blood, bone, and viscera, as well as the remains of millions of euthanized cats and dogs passed along by veterinarians and animal shelters,
are rendered annually into livestock feed - in the process turning cattle and hogs, which are natural herbivores, into unwitting carnivores." (U.S. News
& World Report, Sept. 1, 1997 p.23)
Tuesday, August 17, 2010
Petroleum Industry of India
The development of the Indian petroleum industry began on a very slow note. It started mainly in the northeastern part of India especially in the place called Digboi in the state of Assam. Until the 1970's, the production of petroleum and the exploration of new locations for extraction of petroleum were mainly restricted to the northeastern state in India.
However, an important advancement in the Indian petroleum industry came with the passing of Industrial Policy Resolution in 1956, which emphasized focus on the growth and promotion of industries in India. Another major incident was the discovery of Bombay High, which changed the scenario of the Indian petroleum industry drastically. The Indian petroleum industry was sponsored completely by the government, and the management control of the petroleum industry and all its related activity was entirely with the government. The petroleum industry has the most significant role to play in changing the Indian economy from an agrarian economy to an industrial economy.
The adoption of liberalization and privatization in July 1991 changed the situation again. The government started allowing the Indian petroleum industry to go into private hands and also entered into government and private joint ventures. The government also eased the stringent regulation process on the petroleum sector. This gave a tremendous boost to the this industry. The industry began to grow at a tremendous pace. The production of petroleum and petroleum products also showed a significant rise.
Along with liberalization and privatization, the overall economy of India grew. Also, the demand for petroleum products increased at an annual rate of about 5.5%. The demand for petroleum and petroleum products still continues to grow, and there is great potential for investors to invest in India in the sector and gain valuable returns while meeting the increasing demands for the petroleum products.
The petroleum sector in India is particularly favorable for foreign investment because the industry is one of the fastest growing segments, and it has shown a staggering growth rate of around 13% in the recent past. Apart from the tremendous growth rate in the Indian petroleum industry today, it also boasts technology of international standards, easy availability of infrastructure at very cheap rates, high demands for petroleum products, and increased spending habits of the middle-class people. All these factors make investments in the Indian petroleum sector an attractive proposition for foreign investors.
The foreign trade in petroleum and petroleum products in the recent past have registered significant growth. It has thus attracted new foreign investments. Some of the main petroleum products that are manufactured for trade with foreign countries are petroleum gases, gas oil, propane, distilled crude oil, naphtha, ethane, and kerosene.
The petroleum industry has contributed heavily to the manufacturing industry in the country through foreign trade in petroleum products. Rapid globalization, fast-changing technology, and the changing methods in the way business is conducted have brought significant changes and enormous opportunities for petroleum companies in India to flourish and expand their operation to global markets.
However, an important advancement in the Indian petroleum industry came with the passing of Industrial Policy Resolution in 1956, which emphasized focus on the growth and promotion of industries in India. Another major incident was the discovery of Bombay High, which changed the scenario of the Indian petroleum industry drastically. The Indian petroleum industry was sponsored completely by the government, and the management control of the petroleum industry and all its related activity was entirely with the government. The petroleum industry has the most significant role to play in changing the Indian economy from an agrarian economy to an industrial economy.
The adoption of liberalization and privatization in July 1991 changed the situation again. The government started allowing the Indian petroleum industry to go into private hands and also entered into government and private joint ventures. The government also eased the stringent regulation process on the petroleum sector. This gave a tremendous boost to the this industry. The industry began to grow at a tremendous pace. The production of petroleum and petroleum products also showed a significant rise.
Along with liberalization and privatization, the overall economy of India grew. Also, the demand for petroleum products increased at an annual rate of about 5.5%. The demand for petroleum and petroleum products still continues to grow, and there is great potential for investors to invest in India in the sector and gain valuable returns while meeting the increasing demands for the petroleum products.
The petroleum sector in India is particularly favorable for foreign investment because the industry is one of the fastest growing segments, and it has shown a staggering growth rate of around 13% in the recent past. Apart from the tremendous growth rate in the Indian petroleum industry today, it also boasts technology of international standards, easy availability of infrastructure at very cheap rates, high demands for petroleum products, and increased spending habits of the middle-class people. All these factors make investments in the Indian petroleum sector an attractive proposition for foreign investors.
The foreign trade in petroleum and petroleum products in the recent past have registered significant growth. It has thus attracted new foreign investments. Some of the main petroleum products that are manufactured for trade with foreign countries are petroleum gases, gas oil, propane, distilled crude oil, naphtha, ethane, and kerosene.
The petroleum industry has contributed heavily to the manufacturing industry in the country through foreign trade in petroleum products. Rapid globalization, fast-changing technology, and the changing methods in the way business is conducted have brought significant changes and enormous opportunities for petroleum companies in India to flourish and expand their operation to global markets.
How to Export Clothing to Nigeria
Nigeria is experiencing an economic boom. The combination of this past year's run up in oil prices, and a sweeping government reform aimed at eradicating corruption, has helped the economy in Nigeria prosper.
The economic betterment of Nigeria has lead to a direct increase in the prosperity of its expanding middle class.
With a growing banking, oil, and tourism sector, the trickle down effect has put more money into the pockets of the Nigerian middle class.
The middle class, comprised of fashion conscious consumers, is using its new found spending power to purchase brand name clothing.
While the clothing market in Nigeria is saturated by Chinese manufactured clothing, there is a scarcity of American brand names.
An exporter, whether a single individual bringing clothing to Nigeria, or a large established apparel wholesaler, can make a good deal of money by supplying brand name clothing to Nigeria.
Currently, Nigerian consumers are seeking out well known American brands such as Polo Ralph Lauren, Tommy Hilfiger, Calvin Klein, and other internationally recognizable brands.
The Nigerian market has a well developed media sector, which has the spread the popularity of American brand names to the far reaches of the country.
Supplying these lucrative brand names to Nigeria is feasible when the clothing exporter understands the market.
Because using shipping services such as UPS, Fed Ex, and DHL can be expensive, the use of a freight forwarder is highly recommended.
Freight forwarders aggregate shipments from various senders, and through their bargaining power are able to offer shippers a much lower shipping rate.
Another advantage of using a Nigerian freight forwarder is that they can clear the apparel through customs on behalf of the sender.
What is perhaps even more helpful to exporters dealing with the Nigerian market, is their freight collect services.
Payment for the shipping is made by the customer when he or she picks up the order from the shipper's Nigerian office.
Some of the freight forwarders also offer direct shipping to the customer's residence or place of business.
For people sending clothing to Nigeria, where the shipment is relatively small, the US Postal Service can be used.
But while a freight forwarder might charge as low as $2.90 per pound, the US Postal Service charges close to $6 per pound.
Most freight forwarders have a minimum of 60 pounds, while the US Postal Service has no minimum shipping requirements.
Which ever option you use, it is highly recommended that the clothing exporter feels comfortable with the shipping service.
If you are using the freight forwarder for the first time, feel comfortable in asking them for references.
Companies such as Grandbelle International and Express Air Freight Unlimited, are able to ship and clear orders for Nigeria, on a freight collect basis, which makes them ideal for business to business transactions.
While sellers might be concerned due to media reports concerning fraud, payment for the merchandise can easily be done by wire transfer, since Nigeria has a sophisticated and well developed banking system.
From my experience, the majority of Nigerian business people are hard working and honest, and I would not allow a few negative stories to distort the perception to what are otherwise honest people.
If you are a clothing wholesaler or exporter, and you are looking for a market with a strong appetite for high quality brand name clothing, then Nigeria might be the perfect market for you.
The economic betterment of Nigeria has lead to a direct increase in the prosperity of its expanding middle class.
With a growing banking, oil, and tourism sector, the trickle down effect has put more money into the pockets of the Nigerian middle class.
The middle class, comprised of fashion conscious consumers, is using its new found spending power to purchase brand name clothing.
While the clothing market in Nigeria is saturated by Chinese manufactured clothing, there is a scarcity of American brand names.
An exporter, whether a single individual bringing clothing to Nigeria, or a large established apparel wholesaler, can make a good deal of money by supplying brand name clothing to Nigeria.
Currently, Nigerian consumers are seeking out well known American brands such as Polo Ralph Lauren, Tommy Hilfiger, Calvin Klein, and other internationally recognizable brands.
The Nigerian market has a well developed media sector, which has the spread the popularity of American brand names to the far reaches of the country.
Supplying these lucrative brand names to Nigeria is feasible when the clothing exporter understands the market.
Because using shipping services such as UPS, Fed Ex, and DHL can be expensive, the use of a freight forwarder is highly recommended.
Freight forwarders aggregate shipments from various senders, and through their bargaining power are able to offer shippers a much lower shipping rate.
Another advantage of using a Nigerian freight forwarder is that they can clear the apparel through customs on behalf of the sender.
What is perhaps even more helpful to exporters dealing with the Nigerian market, is their freight collect services.
Payment for the shipping is made by the customer when he or she picks up the order from the shipper's Nigerian office.
Some of the freight forwarders also offer direct shipping to the customer's residence or place of business.
For people sending clothing to Nigeria, where the shipment is relatively small, the US Postal Service can be used.
But while a freight forwarder might charge as low as $2.90 per pound, the US Postal Service charges close to $6 per pound.
Most freight forwarders have a minimum of 60 pounds, while the US Postal Service has no minimum shipping requirements.
Which ever option you use, it is highly recommended that the clothing exporter feels comfortable with the shipping service.
If you are using the freight forwarder for the first time, feel comfortable in asking them for references.
Companies such as Grandbelle International and Express Air Freight Unlimited, are able to ship and clear orders for Nigeria, on a freight collect basis, which makes them ideal for business to business transactions.
While sellers might be concerned due to media reports concerning fraud, payment for the merchandise can easily be done by wire transfer, since Nigeria has a sophisticated and well developed banking system.
From my experience, the majority of Nigerian business people are hard working and honest, and I would not allow a few negative stories to distort the perception to what are otherwise honest people.
If you are a clothing wholesaler or exporter, and you are looking for a market with a strong appetite for high quality brand name clothing, then Nigeria might be the perfect market for you.
IC-DISC Export Subsidy Gives You at Least 10% More Profits on US Exports
Exporters of U.S. made goods can get a free tax benefit equal to 10% or more of the profit on sales of those goods. This subsidy is available to manufacturers and distributors using an IC-DISC. It is available to non-public U.S. companies organized as C corporations, S corporations, partnerships, LLCs and sole proprietors.
Here's how it works. The business entity (or the shareholders for a C corporation) forms a U.S. corporation which makes an election to be treated as a Domestic International Sales Corporation (DISC, often called an IC-DISC). The DISC and the business entity enter into appropriate agreements under which the business entity agrees to pay the DISC a commission on export sales for doing nothing. The DISC has no employeees or assets. The business entity gets a full deduction for the commission. The DISC is tax exempt on qualifying commission income. It then pays a dividend to the shareholder(s). The ultimate individual shareholders pay tax at capital gains rates on this qualifying dividend. This provides a Federal rate differential of up to 20%.
The DISC commission is limited to the greater of 4% of qualifying sales or 50% of net taxable income from qualifying sales. Qualifying sales includes profitable sales for use outside the U.S. of goods made in the U.S. The goods can be made by anyone, provided the non-U.S. content is less than 50% of the total sales price and the last part of the manufacturing is done in the U.S. However, sales made before the DISC exists can't produce DISC benefits.
DISC commissions can be improved significantly under IRS rules. The commission is allowed only on profitable sales, so expenses related to loss sales are excluded in computing the 50% of profits limit. This "no loss" rule alone can often nearly double the tax savings. Taxpayers may electively use an overall profit percentage or a technique called "marginal costing" to improve the result. Other IRS approved techniques for improving the result also exist. These techniques increase the cost of making the calculation, but can greatly increase the tax benefit.
DISC is NOT cutting edge, aggressive, or risky. It works. 1,200 companies took advantage of it in 2006 according to IRS statistics and many more have since. The Bush administration tried to get it repealed, and Congress said they wanted to keep it. There's no current repeal proposal being given serious consideration. The Obama administration has proposed keeping DISC and the rate differential. How long will DISC benefits last? Even the best crystal balls don't have that answer.
Getting the agreements and calculations done in a manner that optimizes benefits requires experience. The DISC must also file a tax return each year, and Form 1120-IC-DISC is quite different than a regular corporate return.
If your company exports U.S. made goods, DISC can probably help you, but you need help to set up DISC right. A new corporation is needed, since the DISC election must be made at the start of a year. Also, the DISC and the business entity must have the appropriate agreements in place, and the DISC should have an "evergreen" dividend resolution.
Here's how it works. The business entity (or the shareholders for a C corporation) forms a U.S. corporation which makes an election to be treated as a Domestic International Sales Corporation (DISC, often called an IC-DISC). The DISC and the business entity enter into appropriate agreements under which the business entity agrees to pay the DISC a commission on export sales for doing nothing. The DISC has no employeees or assets. The business entity gets a full deduction for the commission. The DISC is tax exempt on qualifying commission income. It then pays a dividend to the shareholder(s). The ultimate individual shareholders pay tax at capital gains rates on this qualifying dividend. This provides a Federal rate differential of up to 20%.
The DISC commission is limited to the greater of 4% of qualifying sales or 50% of net taxable income from qualifying sales. Qualifying sales includes profitable sales for use outside the U.S. of goods made in the U.S. The goods can be made by anyone, provided the non-U.S. content is less than 50% of the total sales price and the last part of the manufacturing is done in the U.S. However, sales made before the DISC exists can't produce DISC benefits.
DISC commissions can be improved significantly under IRS rules. The commission is allowed only on profitable sales, so expenses related to loss sales are excluded in computing the 50% of profits limit. This "no loss" rule alone can often nearly double the tax savings. Taxpayers may electively use an overall profit percentage or a technique called "marginal costing" to improve the result. Other IRS approved techniques for improving the result also exist. These techniques increase the cost of making the calculation, but can greatly increase the tax benefit.
DISC is NOT cutting edge, aggressive, or risky. It works. 1,200 companies took advantage of it in 2006 according to IRS statistics and many more have since. The Bush administration tried to get it repealed, and Congress said they wanted to keep it. There's no current repeal proposal being given serious consideration. The Obama administration has proposed keeping DISC and the rate differential. How long will DISC benefits last? Even the best crystal balls don't have that answer.
Getting the agreements and calculations done in a manner that optimizes benefits requires experience. The DISC must also file a tax return each year, and Form 1120-IC-DISC is quite different than a regular corporate return.
If your company exports U.S. made goods, DISC can probably help you, but you need help to set up DISC right. A new corporation is needed, since the DISC election must be made at the start of a year. Also, the DISC and the business entity must have the appropriate agreements in place, and the DISC should have an "evergreen" dividend resolution.
Wooden Pallets For Export - Making Sense of Bark Restriction ISPM-15 Mandate
The latest bark restrictions that countries around the world have or are in various stages of adopting under the ISPM-15 Standard are simply described as follows.
Your Wood Packaging Material (WPM) - crates, pallets, dunnage do not need to be 100% bark free - the limits of how much bark can be on each component (that's key - not on the entire assembly; this refers to the allowable amount of bark on each particular component/piece) are described with two statements:
1) Less than 3 cm (yes that's metric for 1.18 inches) in width, regardless of length - so you can have a piece of lumber on your crate or pallet that's 120 feet long and has a strip of bark that's up to but not over 1.18" wide and running the entire length of the component and you are within the boundaries of the ISPM-standard.
2) If the bark on your component (again it's by piece/component - not the entire crate or pallet or assembly) is greater than 3 cm in width (1.18 inches), the total surface area of an individual piece of bark must be less than 50 square centimeters (there's the metric system again - 7.75 square inches) or roughly the size of a credit card. To calculate the area of bark simply multiply the length by the width and there you have the square centimeters (area).
There are tools supplied by various organizations involved with the lumber and inspection industries that can make this an easy task for persons within your organization that work with your organization's pallets, crates, or dunnage meant for export. You can find them by doing an online search for "bark measurement tool."
While I have your attention, other important questions that usually come up related to the subject of export restrictions on WPM are sampled here - but please don't hesitate to contact me directly if I can be of further help.
What does ISPM15 stand for?
The International Standards for Phytosanitary Measures Guidelines for Regulating Wood Packaging Material in International Trade (ISPM15) is one of several International Standards for Phytosanitary Measures adopted by the International Plant Protection Convention (IPPC). The IPPC is an international treaty to secure action to prevent the spread and introduction of pests of plants and plant products, and to promote appropriate measures for their control. ISPM15 is a standard on which many countries WPM regulations are based upon.
What constitutes Wood Packaging Material (WPM)?
Wood packaging material or WPM is also known as Non-Manufactured Wood Packing (NMWP), Solid Wood Packing Material (SWPM) - hardwood and softwood packaging other than that comprised entirely of wood-based products such as plywood, particle board, oriented strand board, veneer, wood wool, etc., which has been created using glue, heat, and pressure or a combination thereof used in supporting, protecting or carrying a commodity (includes dunnage)." Plywood is engineered product that are NOT included in this concern and are considered "export ready" products.
Some examples of WPM include: pallets, crates, containers, boxes, reels, drums, and dunnage. Another tricky part of the standard is that any WPM comprised of exempt materials BUT combined with solid wood components must still be treated and marked. So, it doesn't matter if all that's showing on your crate is plywood - if there are lumber pieces (a frame) inside the assembly then you must treat and properly stamp the assembly in order to avoid costly problems (quarantines) with your product shipments.
Your Wood Packaging Material (WPM) - crates, pallets, dunnage do not need to be 100% bark free - the limits of how much bark can be on each component (that's key - not on the entire assembly; this refers to the allowable amount of bark on each particular component/piece) are described with two statements:
1) Less than 3 cm (yes that's metric for 1.18 inches) in width, regardless of length - so you can have a piece of lumber on your crate or pallet that's 120 feet long and has a strip of bark that's up to but not over 1.18" wide and running the entire length of the component and you are within the boundaries of the ISPM-standard.
2) If the bark on your component (again it's by piece/component - not the entire crate or pallet or assembly) is greater than 3 cm in width (1.18 inches), the total surface area of an individual piece of bark must be less than 50 square centimeters (there's the metric system again - 7.75 square inches) or roughly the size of a credit card. To calculate the area of bark simply multiply the length by the width and there you have the square centimeters (area).
There are tools supplied by various organizations involved with the lumber and inspection industries that can make this an easy task for persons within your organization that work with your organization's pallets, crates, or dunnage meant for export. You can find them by doing an online search for "bark measurement tool."
While I have your attention, other important questions that usually come up related to the subject of export restrictions on WPM are sampled here - but please don't hesitate to contact me directly if I can be of further help.
What does ISPM15 stand for?
The International Standards for Phytosanitary Measures Guidelines for Regulating Wood Packaging Material in International Trade (ISPM15) is one of several International Standards for Phytosanitary Measures adopted by the International Plant Protection Convention (IPPC). The IPPC is an international treaty to secure action to prevent the spread and introduction of pests of plants and plant products, and to promote appropriate measures for their control. ISPM15 is a standard on which many countries WPM regulations are based upon.
What constitutes Wood Packaging Material (WPM)?
Wood packaging material or WPM is also known as Non-Manufactured Wood Packing (NMWP), Solid Wood Packing Material (SWPM) - hardwood and softwood packaging other than that comprised entirely of wood-based products such as plywood, particle board, oriented strand board, veneer, wood wool, etc., which has been created using glue, heat, and pressure or a combination thereof used in supporting, protecting or carrying a commodity (includes dunnage)." Plywood is engineered product that are NOT included in this concern and are considered "export ready" products.
Some examples of WPM include: pallets, crates, containers, boxes, reels, drums, and dunnage. Another tricky part of the standard is that any WPM comprised of exempt materials BUT combined with solid wood components must still be treated and marked. So, it doesn't matter if all that's showing on your crate is plywood - if there are lumber pieces (a frame) inside the assembly then you must treat and properly stamp the assembly in order to avoid costly problems (quarantines) with your product shipments.
Basic Modes of Shipment Used in Export Business
In order to supply their products to the customers, wholesalers and trade suppliers have to choose among various shipment methods. They normally consider some factors before settling on the shipping mode. These factors are:
i. Business Size
ii. Cost
iii. Safety
iv. Delivery Time
v. Goods to be delivered
A shipment method will be evaluated by following characteristics.
i. Speed
ii. Cost
iii. Safety
iv. Convenience
Different methods have different positives and negatives. Some are safer, some really fast and others have a plus point of being inexpensive. You can choose any of the methods discussed below which suits your requirements.
Air transport:
This method is by far the fastest and much safer, unless you are offering some electronic product or service online which can be downloaded in real time. Despite of being safe and fast, suppliers (specially the small ones) are often reluctant to use this mode, mainly because of high cost associated with it. This should be helpful when delivering some valuable goods or when a quick delivery is needed.
Water Transport:
Most probably the oldest method used in trade for overseas supplies. In ancient times traders traveled by means of water, carrying several goods and products to sell in foreign countries. Inexpensive but relatively slow, certainly not a good choice when quick delivery is needed. However, when the time is not an issue and shipment is quite large, maritime transportation becomes an automatic choice.
Road Transport:
This is the most widely used method, especially in domestic trade. Even when air or water transport is the prime source of shipment, road transportation is still needed to carry the goods from ports to buyer. Although limited to domestic trade, this method is both time saving and cost effective.
Additional Methods:
There are some other rarely used methods like rail cars, or a combination of two or more of these. Another form of shipment rising out of the internet growth is electronic shipment which takes place on internet in no time after the customer has made payment.
It is not always easy to choose a method over the others. You can start by considering the questions like these. What do you want to deliver? Do you need to fulfill an urgent order? Can you afford some expensive medium without sacrificing a big part of your profit? If you are delivering some food items, can they be preserved for longer period? The best selection entirely depends on careful evaluation.
i. Business Size
ii. Cost
iii. Safety
iv. Delivery Time
v. Goods to be delivered
A shipment method will be evaluated by following characteristics.
i. Speed
ii. Cost
iii. Safety
iv. Convenience
Different methods have different positives and negatives. Some are safer, some really fast and others have a plus point of being inexpensive. You can choose any of the methods discussed below which suits your requirements.
Air transport:
This method is by far the fastest and much safer, unless you are offering some electronic product or service online which can be downloaded in real time. Despite of being safe and fast, suppliers (specially the small ones) are often reluctant to use this mode, mainly because of high cost associated with it. This should be helpful when delivering some valuable goods or when a quick delivery is needed.
Water Transport:
Most probably the oldest method used in trade for overseas supplies. In ancient times traders traveled by means of water, carrying several goods and products to sell in foreign countries. Inexpensive but relatively slow, certainly not a good choice when quick delivery is needed. However, when the time is not an issue and shipment is quite large, maritime transportation becomes an automatic choice.
Road Transport:
This is the most widely used method, especially in domestic trade. Even when air or water transport is the prime source of shipment, road transportation is still needed to carry the goods from ports to buyer. Although limited to domestic trade, this method is both time saving and cost effective.
Additional Methods:
There are some other rarely used methods like rail cars, or a combination of two or more of these. Another form of shipment rising out of the internet growth is electronic shipment which takes place on internet in no time after the customer has made payment.
It is not always easy to choose a method over the others. You can start by considering the questions like these. What do you want to deliver? Do you need to fulfill an urgent order? Can you afford some expensive medium without sacrificing a big part of your profit? If you are delivering some food items, can they be preserved for longer period? The best selection entirely depends on careful evaluation.
Add Extra Value to Garment Export Business!
Globalization has put forth India's business community in the international market. Various foreign trade policies and investment policies have been framed to facilitate foreign trade and increase the profitability of the Indian garment manufacturers. The advent of liberal trade policies in textile and garments sector have made it possible of usage of modern technologies and international methods of manufacturing clothes. This sector of garments is one of the most successful and important in terms of foreign exchange generation and employment generating field. It provides employment to lakhs of people and is the most sort out and booming industry of India.
The Indian textile and garment industry is completely independent on itself i.e. from fibre manufacturing to the finished garments without sourcing it from other countries. India is becoming the most preferred destination for sourcing readymade garments for the international market. Various garment export companies are coming up with clothes that are fashionable keeping international trend in mind and also of good quality. Many international brands also source readymade garments from Indian market.
The capitalization in various garment manufacturing arenas is increasing like- manpower, cotton production, multi-fiber production, etc. The Indian garment export graph is witnessing a steep rise since last few years which is a positive reinforcement for Indian exporters and foreign buyers. India is being seen as the next pioneer country in readymade garment export business. Foreseeing the present booming fashion industry, the foreign buyers are showing interest in doing business with Indian exporters. Therefore it becomes mandatory for exporters to constantly present variation in designs and patterns in garments with quality maintenance.
Free trade scenario has been created in the Indian market, which has resulted cut throat competition among the manufactures and exporters for various things like quality, raw material base, manpower, cost of inputs, etc. required for garment making. To sustain the competition various steps are to be taken, the foremost one is to imbibe the latest manufacturing and production technologies. The importance of merchandising has increased as it helps in generating high dividends. Branding and presenting diversified products is a value addition for the companies in order to conquer the global market.
The pre-set properties associated with various types of garments are being combined with each other to produce enhanced product of high quality. Like the amalgamation of artistry of traditional clothes with the high performance of technical textiles is one such innovation. For e.g.- wrinkle-free trousers with anti microbial finish, low maintenance, stain resistant is an example of combination of technical textiles with traditional clothes. This is a value addition to the garment. Special technologies are used to add such added attribute to a particular garment.
Many value additions can enhance the garments exports and profitability:
Effect of the vision
The first and foremost thing which attracts to a garment is its look. Apart from the prints and accessories used on the garment there are many other things which make the look of the garment appealing to the eyes. The finishing of the garment, dyes used, its weave, its shine, yarn patterns, etc effect the overall appearance. For instance- simple cotton shirt in comparison to wrinkle-free cotton shirt would be having less visual appeal.
Effect of the senses
The clothes that have comforting effect on human senses are a value added benefit. Certain properties are the fragrances of the garment, the energy boosting quality, smoothness, compression, etc are a few technological value additions that can be added to the garment.
Wearer's comfort
One of the most important factor while choosing a garment is its comfort level experienced by the wearer. The warmth effect, softness, moisture absorbing quality, clinging minimization, durability, etc affects the wearers comfort level.
Easy maintenance
The garments which are easy to maintain gets more preference. Some of the easy care properties are minimum iron, easy wash, stain resistant, anti soiling, moth proofed, etc. These are certain characteristics of the garment which makes them easy to maintain.
Garment Formation
The procedure for garment manufacturing has become easier due to advanced finishing technologies. Such advancement makes the overall garment making process simpler, the garment stays in its initial shape which increases customer contentment and sales too.
The Indian textile and garment industry is completely independent on itself i.e. from fibre manufacturing to the finished garments without sourcing it from other countries. India is becoming the most preferred destination for sourcing readymade garments for the international market. Various garment export companies are coming up with clothes that are fashionable keeping international trend in mind and also of good quality. Many international brands also source readymade garments from Indian market.
The capitalization in various garment manufacturing arenas is increasing like- manpower, cotton production, multi-fiber production, etc. The Indian garment export graph is witnessing a steep rise since last few years which is a positive reinforcement for Indian exporters and foreign buyers. India is being seen as the next pioneer country in readymade garment export business. Foreseeing the present booming fashion industry, the foreign buyers are showing interest in doing business with Indian exporters. Therefore it becomes mandatory for exporters to constantly present variation in designs and patterns in garments with quality maintenance.
Free trade scenario has been created in the Indian market, which has resulted cut throat competition among the manufactures and exporters for various things like quality, raw material base, manpower, cost of inputs, etc. required for garment making. To sustain the competition various steps are to be taken, the foremost one is to imbibe the latest manufacturing and production technologies. The importance of merchandising has increased as it helps in generating high dividends. Branding and presenting diversified products is a value addition for the companies in order to conquer the global market.
The pre-set properties associated with various types of garments are being combined with each other to produce enhanced product of high quality. Like the amalgamation of artistry of traditional clothes with the high performance of technical textiles is one such innovation. For e.g.- wrinkle-free trousers with anti microbial finish, low maintenance, stain resistant is an example of combination of technical textiles with traditional clothes. This is a value addition to the garment. Special technologies are used to add such added attribute to a particular garment.
Many value additions can enhance the garments exports and profitability:
Effect of the vision
The first and foremost thing which attracts to a garment is its look. Apart from the prints and accessories used on the garment there are many other things which make the look of the garment appealing to the eyes. The finishing of the garment, dyes used, its weave, its shine, yarn patterns, etc effect the overall appearance. For instance- simple cotton shirt in comparison to wrinkle-free cotton shirt would be having less visual appeal.
Effect of the senses
The clothes that have comforting effect on human senses are a value added benefit. Certain properties are the fragrances of the garment, the energy boosting quality, smoothness, compression, etc are a few technological value additions that can be added to the garment.
Wearer's comfort
One of the most important factor while choosing a garment is its comfort level experienced by the wearer. The warmth effect, softness, moisture absorbing quality, clinging minimization, durability, etc affects the wearers comfort level.
Easy maintenance
The garments which are easy to maintain gets more preference. Some of the easy care properties are minimum iron, easy wash, stain resistant, anti soiling, moth proofed, etc. These are certain characteristics of the garment which makes them easy to maintain.
Garment Formation
The procedure for garment manufacturing has become easier due to advanced finishing technologies. Such advancement makes the overall garment making process simpler, the garment stays in its initial shape which increases customer contentment and sales too.
China's Automobile Industry - Insight Into Vehicles and Parts Market
In 2007, automobile sales witnessed a satisfactory year in China. After the depression in 2005, the automobile market steadily develops with a prospective tendency: the sales of medium and high grade passenger cars and urban SUV will maintain high growth; commercial passenger car industry will also steadily develop; however, the general growth rate of commercial freight vehicles will decrease, and the opportunity lies in products upgrading and export.
Affecting and supporting factors in 2008
In 2008, automobile industry will face affecting factors including energy-saving environmental policy, levying of petroleum tax, unification of domestic and foreign enterprise taxes, high-price petroleum and development of new energy etc. Thus automobile sub-industries will face new opportunities and challenges.
Formation of a new consumer group and the obvious consumption upgrade trend are the backgrounds for a steadily developing passenger cars market, while GDP, fix asset investments and new rural construction factors are the supporting factors for commercial freight vehicles stable growth. Demographic dividend, tourism boom and expressway expansion are the forces to maintain constant development of commercial passenger cars. In the automobile industry, there are passenger cars as discretionary consumer products, as well as commercial vehicles with capital goods purpose. Each branch industries will undergo a development stage where opportunity and challenge co-exist, meanwhile, the leading enterprises of automobile parts will also have enormous opportunities. Therefore upstream leading automobile parts merchants in the automobile industry chain will embrace a high-speed development stage.
Growth numbers
Presently the average per-capita auto number is three cars per a hundred persons in China. According to the internationally accepted automobile popularizing stage division, China is in the "early stage of motorization". Nevertheless, due to distinctive urban-rural dual structure in China and the different development level between urban and suburban districts, per-capita auto number is twenty cars per hundred persons in tier one cities, where the automobile consumption is in a "stage of motorization". It is estimated that most cities of China will remain in this stage for a long period.
As of October 2007, automobile sales reached 7,150,000 cars in China, a year-on-year accumulated increase of 24%. Among this number, passenger cars sales were 5,079,400, with a year-on-year accumulated increase of 23.75%, while commercial vehicles sales were 2,070,000, with a year-on-year accumulated increase of 25.14%. Firstly, let's look at the short-term sales trend of various car types.
Since 2002, annual sales of passenger cars have cross the million line in China, achieving a high-speed growth for five years. At the end of 2007, it is estimated that sales will reach six million cars. Considering great economic difference among regions in China, the main development engine for the automobile industry is the existing customer's replacement demand and new user's first purchasing demand.
Passenger cars
Brand competition between passenger cars is fierce. Currently passenger cars brands total about 340 in China, and the annual average sales per brand is 17,000 this year, a year-on-year decrease of 45% for passenger cars brands. The reason is that passenger cars market exhibits brand disorder and excessive small enterprises, which is also related to the consumption feature of passenger cars in China.
Passenger cars, as the consumption segment of automobile industry, have an incomparable market potential to the buses and freight vehicles. In the car segment, we think high-grade brand sales will be stable, while competition in medium-grade market will be vigorous. Fashionable style and good dynamic performance cars will be warmly received by new-generation automobile consumers, but the spring for low-grade economic car still needs time.
Replacement demand-driven consumers are less sensitive to the price and petroleum cost, instead, they more focus on the maturity and performance of the brands. Therefore, this demand may be for medium and high displacement passenger cars. The consumer group for first cars is aged below 30, favouring fashionable and dynamic style, so it is estimated that urban SUVs and medium-grade cars will be the major consumption.
SUVs and MPVs
Improved leisure style SUVs will continue the high-speed growth, which is little affected by petroleum price and tax factors etc. According to the mature automobile market data, the market share of SUVs continues to increase. As the automobile demand releasing and purchasing ability gradually growing in second and third tier cities, SUVs will have new growth spots.
A MPV combines together household and business purposes, which blurs the line between discretionary consumer products and capital goods. In this year, the growth rate of MPVs will exceed the average growth rate of passenger cars industry, but we consider its potential is less than SUVs market. Currently some automobile enterprises invest in MPVs, so we believe family style MPVs will occupy some market share of family passenger cars.
Commercial vehicles
In segmentation of commercial vehicles, the trend to getting "heavy" is obvious. Heavy vehicles, coach and heavy tonnage with semi trailers noticeably increased faster than other segments of commercial vehicles. Among commercial vehicles, freight vehicles cyclicality is relatively long, and the bus industry steadily develops with sales growth almost maintaining 20% per annum.
Commercial freight vehicles shall benefit from future factors such as GDP of China growing at above 10%, continuing high growth in fixed asset investments, further expansion of weight-based charges, increasing freight vehicle demand from new rural construction among towns and villages, and export market opening for leading enterprises. In general, commercial vehicles will maintain about 10% growth, due to booming of heavy vehicles industry this year. but total sales growth next year will be less than current year on pcp. Sales structure of heavy vehicles will be further changed, with bigger proportion for high power and large capacity heavy vehicles, and export of high-grade trucks is estimated to expand further. In future, two growth spots for the truck industry will be large capacity, energy-saving heavy trucks and export market.
Bus industry maintains constant growth. Due to the large population of China, and road passenger transportation volume increasing, replacement of sightseeing buses has become one of driving forces for bus industry development. Similar to truck industry, buses as a segment of commercial vehicles are popular among foreign importers due to its high price/performance, and now mainly exporting to regions such as Middle-East and Cuba. There is still a significant gap of automobile technology between China and European and American mature markets, so it is difficult to export buses to the developed countries. Automobile industries in developing countries are relatively behind, but with transportation demand increasing, it should be beneficial to the commercial vehicles export of China. Export price per vehicle is higher than that in domestic industry, which could help improving the gross profit of producers.
Affecting and supporting factors in 2008
In 2008, automobile industry will face affecting factors including energy-saving environmental policy, levying of petroleum tax, unification of domestic and foreign enterprise taxes, high-price petroleum and development of new energy etc. Thus automobile sub-industries will face new opportunities and challenges.
Formation of a new consumer group and the obvious consumption upgrade trend are the backgrounds for a steadily developing passenger cars market, while GDP, fix asset investments and new rural construction factors are the supporting factors for commercial freight vehicles stable growth. Demographic dividend, tourism boom and expressway expansion are the forces to maintain constant development of commercial passenger cars. In the automobile industry, there are passenger cars as discretionary consumer products, as well as commercial vehicles with capital goods purpose. Each branch industries will undergo a development stage where opportunity and challenge co-exist, meanwhile, the leading enterprises of automobile parts will also have enormous opportunities. Therefore upstream leading automobile parts merchants in the automobile industry chain will embrace a high-speed development stage.
Growth numbers
Presently the average per-capita auto number is three cars per a hundred persons in China. According to the internationally accepted automobile popularizing stage division, China is in the "early stage of motorization". Nevertheless, due to distinctive urban-rural dual structure in China and the different development level between urban and suburban districts, per-capita auto number is twenty cars per hundred persons in tier one cities, where the automobile consumption is in a "stage of motorization". It is estimated that most cities of China will remain in this stage for a long period.
As of October 2007, automobile sales reached 7,150,000 cars in China, a year-on-year accumulated increase of 24%. Among this number, passenger cars sales were 5,079,400, with a year-on-year accumulated increase of 23.75%, while commercial vehicles sales were 2,070,000, with a year-on-year accumulated increase of 25.14%. Firstly, let's look at the short-term sales trend of various car types.
Since 2002, annual sales of passenger cars have cross the million line in China, achieving a high-speed growth for five years. At the end of 2007, it is estimated that sales will reach six million cars. Considering great economic difference among regions in China, the main development engine for the automobile industry is the existing customer's replacement demand and new user's first purchasing demand.
Passenger cars
Brand competition between passenger cars is fierce. Currently passenger cars brands total about 340 in China, and the annual average sales per brand is 17,000 this year, a year-on-year decrease of 45% for passenger cars brands. The reason is that passenger cars market exhibits brand disorder and excessive small enterprises, which is also related to the consumption feature of passenger cars in China.
Passenger cars, as the consumption segment of automobile industry, have an incomparable market potential to the buses and freight vehicles. In the car segment, we think high-grade brand sales will be stable, while competition in medium-grade market will be vigorous. Fashionable style and good dynamic performance cars will be warmly received by new-generation automobile consumers, but the spring for low-grade economic car still needs time.
Replacement demand-driven consumers are less sensitive to the price and petroleum cost, instead, they more focus on the maturity and performance of the brands. Therefore, this demand may be for medium and high displacement passenger cars. The consumer group for first cars is aged below 30, favouring fashionable and dynamic style, so it is estimated that urban SUVs and medium-grade cars will be the major consumption.
SUVs and MPVs
Improved leisure style SUVs will continue the high-speed growth, which is little affected by petroleum price and tax factors etc. According to the mature automobile market data, the market share of SUVs continues to increase. As the automobile demand releasing and purchasing ability gradually growing in second and third tier cities, SUVs will have new growth spots.
A MPV combines together household and business purposes, which blurs the line between discretionary consumer products and capital goods. In this year, the growth rate of MPVs will exceed the average growth rate of passenger cars industry, but we consider its potential is less than SUVs market. Currently some automobile enterprises invest in MPVs, so we believe family style MPVs will occupy some market share of family passenger cars.
Commercial vehicles
In segmentation of commercial vehicles, the trend to getting "heavy" is obvious. Heavy vehicles, coach and heavy tonnage with semi trailers noticeably increased faster than other segments of commercial vehicles. Among commercial vehicles, freight vehicles cyclicality is relatively long, and the bus industry steadily develops with sales growth almost maintaining 20% per annum.
Commercial freight vehicles shall benefit from future factors such as GDP of China growing at above 10%, continuing high growth in fixed asset investments, further expansion of weight-based charges, increasing freight vehicle demand from new rural construction among towns and villages, and export market opening for leading enterprises. In general, commercial vehicles will maintain about 10% growth, due to booming of heavy vehicles industry this year. but total sales growth next year will be less than current year on pcp. Sales structure of heavy vehicles will be further changed, with bigger proportion for high power and large capacity heavy vehicles, and export of high-grade trucks is estimated to expand further. In future, two growth spots for the truck industry will be large capacity, energy-saving heavy trucks and export market.
Bus industry maintains constant growth. Due to the large population of China, and road passenger transportation volume increasing, replacement of sightseeing buses has become one of driving forces for bus industry development. Similar to truck industry, buses as a segment of commercial vehicles are popular among foreign importers due to its high price/performance, and now mainly exporting to regions such as Middle-East and Cuba. There is still a significant gap of automobile technology between China and European and American mature markets, so it is difficult to export buses to the developed countries. Automobile industries in developing countries are relatively behind, but with transportation demand increasing, it should be beneficial to the commercial vehicles export of China. Export price per vehicle is higher than that in domestic industry, which could help improving the gross profit of producers.
Import Export Business - Factors That Affect It
No matter how stable the economy of a nation is, no nation is practically self sufficient. Even the most powerful countries need many raw materials from other countries in order to produce products that are needed by other countries as well. Everything is actually evolving in trading; and that is acquiring what it lacks, and selling what it produces. In other words, no nation can be totally independent from the rest of the world, most especially in providing for its production needs.
Nowadays, international trading has become more convenient, easier, and safer. Moreover, a lot of hard-to-comply government trading rules have been revised and improved for a smoother trading flow. These have encouraged many people then to engage in the import export business.
Like any other businesses, the trading business has also a lot of important considerations. Although, trading opportunities have widened with advent of technology, traders, importers, and exporters still have to be conscious of the factors that will affect the outcome of the business. Here are some of the important factors that affect the import export business.
Marketing. A lot of businessmen may not be aware of the great impact of marketing on businesses. This is probably why not many businesses invest on marketing that much. Unfortunately for these people, they have actually missed out on the most important factor in any business- and that is marketing. The logic of marketing is just very simple and basic. If you want people to patronize your products and services; you must make them aware of these products and services. After all, how could someone possibly buy something that he has not heard of? Marketing is indeed a crucial aspect in businesses, most especially in the import export business. In starting up an import export business therefore, you should acknowledge the importance of marketing and invest time, effort, and money for the facilitation of marketing strategies.
Logistics. In the import export business, the delivery of products is one of the utmost important considerations, most especially if the products imported or exported are perishable. Definitely, with these types of products, time is very important. There are many logistics services that you can choose from. Naturally, for faster delivery of goods, the service charge is more expensive than the slower delivery services. Thus, it is important to consider the logistics requirements of your products in order to predict the costs that you will have to incur in the business.
Government Rules. Whether you like it or not, an import export business will always be dictated by the various rules imposed by the government with which you are doing trading with. With this reality, to avoid trading restrictions, it is very important to strictly comply with government rules at all times. If you are therefore doing trading business with many countries, you will have to consider the fact that these rules may vary from country to country.
Nowadays, international trading has become more convenient, easier, and safer. Moreover, a lot of hard-to-comply government trading rules have been revised and improved for a smoother trading flow. These have encouraged many people then to engage in the import export business.
Like any other businesses, the trading business has also a lot of important considerations. Although, trading opportunities have widened with advent of technology, traders, importers, and exporters still have to be conscious of the factors that will affect the outcome of the business. Here are some of the important factors that affect the import export business.
Marketing. A lot of businessmen may not be aware of the great impact of marketing on businesses. This is probably why not many businesses invest on marketing that much. Unfortunately for these people, they have actually missed out on the most important factor in any business- and that is marketing. The logic of marketing is just very simple and basic. If you want people to patronize your products and services; you must make them aware of these products and services. After all, how could someone possibly buy something that he has not heard of? Marketing is indeed a crucial aspect in businesses, most especially in the import export business. In starting up an import export business therefore, you should acknowledge the importance of marketing and invest time, effort, and money for the facilitation of marketing strategies.
Logistics. In the import export business, the delivery of products is one of the utmost important considerations, most especially if the products imported or exported are perishable. Definitely, with these types of products, time is very important. There are many logistics services that you can choose from. Naturally, for faster delivery of goods, the service charge is more expensive than the slower delivery services. Thus, it is important to consider the logistics requirements of your products in order to predict the costs that you will have to incur in the business.
Government Rules. Whether you like it or not, an import export business will always be dictated by the various rules imposed by the government with which you are doing trading with. With this reality, to avoid trading restrictions, it is very important to strictly comply with government rules at all times. If you are therefore doing trading business with many countries, you will have to consider the fact that these rules may vary from country to country.
5 Step Action Plan For Successful Export Marketing
Export marketing is a serious issue for most growing companies in today's interconnected global economy. Whether to export or not, where to and how to, are the major questions for companies willing to expand their international markets.
Export marketing is not just a process to find buyers/importers and approach them with the expectation of export orders but a well planned strategic marketing process one should follow and performed well to get success in International Market. Since last 10 years of my International Marketing consultancy practice, I have found that major export marketing efforts get failed due to lack of implementing strategic marketing action plan.
So what is that strategic marketing action plan..?
Strategic marketing action plan is a set of key functional areas of export marketing which should be performed well and followed step by step to get succeed in Export marketing. Performing following key tasks step by step will give you a rapid success in export marketing with sustainable and profitable export sales growth.
Step-1 : Identify your target market
First step of export marketing is to identify target market and market needs where your products/services has good market potential and demand. There are many countries in world and you should pick right one(s) for your product and services. If you know your target market and market needs, you could easily get export orders from those countries. You can identify target market by conducting International Market research activity that will give you detailed knowledge of opportunities in International market.
Step-2 : Developing Export Marketing strategies
After identifying target market, second step of export marketing is to develop a right Export Marketing Strategies including market entry strategy, positioning strategy, product strategy, pricing strategy, branding strategy, supply strategy and promotional strategy according to target market needs. Based on the conclusions of the International market research, you will be able to develop the strategy to meet your export marketing objectives. Your Export Marketing strategies should be able to develop a sense,
o To enter in right market where your products/services has good market potential and demand
o To position appropriately that give you and edge over competitor
o To develop products/services that satisfy needs of buyer,
o To offer prices that give both of you and your buyer a competitive advantage,
o To offer own brand or private label solution
o To supply as per ready stock or buyer's requirements
o To promote your company that creates awareness among buyers/importers
If you have developed right export marketing strategies you could enter and develop international market faster with sustainable export sales growth.
Step-3 : Preparing Marketing Communication tools
Once you have developed strategies based on target market needs, third step is to prepare informative and appealing marketing communication tools like Company Profile, Sales letter, Product Catalogue, Brochures, Website etc. that can supports in positioning and promoting your company. Your all marketing communication tools should be well designed, informative, professional and appealing that can deliver all necessary information of your company and products/services to prospective buyers/importers and influence their decision to start business communication with you.
Step-4 : Promotion
After preparing marketing communication tools, next step is Promotion which plays a major role in export marketing success. Main objective of promotion is to create awareness among buyers/importers of what you are and what you offer. Promotional mix should be cost effective and should deliver right message, in right time and at right place. Promotion should lead buyers/importers to get attention, capture interest and take action in initiating business communication with you. Internet is the best cost effective and fastest promotion tool in present export marketing practices. It has been seen that major buyers/importers using search engines, B2B portals and directories to find and contact genuine suppliers. So presence of your company profile and products/services in major search engines like Google, yahoo and B2B portals like Alibaba.com will give your company a global exposure and creates awareness among buyers/importers effectively. Participating in Trade fairs, Exhibitions and catalogue shows is also a good offline promotional strategy which can generate a direct and live contact with buyers/importers.
Step-5 : Generating Export Inquiries
Success in export Marketing begins with generating genuine export inquiries from prospective buyers/importers which requires expertise and focused work of promotion, sourcing genuine buyers and approaching them professionally. One should study buyer's profile and/or buy leads to know whether you can offer them what they requires. It has been seen that many suppliers contact majority of those buyers/importers who have no interest in their product/services without understanding their profile and needs. A Buyer/importer can send you inquiry only when he needs your products/services either better than his existing supplier in terms of either Quality, Price, Services and/or developing more suppliers and/or for other reasons. So contact them by offering competitive advantage which can get them interested to send you inquiries which can be converted in to export orders by communicating and negotiating professionally.
All above steps are inter connected and can only give results if each step performed or performing well. Export marketing is a continuous process and all those key functions can be reviewed and modified time to time as per changing global economic and market situation.
Export marketing is not just a process to find buyers/importers and approach them with the expectation of export orders but a well planned strategic marketing process one should follow and performed well to get success in International Market. Since last 10 years of my International Marketing consultancy practice, I have found that major export marketing efforts get failed due to lack of implementing strategic marketing action plan.
So what is that strategic marketing action plan..?
Strategic marketing action plan is a set of key functional areas of export marketing which should be performed well and followed step by step to get succeed in Export marketing. Performing following key tasks step by step will give you a rapid success in export marketing with sustainable and profitable export sales growth.
Step-1 : Identify your target market
First step of export marketing is to identify target market and market needs where your products/services has good market potential and demand. There are many countries in world and you should pick right one(s) for your product and services. If you know your target market and market needs, you could easily get export orders from those countries. You can identify target market by conducting International Market research activity that will give you detailed knowledge of opportunities in International market.
Step-2 : Developing Export Marketing strategies
After identifying target market, second step of export marketing is to develop a right Export Marketing Strategies including market entry strategy, positioning strategy, product strategy, pricing strategy, branding strategy, supply strategy and promotional strategy according to target market needs. Based on the conclusions of the International market research, you will be able to develop the strategy to meet your export marketing objectives. Your Export Marketing strategies should be able to develop a sense,
o To enter in right market where your products/services has good market potential and demand
o To position appropriately that give you and edge over competitor
o To develop products/services that satisfy needs of buyer,
o To offer prices that give both of you and your buyer a competitive advantage,
o To offer own brand or private label solution
o To supply as per ready stock or buyer's requirements
o To promote your company that creates awareness among buyers/importers
If you have developed right export marketing strategies you could enter and develop international market faster with sustainable export sales growth.
Step-3 : Preparing Marketing Communication tools
Once you have developed strategies based on target market needs, third step is to prepare informative and appealing marketing communication tools like Company Profile, Sales letter, Product Catalogue, Brochures, Website etc. that can supports in positioning and promoting your company. Your all marketing communication tools should be well designed, informative, professional and appealing that can deliver all necessary information of your company and products/services to prospective buyers/importers and influence their decision to start business communication with you.
Step-4 : Promotion
After preparing marketing communication tools, next step is Promotion which plays a major role in export marketing success. Main objective of promotion is to create awareness among buyers/importers of what you are and what you offer. Promotional mix should be cost effective and should deliver right message, in right time and at right place. Promotion should lead buyers/importers to get attention, capture interest and take action in initiating business communication with you. Internet is the best cost effective and fastest promotion tool in present export marketing practices. It has been seen that major buyers/importers using search engines, B2B portals and directories to find and contact genuine suppliers. So presence of your company profile and products/services in major search engines like Google, yahoo and B2B portals like Alibaba.com will give your company a global exposure and creates awareness among buyers/importers effectively. Participating in Trade fairs, Exhibitions and catalogue shows is also a good offline promotional strategy which can generate a direct and live contact with buyers/importers.
Step-5 : Generating Export Inquiries
Success in export Marketing begins with generating genuine export inquiries from prospective buyers/importers which requires expertise and focused work of promotion, sourcing genuine buyers and approaching them professionally. One should study buyer's profile and/or buy leads to know whether you can offer them what they requires. It has been seen that many suppliers contact majority of those buyers/importers who have no interest in their product/services without understanding their profile and needs. A Buyer/importer can send you inquiry only when he needs your products/services either better than his existing supplier in terms of either Quality, Price, Services and/or developing more suppliers and/or for other reasons. So contact them by offering competitive advantage which can get them interested to send you inquiries which can be converted in to export orders by communicating and negotiating professionally.
All above steps are inter connected and can only give results if each step performed or performing well. Export marketing is a continuous process and all those key functions can be reviewed and modified time to time as per changing global economic and market situation.
Animal Cruelty - My Visit to a Chicken Farm
I will never forget the time I visited a chicken farm in Mississippi. I had no idea what went into raising chickens for commercial food. I was shocked.
There were several long metal building packed with chickens. I mean, there must have been a million chickens all crammed into these torture cambers. Now, remember I am a country boy and I even raised chickens at one point in my life but I actually felt sorry for the chickens. The couldn't walk or do anything like a chicken is supposed to do. All they did was eat, get big and fat then butchered and sold to major food processors.
I talked to the owner in to giving me about 20 of the sick chickens. I took them to my little farm and tried to bring them back to life. It was so odd. They were giant chickens, mutants, and even after months care they still couldn't walk. My chickens would roost and night. They would fly up to the top of the coop and go to sleep. The mutated chickens from the chicken factory couldn't do anything. They all finally died. Again, I felt sorry for those chickens and I didn't really want to eat any more chickens. In addition, these chickens were feed all sorts of chemicals. It was animal cruelty. I know we have to eat and I think eating chickens is ok but we must be aware these animals do feel pain.
Remember I am not a vegan but I do think we need laws about animal cruelty in the food industry.
There were several long metal building packed with chickens. I mean, there must have been a million chickens all crammed into these torture cambers. Now, remember I am a country boy and I even raised chickens at one point in my life but I actually felt sorry for the chickens. The couldn't walk or do anything like a chicken is supposed to do. All they did was eat, get big and fat then butchered and sold to major food processors.
I talked to the owner in to giving me about 20 of the sick chickens. I took them to my little farm and tried to bring them back to life. It was so odd. They were giant chickens, mutants, and even after months care they still couldn't walk. My chickens would roost and night. They would fly up to the top of the coop and go to sleep. The mutated chickens from the chicken factory couldn't do anything. They all finally died. Again, I felt sorry for those chickens and I didn't really want to eat any more chickens. In addition, these chickens were feed all sorts of chemicals. It was animal cruelty. I know we have to eat and I think eating chickens is ok but we must be aware these animals do feel pain.
Remember I am not a vegan but I do think we need laws about animal cruelty in the food industry.
Pessimism in the Chinese Textile Industry
A recent research report showed that in China's textile industry, two-thirds of companies are having an average operating margin of only 0.62%. If these companies fail, it will affect 15 million jobs.
Textile is one of the most representative exports of China, with a trade surplus of US$150 billion last year. But the Chinese RMB has gone up 14% against USD since the currency reform, and the US subprime crisis is spreading to other countries. As a result, the whole Chinese exporting sector is surrounded by a pessimistic atmosphere.
High level action
"One third of textile companies will go broke in 2008," such a rumour was circulating the internet in China in early January, and it caught the attention of the Ministry of Commerce of China and China National Textile and Apparel Council (CNTAC). Therefore in March, 6 research groups were sent to the top 6 textile provinces in China, namely Jiangsu, Zhejiang, Shandong, Guangdong, Fujian and Hebei, as they have a collective textile export share of 85% nationally.
What the research groups want to find out include impacts from the rising currency, raw material costs, rising labor costs, reduction of export rebates, increase in export duties, etc. In light of the intensive policy adjustments and environment changes, how are Chinese textile companies coping? What more can they afford?
No one knows exactly the number of textile companies in China. The official statistics show that there are currently more than 40,000 companies with annual sales above 5 million yuan (US$660,000), based on export statistics. But CNTAC said that there are hundreds of thousands of smaller players.
According to Mr Sun Huaibin, Director of China Textile Economic Research Centre, 80% of profits in the Chinese textile industry were contributed by 1/3 of the companies in 2007. These companies have a profit margin of 6%-10%, against the industry average of 3.9%. But even this profitable one-third is having a hard time now. "Due to various factors, long term sales contracts are no longer easy to get now," said Mr Sun.
Another rumour has been circulating since January that export rebates will be cut by a further 4%. Although this has not been officially confirmed, many companies are already factoring into this effect when negotiating export prices. And investment bank analysts are also predicting that RMB will rise another 10% this year.
China exported US$176 billion worth of textile products in 2007, up 19% from 2006, the lowset growth rate since 2003. In the first two months of 2008, China exported US$16.4 billion clothing and accessories, up only 5.7% from previous comparable period (pcp).
CNTAC recommendations
According to the National Bureau of Statistics, the Chinese textile sector registered operating revenue of US$96 billion and profit of US$3.8 billion between January and November 2007, up 23.54% and 42.7% from pcp respectively.
But Mr Sun pointed out that there is a terrible polarisation in the Chinese textile sector. So even the overall statistics showed that textile exports are still rising, many small to medium companies are on the struggle.
CNTAC people also revealed that companies in Humen of Guangdong Province, a major textile trade centre of China, are now actually easier to find labours, which indicates the rising level of textile unemployment. On the other hand, the international market is becoming more and more competitive, China, Vietnam and India are all fighting for supply orders.
The labour-intensive textile industry is a truly sensitive industry. There are more than 20 million textile workers in China, with about 13 million are rural migrant workers. If 2/3 of the companies fail, the remaining 1/3 can only absorb half a million of them. Ms Xu Wenying, vice-president of CNTAC, suggested that "the government should also pay attention to this problem when they are tackling trade surplus and inflation issues. It will endanger the social stability if there are suddenly tens of thousands of people losing their jobs."
Against the backdrop of rising currency, CNTAC hope that the government can seriously consider returning some export rebates, or at least not further reducing the rebates. A researcher said that the rising currency is the biggest problem faced by the textile industry. As macro economic policy cannot be altered for a particular industry, he hoped that the government would use rebates to adjust the situation.
Historically, textile export rebate in China was once as low as 11%, but it was increased back to 15% in 1998 due to the then industry difficulties. It was again reduced to 11% last year.
The cotton import slip-tax is the most debated among textile and cotton companies in China. Mr Sun revealed that China has an annual cotton shortage of 4.5 million tons, but import quotas were only 900,000 tons. So any above-quota imports will incur cotton import slip-tax, which increases the cost of cotton by US$260 per ton. As 70% of operating cost for a typical Chinese textile company goes to raw materials such as cotton, cotton costs are vital to a company's profitability. CNTAC suggested that as post-tax imported cotton has now become even more expensive than domestic cotton, this renders the cotton slip-tax meaningless.
In addition, the textile industry has repeatedly called for the return of import duty exemption of automatic bobbin winders and air-jet looms, as the government removed the exemption in July 2007. Textile companies thought that such a policy has hit them hard and deterred their technological advancements, further putting pressure on the industry.
The textile industry also has to face the financing difficulty under the Chinese central bank's tightening bias. And textile companies are demanding a transitory period for the newly implemented labour regulation.
People from CNTAC said that the government had not listened to enough opinions from the industries when devising industry policies. And they are hoping that the latest government departmental reform could address this shortfall.
Textile is one of the most representative exports of China, with a trade surplus of US$150 billion last year. But the Chinese RMB has gone up 14% against USD since the currency reform, and the US subprime crisis is spreading to other countries. As a result, the whole Chinese exporting sector is surrounded by a pessimistic atmosphere.
High level action
"One third of textile companies will go broke in 2008," such a rumour was circulating the internet in China in early January, and it caught the attention of the Ministry of Commerce of China and China National Textile and Apparel Council (CNTAC). Therefore in March, 6 research groups were sent to the top 6 textile provinces in China, namely Jiangsu, Zhejiang, Shandong, Guangdong, Fujian and Hebei, as they have a collective textile export share of 85% nationally.
What the research groups want to find out include impacts from the rising currency, raw material costs, rising labor costs, reduction of export rebates, increase in export duties, etc. In light of the intensive policy adjustments and environment changes, how are Chinese textile companies coping? What more can they afford?
No one knows exactly the number of textile companies in China. The official statistics show that there are currently more than 40,000 companies with annual sales above 5 million yuan (US$660,000), based on export statistics. But CNTAC said that there are hundreds of thousands of smaller players.
According to Mr Sun Huaibin, Director of China Textile Economic Research Centre, 80% of profits in the Chinese textile industry were contributed by 1/3 of the companies in 2007. These companies have a profit margin of 6%-10%, against the industry average of 3.9%. But even this profitable one-third is having a hard time now. "Due to various factors, long term sales contracts are no longer easy to get now," said Mr Sun.
Another rumour has been circulating since January that export rebates will be cut by a further 4%. Although this has not been officially confirmed, many companies are already factoring into this effect when negotiating export prices. And investment bank analysts are also predicting that RMB will rise another 10% this year.
China exported US$176 billion worth of textile products in 2007, up 19% from 2006, the lowset growth rate since 2003. In the first two months of 2008, China exported US$16.4 billion clothing and accessories, up only 5.7% from previous comparable period (pcp).
CNTAC recommendations
According to the National Bureau of Statistics, the Chinese textile sector registered operating revenue of US$96 billion and profit of US$3.8 billion between January and November 2007, up 23.54% and 42.7% from pcp respectively.
But Mr Sun pointed out that there is a terrible polarisation in the Chinese textile sector. So even the overall statistics showed that textile exports are still rising, many small to medium companies are on the struggle.
CNTAC people also revealed that companies in Humen of Guangdong Province, a major textile trade centre of China, are now actually easier to find labours, which indicates the rising level of textile unemployment. On the other hand, the international market is becoming more and more competitive, China, Vietnam and India are all fighting for supply orders.
The labour-intensive textile industry is a truly sensitive industry. There are more than 20 million textile workers in China, with about 13 million are rural migrant workers. If 2/3 of the companies fail, the remaining 1/3 can only absorb half a million of them. Ms Xu Wenying, vice-president of CNTAC, suggested that "the government should also pay attention to this problem when they are tackling trade surplus and inflation issues. It will endanger the social stability if there are suddenly tens of thousands of people losing their jobs."
Against the backdrop of rising currency, CNTAC hope that the government can seriously consider returning some export rebates, or at least not further reducing the rebates. A researcher said that the rising currency is the biggest problem faced by the textile industry. As macro economic policy cannot be altered for a particular industry, he hoped that the government would use rebates to adjust the situation.
Historically, textile export rebate in China was once as low as 11%, but it was increased back to 15% in 1998 due to the then industry difficulties. It was again reduced to 11% last year.
The cotton import slip-tax is the most debated among textile and cotton companies in China. Mr Sun revealed that China has an annual cotton shortage of 4.5 million tons, but import quotas were only 900,000 tons. So any above-quota imports will incur cotton import slip-tax, which increases the cost of cotton by US$260 per ton. As 70% of operating cost for a typical Chinese textile company goes to raw materials such as cotton, cotton costs are vital to a company's profitability. CNTAC suggested that as post-tax imported cotton has now become even more expensive than domestic cotton, this renders the cotton slip-tax meaningless.
In addition, the textile industry has repeatedly called for the return of import duty exemption of automatic bobbin winders and air-jet looms, as the government removed the exemption in July 2007. Textile companies thought that such a policy has hit them hard and deterred their technological advancements, further putting pressure on the industry.
The textile industry also has to face the financing difficulty under the Chinese central bank's tightening bias. And textile companies are demanding a transitory period for the newly implemented labour regulation.
People from CNTAC said that the government had not listened to enough opinions from the industries when devising industry policies. And they are hoping that the latest government departmental reform could address this shortfall.
Export to China - 5 Easy Steps For International Marketing
Recent surveys in US, UK and Australia have shown a very interesting finding when comes to strategies in fighting off economic downturn - contrary to what most people have thought, cost cutting initiatives such ash reduction in outputs or staff retrenchment are actually not really on the top list.
Right on the top of the list are price reduction to encourage more sales, adjust marketing costs, such as increasing spending on digital marketing instead of commercial TV broadcasting, but one area that was highlighted is increasing export activities.
US companies in particular have been stepping up their efforts to boost export opportunities - a good example is to see increasing number of State Offices setting up their Business Promotion Representatives offices across China, as well as sports franchises such as MLB and NAB all conducting exhibition games in China.
Although China is showing severe signs of slowing down in economy, it is still expected to report a 6% to 8% growth this year, their Government has projected an ambitious 8% growth for this year, still a big slow down compared to 11% growth achieved only 12 months ago. But any growth in today's economy is still remarkable, and with its massive population of the middle class population and the fact that China has over 100 cities that has population over 1 million, it is a market not to be missed by exporters.
But what are some of the easy steps to explore business opportunities in China, when comes to international marketing, when comes to exporting, is it always a very expensive and tedious process?
Not so, especially with today's Internet technology, the cost in exporting has come down a lot.
International Marketing is the priority when comes to exporting - and this should be conducted way before you export your first product or service. International Marketing is not Advertising, it is much more than that as it includes branding, messaging, press releases as well as the market research components to identify and reach your target audiences.
1. Create a Chinese version website
I can not emphasize how important it is to set up a Chinese version website for your company as a first step. The vast majority of Asian consumers are Internet savvy, and Internet is a big part of their everyday life, the average time spent on Internet in Asia is significantly higher than western countries.
And of course, majority of them do not know much English, so if your website is only in English, they are unlikely to be reached and worst, unlikely to be listed on many search engines.
2. Ensure your website can be found on Chinese language search engines
The search engine market in Asia is highly fragmented, with Google only has a small market share. Then, in each market, this is further segmented, in Taiwan, Yahoo is popular, in China, there is not really a clear market leader, Baidu, Sohu and Sina kind of share the biggest market share, but it depends on the industry and also target markets.
Ensure you have submitted your websites IN CHINESE to ensure they are listed on these search engines.
3. Use Websites in other Greater Chinese Markets
Chinese consumers are very interesting consumers - they have been using a lot of websites from Hong Kong and Taiwan as a source for information, especially when comes to the latest fashion or personal care products. Websites in these markets are also in liberal states where Internet censorship and government are less likely to occur.
4. Chinese version Press Releases
Make as many releases as possible - that's the secret, the more press releases you make in Chinese, the bigger the coverage. Consumers will always try to find more about your company through press releases.
5. Blogs in Asia
A very useful technique in Asia - there are literally millions of Blogs in Asia, but they are very relevant and the traffic is really high. Most of the popular Blog are found under popular search engine or news websites. You will see many press releases have been posted on Blogs rather than news websites sometimes.
Blogs play a very important part of web marketing in Asia, this is perhaps reflected in the culture where they like to hear others' opinions rather than finding out themselves. Smart companies, such as some personal care or cosmetics companies have been using Blogs as advertising tool before they launch into other web marketing activities in Asia.
Right on the top of the list are price reduction to encourage more sales, adjust marketing costs, such as increasing spending on digital marketing instead of commercial TV broadcasting, but one area that was highlighted is increasing export activities.
US companies in particular have been stepping up their efforts to boost export opportunities - a good example is to see increasing number of State Offices setting up their Business Promotion Representatives offices across China, as well as sports franchises such as MLB and NAB all conducting exhibition games in China.
Although China is showing severe signs of slowing down in economy, it is still expected to report a 6% to 8% growth this year, their Government has projected an ambitious 8% growth for this year, still a big slow down compared to 11% growth achieved only 12 months ago. But any growth in today's economy is still remarkable, and with its massive population of the middle class population and the fact that China has over 100 cities that has population over 1 million, it is a market not to be missed by exporters.
But what are some of the easy steps to explore business opportunities in China, when comes to international marketing, when comes to exporting, is it always a very expensive and tedious process?
Not so, especially with today's Internet technology, the cost in exporting has come down a lot.
International Marketing is the priority when comes to exporting - and this should be conducted way before you export your first product or service. International Marketing is not Advertising, it is much more than that as it includes branding, messaging, press releases as well as the market research components to identify and reach your target audiences.
1. Create a Chinese version website
I can not emphasize how important it is to set up a Chinese version website for your company as a first step. The vast majority of Asian consumers are Internet savvy, and Internet is a big part of their everyday life, the average time spent on Internet in Asia is significantly higher than western countries.
And of course, majority of them do not know much English, so if your website is only in English, they are unlikely to be reached and worst, unlikely to be listed on many search engines.
2. Ensure your website can be found on Chinese language search engines
The search engine market in Asia is highly fragmented, with Google only has a small market share. Then, in each market, this is further segmented, in Taiwan, Yahoo is popular, in China, there is not really a clear market leader, Baidu, Sohu and Sina kind of share the biggest market share, but it depends on the industry and also target markets.
Ensure you have submitted your websites IN CHINESE to ensure they are listed on these search engines.
3. Use Websites in other Greater Chinese Markets
Chinese consumers are very interesting consumers - they have been using a lot of websites from Hong Kong and Taiwan as a source for information, especially when comes to the latest fashion or personal care products. Websites in these markets are also in liberal states where Internet censorship and government are less likely to occur.
4. Chinese version Press Releases
Make as many releases as possible - that's the secret, the more press releases you make in Chinese, the bigger the coverage. Consumers will always try to find more about your company through press releases.
5. Blogs in Asia
A very useful technique in Asia - there are literally millions of Blogs in Asia, but they are very relevant and the traffic is really high. Most of the popular Blog are found under popular search engine or news websites. You will see many press releases have been posted on Blogs rather than news websites sometimes.
Blogs play a very important part of web marketing in Asia, this is perhaps reflected in the culture where they like to hear others' opinions rather than finding out themselves. Smart companies, such as some personal care or cosmetics companies have been using Blogs as advertising tool before they launch into other web marketing activities in Asia.
The Growth of the Indian Pharmaceutical Industry
The Indian pharmaceutical industry consists of around 20,000 businesses. The pharmaceutical business in India is booming because of several reasons. Firstly, the affordability of the products plays an important role in improving the conditions of the Indian pharmaceutical industry. Secondly, India boasts of a workforce that matches those of the top pharmaceutical businesses in the world. Finally, the development and competency level of technology in India is on a considerable rise. Due to all of this, the Indian pharmaceutical industry is growing at the rate of CAGR 13.7%.
Evidence of this is the fact that India is predicted to enter the big league of the top 10 pharmaceutical markets in the world. Currently, India ranks 14th in terms of value and 3rd in terms of volume. It is obvious then, that the Indian pharmaceutical industry is a contributor to the country's growth and development. As India offers a perfect combination of skills, technology and economy, many foreign companies have started outsourcing their manufacturing departments to India. Also, some Indian companies have joined hands with MNCs for research and development (R & D) in projects like cancer, AIDS, etc. India's IT sector plays a pivotal role in enticing MNCs to outsource research and drug discovery contracts.
This road to success was led by the system of product patents introduced on 1st January, 2005. Due to this, India has become a worldwide exporter of high quality generic drugs. India exports to 65 countries with US as its biggest market. According to the National Pharmaceuticals Policy for 2006, the industry's export was worth US 3.75 billion dollars and growing at a compound annual rate of 22.7%.
In spite of this success story, the Indian pharmaceutical business has room for improvement. To utilise their capacity to the fullest, the India pharmaceutical industry is seeking untapped global as well as local markets. In India, one of the goals of the Indian pharmaceutical industry is to make drugs easily accessible in the local markets. Also, the demand for sophisticated and innovative medicines has increased as the common man lives the western lifestyle. The Indian pharmaceutical industry needs to make more investments in R & D and distribution. Quality wise India is still not up to the international standards. For India to become a top player in the global pharmaceutical business, the government of India needs to support foreign investments in pharmaceuticals and biotechnology. Also, biotechnology in India is yet to reach its true potential but it's definitely on its way with the growing importance of vaccines ad bio-services.
However, with talented human resource, advanced technology, low-cost products and mergers & acquisitions with MNCs, the pharmaceutical business in India holds the promise of being one of the top pharmaceutical industries in the world.
Evidence of this is the fact that India is predicted to enter the big league of the top 10 pharmaceutical markets in the world. Currently, India ranks 14th in terms of value and 3rd in terms of volume. It is obvious then, that the Indian pharmaceutical industry is a contributor to the country's growth and development. As India offers a perfect combination of skills, technology and economy, many foreign companies have started outsourcing their manufacturing departments to India. Also, some Indian companies have joined hands with MNCs for research and development (R & D) in projects like cancer, AIDS, etc. India's IT sector plays a pivotal role in enticing MNCs to outsource research and drug discovery contracts.
This road to success was led by the system of product patents introduced on 1st January, 2005. Due to this, India has become a worldwide exporter of high quality generic drugs. India exports to 65 countries with US as its biggest market. According to the National Pharmaceuticals Policy for 2006, the industry's export was worth US 3.75 billion dollars and growing at a compound annual rate of 22.7%.
In spite of this success story, the Indian pharmaceutical business has room for improvement. To utilise their capacity to the fullest, the India pharmaceutical industry is seeking untapped global as well as local markets. In India, one of the goals of the Indian pharmaceutical industry is to make drugs easily accessible in the local markets. Also, the demand for sophisticated and innovative medicines has increased as the common man lives the western lifestyle. The Indian pharmaceutical industry needs to make more investments in R & D and distribution. Quality wise India is still not up to the international standards. For India to become a top player in the global pharmaceutical business, the government of India needs to support foreign investments in pharmaceuticals and biotechnology. Also, biotechnology in India is yet to reach its true potential but it's definitely on its way with the growing importance of vaccines ad bio-services.
However, with talented human resource, advanced technology, low-cost products and mergers & acquisitions with MNCs, the pharmaceutical business in India holds the promise of being one of the top pharmaceutical industries in the world.
The Swiss Watch Industry
Jean Calving reform was the main reason for the invention of Swiss watches, and clocks. It happened in the 16th century when people were banned to wear the jewels, so goldsmiths started crafting watches. By the end of the 16th century, Genevan watches were already popular for their high quality and design.
It was a continuous effort and hard work of Swiss goldsmiths that they induced rich inventions and new developments in the watch industry. In 18th century, self-winding watches were created, and then in the mid of 19th century, pendant winding watches were introduced by Adrien Philippe who also introduced perpetual calendar, fly-back hand, and chronographs.
In 20th century, Frederic Ingold and Georges Lechot are two watchmakers who made extensive research, and with the invention of new technologies, the production was increased. The main features of the watches in the 20th century were interchangeability of the parts and standardization, which made the Swiss watch industry to reach the heights of glory.
Today the Swiss watch industry is the third largest export industry after the machine and chemical industry. Swiss watches do not need any introduction; you can find them all around the globe. New technology has brought revolution in the industry, and more surprisingly the timepieces suit all pockets. You can find a quartz fashion, or a modest price mechanical watch. The mechanical masterpieces are now worth million francs, as they are made up of gold and precious stones. Historical Swiss watches and clocks were of horizontal structures. However, to a lesser extent, artisans integrated some vertical structures.
The Swiss watch industry became victim of economic crisis during 1970s, and early 1980s. This resulted in a reduction of the size of industry; employees as well as companies were decreased. This trend continued until 2004, where there were less than 100 employees employed in small sized companies.
Apart from the reduction in the number of companies, the invention and development of new products never stopped. Swiss watch and clock industry does not have any comparison with foreign competitors, as it offers genuinely comprehensive choice of products to its customers.
You can choose between mechanical and quartz watches. Mechanical watches can be found with hand-wound and automatic features, whilst quartz watches can be found with analog or digital display. The preference is all yours if you want a diamond watch of precious metal, or you like any watch from stainless steel to plastic, or high tech ceramic. You can have a sports watch, fashionable, or trendy watch according to your likeness and style. One thing is for sure, after watching the vast variety of the watches you will always find the one satisfying your need and mode.
Swiss watch industry is exporting 95% of its products today in different parts of the world. Japan and Hong Kong are the main competitors of the Swiss industry. The industry was moribund due to economic crisis in the 20th century, but it has recovered very well by successfully completing its structural re-conversion. Today, it is the brightest industry of Switzerland, as it is breaking its own yearly records in exporting watches, and clocks all around world.
It was a continuous effort and hard work of Swiss goldsmiths that they induced rich inventions and new developments in the watch industry. In 18th century, self-winding watches were created, and then in the mid of 19th century, pendant winding watches were introduced by Adrien Philippe who also introduced perpetual calendar, fly-back hand, and chronographs.
In 20th century, Frederic Ingold and Georges Lechot are two watchmakers who made extensive research, and with the invention of new technologies, the production was increased. The main features of the watches in the 20th century were interchangeability of the parts and standardization, which made the Swiss watch industry to reach the heights of glory.
Today the Swiss watch industry is the third largest export industry after the machine and chemical industry. Swiss watches do not need any introduction; you can find them all around the globe. New technology has brought revolution in the industry, and more surprisingly the timepieces suit all pockets. You can find a quartz fashion, or a modest price mechanical watch. The mechanical masterpieces are now worth million francs, as they are made up of gold and precious stones. Historical Swiss watches and clocks were of horizontal structures. However, to a lesser extent, artisans integrated some vertical structures.
The Swiss watch industry became victim of economic crisis during 1970s, and early 1980s. This resulted in a reduction of the size of industry; employees as well as companies were decreased. This trend continued until 2004, where there were less than 100 employees employed in small sized companies.
Apart from the reduction in the number of companies, the invention and development of new products never stopped. Swiss watch and clock industry does not have any comparison with foreign competitors, as it offers genuinely comprehensive choice of products to its customers.
You can choose between mechanical and quartz watches. Mechanical watches can be found with hand-wound and automatic features, whilst quartz watches can be found with analog or digital display. The preference is all yours if you want a diamond watch of precious metal, or you like any watch from stainless steel to plastic, or high tech ceramic. You can have a sports watch, fashionable, or trendy watch according to your likeness and style. One thing is for sure, after watching the vast variety of the watches you will always find the one satisfying your need and mode.
Swiss watch industry is exporting 95% of its products today in different parts of the world. Japan and Hong Kong are the main competitors of the Swiss industry. The industry was moribund due to economic crisis in the 20th century, but it has recovered very well by successfully completing its structural re-conversion. Today, it is the brightest industry of Switzerland, as it is breaking its own yearly records in exporting watches, and clocks all around world.
The Indian Handicraft Industry
India is a land where exporting is much a necessity than a preferred choice. It is a highly populated land where commerce and business are the need of the hour. And then, India is also a leader in various fields, and the abundance of few specialized items can afford it to export such items. However, when we talk about the Indian Export Business, do we easily think of Handicraft industry? Not really, because Agriculture as a major export area is a famous and popular concept, overshadowing many other fields.
India is indeed one of the major exporters of handicrafts and gift items. Owing to a heritage of rich art and craft culture in ancient times, Indian Handicraft sector is recognizable for their most popular craft items like earthenware, pottery, woodwork, sculpting, scarves, shawls, textiles, embroidered and knitted goods, zari items, jewelry, etc. Indian Handicraft goods have a great demand overseas, as they are a perfect mix of traditional designs with modern techniques. The export of Handicraft items in India is growing exponentially, and so-much-so that it is emerging as the second largest employment generating sector after Agriculture. Hence, a large number of artisans are engaged in designing pottery and other craft work.
The Agriculture Export Business is increasing at a consistent growth rate and is spreading its wings to various nations. India has been exporting its products to USA, UK, Germany, France, Netherlands, Spain, Italy, UAE, Canada, Belgium and others countries. From various exported handcraft items, few that are high on the demand list are Wood wares, Hand printed textiles, Shawls, Zari Goods, Imitation Jewelry, Crocheted Goods and more.
Another reason for the popularity of Indian Handicraft goods is the exceptional and varied design items. Consisting of 28 states, India offers an enormous range of handicraft products, where many states have their own handicraft USP. Following is listed the various Handicraft items and the Indian states they are associated with it.
o Wooden ware- Saharanpur, Hoshiarpur, Srinagar, Amritsar, Jaipur, Jodhpur, Mysore, Madras, Kerala, Behrampur
o Marble and Stone Craft- Jodhpur, madras, Agra
o Zari Goods- Madras and Rajasthan
o Art Metal- Moradabad, Aligarh, Rewari, Jodhpur, Jaipur, Delhi, Madras, Beedar, Kerala, Jaisalmer
o Jewelry- Delhi, Moradabad, Kohima
o Papier Mache items- Kashmir, Rajasthan and Bihar
The Indian Handicraft goods are used for leisure pursuits and as a style statement. The manufacture of Handicraft goods is giving employment to many people in India, and has forged an unsurpassed reputation in the international market.
India is indeed one of the major exporters of handicrafts and gift items. Owing to a heritage of rich art and craft culture in ancient times, Indian Handicraft sector is recognizable for their most popular craft items like earthenware, pottery, woodwork, sculpting, scarves, shawls, textiles, embroidered and knitted goods, zari items, jewelry, etc. Indian Handicraft goods have a great demand overseas, as they are a perfect mix of traditional designs with modern techniques. The export of Handicraft items in India is growing exponentially, and so-much-so that it is emerging as the second largest employment generating sector after Agriculture. Hence, a large number of artisans are engaged in designing pottery and other craft work.
The Agriculture Export Business is increasing at a consistent growth rate and is spreading its wings to various nations. India has been exporting its products to USA, UK, Germany, France, Netherlands, Spain, Italy, UAE, Canada, Belgium and others countries. From various exported handcraft items, few that are high on the demand list are Wood wares, Hand printed textiles, Shawls, Zari Goods, Imitation Jewelry, Crocheted Goods and more.
Another reason for the popularity of Indian Handicraft goods is the exceptional and varied design items. Consisting of 28 states, India offers an enormous range of handicraft products, where many states have their own handicraft USP. Following is listed the various Handicraft items and the Indian states they are associated with it.
o Wooden ware- Saharanpur, Hoshiarpur, Srinagar, Amritsar, Jaipur, Jodhpur, Mysore, Madras, Kerala, Behrampur
o Marble and Stone Craft- Jodhpur, madras, Agra
o Zari Goods- Madras and Rajasthan
o Art Metal- Moradabad, Aligarh, Rewari, Jodhpur, Jaipur, Delhi, Madras, Beedar, Kerala, Jaisalmer
o Jewelry- Delhi, Moradabad, Kohima
o Papier Mache items- Kashmir, Rajasthan and Bihar
The Indian Handicraft goods are used for leisure pursuits and as a style statement. The manufacture of Handicraft goods is giving employment to many people in India, and has forged an unsurpassed reputation in the international market.
Import and Export Business From the USA
Import and Export businesses are also popularly known as International Trade or International Business. USA companies are doing business of over 3 trillion dollars a year in Merchandise sector only, so, we can imagine how much dollars of business in all sectors are doing, out of which 95% is controlled by small businesses. There are many forms of international Trade like -
• Export and import of goods and services.
• Export Management Company (EMC)
• Broker.
According to US census Bureau of import export USA is like- "The import statistics consist of goods valued at more than $2,000 per commodity shipped by individuals and organizations (including importers and customs brokers) into the U.S. from other countries. And the export statistics consist of goods valued at more than $2,500 per commodity shipped by individuals and organizations (including exporters, freight forwarders, and carriers) from the U.S. to other countries."
The above statistics of USA import data and the subsequent export data itself divulges the prospect for the importers in USA. Importers must remember some basic requirements of USA-
• Custom clearance, it includes- entry, inspection, appraisement, classification and liquidation.
• The importer must declare the dutiable value of merchandise.
• The Classification number must dogged by the importer of the merchandise being imported. The HTSUS (Harmonized Tariff Schedule of the United States) issued by the US International Trade Commission, set downs the categorization of commodities by the type of products like- vegetable and animal products, and textile products and textile fibers.
• Export and import of goods and services.
• Export Management Company (EMC)
• Broker.
According to US census Bureau of import export USA is like- "The import statistics consist of goods valued at more than $2,000 per commodity shipped by individuals and organizations (including importers and customs brokers) into the U.S. from other countries. And the export statistics consist of goods valued at more than $2,500 per commodity shipped by individuals and organizations (including exporters, freight forwarders, and carriers) from the U.S. to other countries."
The above statistics of USA import data and the subsequent export data itself divulges the prospect for the importers in USA. Importers must remember some basic requirements of USA-
• Custom clearance, it includes- entry, inspection, appraisement, classification and liquidation.
• The importer must declare the dutiable value of merchandise.
• The Classification number must dogged by the importer of the merchandise being imported. The HTSUS (Harmonized Tariff Schedule of the United States) issued by the US International Trade Commission, set downs the categorization of commodities by the type of products like- vegetable and animal products, and textile products and textile fibers.
Exporting Made Easy With Real Export Data
The one thing which comes to every investor's mind while making a deal is whether the deal is a satisfying one; also, what the other possible options are, if any. Whether the investment is in the form of money or in the form of resources, knowledge of possible options is therefore indispensable. This is where export data plays a major role as far as exporting goods and merchandise is concerned. It helps eliminate the information gap that has always prevailed in between the seller and the market, especially in the foreign trade scenario. It is implemented by providing the exporters with an online access to this data which contains relevant and ready to use intelligence information about the available options for each potential deal.
Export data is the most reliable source to look for buyers of particular kinds of products. In a jiffy, the company can have a report of the buyers who deal in the range of products that it manufactures. One can craft the most of each and every business opportunity by utilizing the customized information given in this database. It is also handful for studying a company's export trends and the resultant annual profit made. Moreover, a detailed analysis of this data keeping in mind an exporter's products can help make a very accurate assessment of his or her benefits and projected profits.
Export data is the most reliable source to look for buyers of particular kinds of products. In a jiffy, the company can have a report of the buyers who deal in the range of products that it manufactures. One can craft the most of each and every business opportunity by utilizing the customized information given in this database. It is also handful for studying a company's export trends and the resultant annual profit made. Moreover, a detailed analysis of this data keeping in mind an exporter's products can help make a very accurate assessment of his or her benefits and projected profits.
China's Cement Industry Forecast For 2008 - 2010
China's cement output is forecast to grow 10% per annum between 2008 and 2010. Due to the regulatory guidance of "eliminating old capacity before establishing capacity", growth of new cement production capacity may somehow slow down in the next few years, and it may even result in supply shortage in some regional markets at some stage. Overall cement prices are expected to climb steadily upwards, due to factors such as supply-demand structure, higher costs of coal and electricity input. Organic growth of the cement industry should be able to deliver satisfactory operating results in the coming years.
The Chinese government has mandated the elimination of 250 million tons of outdated cement production capacity by 2010, so it is expected that industry consolidation will accelerate and market shares and industry profits will be further concentrated to strong companies. Therefore, there will be additional value created by acquisition opportunities as a result of industry consolidation.
Organic growth delivered satisfactory results
The industrialisation and urbanisation progress in China should continue to expand the demand for cement products. Due to the rising cement price domestically and the removal of export rebates on cement product in July 2007, China had experienced a 10% decline in cement exports in the second half of 2007 over previous comparable period (pcp). The impact from the removal of export rebates has only been here for about half a year, so it will become clearer after the full year of 2008. Analysts are forecasting that China's net cement export will be maintained at 40 million tons between 2008 and 2010. Taking into account both domestic and export cement demands, China's cement industry shall see a 10% pa growth in demand in the next three years.
On the other hand, cement supply growth may slow down in China. It is estimated that the Chinese cement industry had completed US$7.2 billion worth of fixed asset investments in 2007. The industry's investment growth in 2007, which was up 7.78% from 2006, was prompted by factors including changing cement product mix, accelerated elimination of outdated capacity and pressure from energy saving and emission reducing mandates.
Taking into account the "eliminating before establishing" regulatory arrangement on adding new capacity for dry-processed cement, capacity growth of dry-processed cement in China is expected to grow 10%, 9% and 8% between 2008 and 2010. The elimination of old capacities may even create periodic supply shortage in some regional markets in the short term. But the supply and demand balance should be restored towards 2010 as the existing 250 million tons of outdated capacity gradually retires from the Chinese market.
At present, 60% of the global cement market is concentrated in the hands of the top 50 cement manufacturers worldwide. However, China's low industry concentration domestically has become the main reason for market price volatility and low-end price competition, and such averagely low capacity size will also hinder the utilisation of scale production. Therefore, as a result of elimination of outdated capacity, organic capacity investment and external acquisition, China's cement industry concentration can be improved to 18.1% and 19.6% in 2008 and 2009 respectively.
The improvement in industry concentration can lead to scale efficacy. On one hand, as entry barrier getting higher and locally-produced cement production equipment getting larger, there will be many large scale cement production lines being established, which could improve production efficiency. And the localisation of cement equipment may also reduce the fixed cost and breakeven points for Chinese cement companies. On the other hand, the improvement in industry concentration may also improve leading cement producers' bargaining power against suppliers and customers, thus expanding industry profit margins.
Reorganisation value from industry consolidation
The Chinese cement market is a highly competitive market, and cement is a commodity with homogeneous quality across the board. When staffing and technological levels are at a similar level, price competition will become the main competing method. Therefore, the commodity nature of cement has determined that scale expansion will be the driving force for cement manufacturers, in order to achieve advantageous competitive positioning.
Take the example of Anhui Conch Cement Co Ltd, China's largest cement producer. The Chizhou, Anhui Province-based cement company had grown from producing 2 million tons of cement clinker in 1996, to producing 59 million tons of clinker and 65 million tons of cement in 2006, by means of serial mergers, acquisitions and scale expansion. Conch Cement has been the largest producers in China for 10 consecutive years, and it is also the largest supplier of cement and clinker in Asia and the fourth largest globally.
Mandatory elimination of outdated capacity may help effectively improve industry concentration. The minimum scale threshold required by industry regulators could notably enhance per unit (of production lines) capacity, providing a technological foundation for industry concentration. The mandate of eliminating 250 million tons of outdated cement capacity by 2010 will no doubt encourage industry consolidation, which will in turn accelerate industry concentration.
Although it is difficult to point out specific targets, deals and timing, it can be reasonably expected that industry reshuffling in the Chinese cement market will intensify in the near future. Leading regional producers may be able to strengthen their positions via mergers and acquisitions, and the Chinese cement industry will eventually be dominated by a few regional leaders. On one hand, strong cement players will try to "unite" with small and medium players in surrounding regions, with the objective of becoming regional leaders. On the other hand, multinational cement giants will establish their presence in selective market spots in China, pressuring domestic cement producers to engage in more M&A activities to secure regional market shares. As the Chinese cement industry is still having a low degree of concentration, synergetic benefits from industry consolidation could be quite notable in the period of 2008 and 2010. Therefore, industry consolidation may be able to effectively contribute to cement producers' bottom lines, in addition to their organic capacity growth.
The Chinese government has mandated the elimination of 250 million tons of outdated cement production capacity by 2010, so it is expected that industry consolidation will accelerate and market shares and industry profits will be further concentrated to strong companies. Therefore, there will be additional value created by acquisition opportunities as a result of industry consolidation.
Organic growth delivered satisfactory results
The industrialisation and urbanisation progress in China should continue to expand the demand for cement products. Due to the rising cement price domestically and the removal of export rebates on cement product in July 2007, China had experienced a 10% decline in cement exports in the second half of 2007 over previous comparable period (pcp). The impact from the removal of export rebates has only been here for about half a year, so it will become clearer after the full year of 2008. Analysts are forecasting that China's net cement export will be maintained at 40 million tons between 2008 and 2010. Taking into account both domestic and export cement demands, China's cement industry shall see a 10% pa growth in demand in the next three years.
On the other hand, cement supply growth may slow down in China. It is estimated that the Chinese cement industry had completed US$7.2 billion worth of fixed asset investments in 2007. The industry's investment growth in 2007, which was up 7.78% from 2006, was prompted by factors including changing cement product mix, accelerated elimination of outdated capacity and pressure from energy saving and emission reducing mandates.
Taking into account the "eliminating before establishing" regulatory arrangement on adding new capacity for dry-processed cement, capacity growth of dry-processed cement in China is expected to grow 10%, 9% and 8% between 2008 and 2010. The elimination of old capacities may even create periodic supply shortage in some regional markets in the short term. But the supply and demand balance should be restored towards 2010 as the existing 250 million tons of outdated capacity gradually retires from the Chinese market.
At present, 60% of the global cement market is concentrated in the hands of the top 50 cement manufacturers worldwide. However, China's low industry concentration domestically has become the main reason for market price volatility and low-end price competition, and such averagely low capacity size will also hinder the utilisation of scale production. Therefore, as a result of elimination of outdated capacity, organic capacity investment and external acquisition, China's cement industry concentration can be improved to 18.1% and 19.6% in 2008 and 2009 respectively.
The improvement in industry concentration can lead to scale efficacy. On one hand, as entry barrier getting higher and locally-produced cement production equipment getting larger, there will be many large scale cement production lines being established, which could improve production efficiency. And the localisation of cement equipment may also reduce the fixed cost and breakeven points for Chinese cement companies. On the other hand, the improvement in industry concentration may also improve leading cement producers' bargaining power against suppliers and customers, thus expanding industry profit margins.
Reorganisation value from industry consolidation
The Chinese cement market is a highly competitive market, and cement is a commodity with homogeneous quality across the board. When staffing and technological levels are at a similar level, price competition will become the main competing method. Therefore, the commodity nature of cement has determined that scale expansion will be the driving force for cement manufacturers, in order to achieve advantageous competitive positioning.
Take the example of Anhui Conch Cement Co Ltd, China's largest cement producer. The Chizhou, Anhui Province-based cement company had grown from producing 2 million tons of cement clinker in 1996, to producing 59 million tons of clinker and 65 million tons of cement in 2006, by means of serial mergers, acquisitions and scale expansion. Conch Cement has been the largest producers in China for 10 consecutive years, and it is also the largest supplier of cement and clinker in Asia and the fourth largest globally.
Mandatory elimination of outdated capacity may help effectively improve industry concentration. The minimum scale threshold required by industry regulators could notably enhance per unit (of production lines) capacity, providing a technological foundation for industry concentration. The mandate of eliminating 250 million tons of outdated cement capacity by 2010 will no doubt encourage industry consolidation, which will in turn accelerate industry concentration.
Although it is difficult to point out specific targets, deals and timing, it can be reasonably expected that industry reshuffling in the Chinese cement market will intensify in the near future. Leading regional producers may be able to strengthen their positions via mergers and acquisitions, and the Chinese cement industry will eventually be dominated by a few regional leaders. On one hand, strong cement players will try to "unite" with small and medium players in surrounding regions, with the objective of becoming regional leaders. On the other hand, multinational cement giants will establish their presence in selective market spots in China, pressuring domestic cement producers to engage in more M&A activities to secure regional market shares. As the Chinese cement industry is still having a low degree of concentration, synergetic benefits from industry consolidation could be quite notable in the period of 2008 and 2010. Therefore, industry consolidation may be able to effectively contribute to cement producers' bottom lines, in addition to their organic capacity growth.
International Export Packaging - A Checklist
In international export, it may take several days, even weeks before the products reach to the customer, after being dispatched by exporters. Being an exporter, it's your responsibility to package all exporting items in a way that your customers will acquire them in excellent condition. Apart from protection; packaging is also used for marketing (labels & logos) or information (guidelines for consumers) purposes. Exporting products are vulnerable against physical shocks, crushing, climate change, mishandling, etc and the packaging should be able to safeguard them against all these hazards. Though the packaging standards differ with the countries and products, there are some minimum requirements that you need to take care of.
Packaging Box and Tapes:
Usually cardboard boxes are used when packaging for shipment. Always use firm boxes with proper flaps; extra padding (or cushioning) is compulsory for breakable items. Size of the box should be according to the product size, not too small (that you have to forcefully stuff all items inside) and not too large (that the goods can move around and clash with each other). Use separate wrapping for each item. If the products are of fragile nature, you can use wooden box for extra protection. Use standard tapes instead of normal household tapes, special tapes for packaging purpose are easily available. Extra safety measures are needed when you are exporting "food" items.
Addressing & Labeling:
Recipient address should be clearly mentioned, also the sender address where the products will return in case they don't reach the addressee. Also, mention the recipient contact number to ensure the delivery. Your business or brand logos on the package can be used for marketing and promotional objectives. Sometimes attractive packaging is used as a competitor advantage. You can also use the packaging to communicate with the customers about the other products or services you are offering. If the products are fragile or breakable, you can state these characteristics outside the box and give instructions for careful handling.
When exporting to developed countries, be sure to obtain knowledge about the acceptable packaging standards in that country. You can also refer to ISO standards in these cases. It's better to have a clear idea of all the possible hazards that the products can face before they will reach their destination. Remember the main motives of packaging that includes physical protection, quality preservation, storage convenience, marketing and product information. Adopting world-class standards is vital when doing international export, not only your product but your packaging should be of export quality in order to stand out.
Packaging Box and Tapes:
Usually cardboard boxes are used when packaging for shipment. Always use firm boxes with proper flaps; extra padding (or cushioning) is compulsory for breakable items. Size of the box should be according to the product size, not too small (that you have to forcefully stuff all items inside) and not too large (that the goods can move around and clash with each other). Use separate wrapping for each item. If the products are of fragile nature, you can use wooden box for extra protection. Use standard tapes instead of normal household tapes, special tapes for packaging purpose are easily available. Extra safety measures are needed when you are exporting "food" items.
Addressing & Labeling:
Recipient address should be clearly mentioned, also the sender address where the products will return in case they don't reach the addressee. Also, mention the recipient contact number to ensure the delivery. Your business or brand logos on the package can be used for marketing and promotional objectives. Sometimes attractive packaging is used as a competitor advantage. You can also use the packaging to communicate with the customers about the other products or services you are offering. If the products are fragile or breakable, you can state these characteristics outside the box and give instructions for careful handling.
When exporting to developed countries, be sure to obtain knowledge about the acceptable packaging standards in that country. You can also refer to ISO standards in these cases. It's better to have a clear idea of all the possible hazards that the products can face before they will reach their destination. Remember the main motives of packaging that includes physical protection, quality preservation, storage convenience, marketing and product information. Adopting world-class standards is vital when doing international export, not only your product but your packaging should be of export quality in order to stand out.
Farming is always full of jobs that you can feel you didn't "sign up for" including the seemingly constant turnover of purchasing new machinery and to
Farming is always full of jobs that you can feel you didn't "sign up for" including the seemingly constant turnover of purchasing new machinery and tools to keep your farm ticking over and functioning smoothly. However, taking time to first purchase quality tools and equipment and then take care of them, including regular maintenance checks will help ease that particular burden off your shoulders.
If you want to check your fencing machines for wear and tear, there are several different things you should check. If these show significant disintegration, new parts or a new model should be purchased.
- Check over all the couplings and clamps to ensure they fit firmly and are undamaged. If they are worn they will need to be replaced.
- If any of the wires are frayed, broken or damaged they will need to be replaced. Sometimes the wire begins to be stretched a little and needs to be readjusted. It is good to lubricate the wire and retest it.
- Examine the farm machinery carefully for any hairline fractures or stress breaks. These can cause a dramatic problem if not attended to, including full breakdown and potential injury to the user. It is best to contact your supplier about resolving these with either a mend or full replacement.
- Check all moving parts are well lubricated, particularly the hammer slide and mast to ensure it works smoothly and safely. Also pay attention to any pivot pins. If you have mended any areas in the past with welding, carefully check over your welding to ensure it is still holding.
- Any pulleys on the machine need to be free spinning and working smoothly. If it's sticking at all or feels a little rough it's advisable to replace these parts.
- Check the bolts to ensure they are all firm. Make sure they are all there and replace any you find are missing.
- Check for leaks in the hydraulic hoses and couplings. If you find leaks, these need to be replaced.
- If the safety features of the equipment look in anyway worn, it is essential you replace these immediately to ensure your continued safety in using the product.
If you want to check your fencing machines for wear and tear, there are several different things you should check. If these show significant disintegration, new parts or a new model should be purchased.
- Check over all the couplings and clamps to ensure they fit firmly and are undamaged. If they are worn they will need to be replaced.
- If any of the wires are frayed, broken or damaged they will need to be replaced. Sometimes the wire begins to be stretched a little and needs to be readjusted. It is good to lubricate the wire and retest it.
- Examine the farm machinery carefully for any hairline fractures or stress breaks. These can cause a dramatic problem if not attended to, including full breakdown and potential injury to the user. It is best to contact your supplier about resolving these with either a mend or full replacement.
- Check all moving parts are well lubricated, particularly the hammer slide and mast to ensure it works smoothly and safely. Also pay attention to any pivot pins. If you have mended any areas in the past with welding, carefully check over your welding to ensure it is still holding.
- Any pulleys on the machine need to be free spinning and working smoothly. If it's sticking at all or feels a little rough it's advisable to replace these parts.
- Check the bolts to ensure they are all firm. Make sure they are all there and replace any you find are missing.
- Check for leaks in the hydraulic hoses and couplings. If you find leaks, these need to be replaced.
- If the safety features of the equipment look in anyway worn, it is essential you replace these immediately to ensure your continued safety in using the product.
Analyzing Different Ways to Enter Into Export Market
When you mark some potentially lucrative export market and decide that it's worth giving a try. You need to make a very important decision, which is to decide on what exporting method are you going to use, in order to make inroads into that market? This decision is crucial for many reasons. For example, you are short on resources.
Exporting needs substantial funds and expertise that differs from market to market. Or maybe you have got the resources but you are not ready to risk them all on this new endeavor. Another reason could be the size of your business that doesn't allow you to start direct exports. It's better to play safe when you are new at something. That is why you can choose one of these methods to start with. Once you gain the experience and confidence, you can change the nature of export later.
Hire an exporting agent:
First choice is to hire an agent to represent you in that market. A good export agent will bring many advantages, the most important being the previous experience of operating in that particular market. Selling or marketing your products through some agent is a lot easier. You can obtain the much-needed presence in that market without having the need of spending big amounts on setting up an office. All you need to do is to choose a seasoned sales agent, who has got the experience and the staff to get the job done for you.
Form Partnership:
Going into partnership (also called export consortium) is another option available for you. Partnership means more resources and more experience. Your partner may well be having a better know-how of the targeted market. It also helps in meeting large orders in due time.
Apart from these two commonly used indirect exporting methods, other alternates are exporting through trading companies, licensing or franchising. Note that when going into partnership or hiring an agent, it is still advisable to personally visit the country, at least once.
Direct Export:
If you have the time and resources and you are ready to take the risk, you can go for the real trade, where you'd be at the helm of affairs for almost everything, from launching your product in the market to marketing, from distribution to collection. Selling directly to the end users needs a lot of efforts but at the same time, it is the most profitable venture among all the methods discussed above.
Exporting needs substantial funds and expertise that differs from market to market. Or maybe you have got the resources but you are not ready to risk them all on this new endeavor. Another reason could be the size of your business that doesn't allow you to start direct exports. It's better to play safe when you are new at something. That is why you can choose one of these methods to start with. Once you gain the experience and confidence, you can change the nature of export later.
Hire an exporting agent:
First choice is to hire an agent to represent you in that market. A good export agent will bring many advantages, the most important being the previous experience of operating in that particular market. Selling or marketing your products through some agent is a lot easier. You can obtain the much-needed presence in that market without having the need of spending big amounts on setting up an office. All you need to do is to choose a seasoned sales agent, who has got the experience and the staff to get the job done for you.
Form Partnership:
Going into partnership (also called export consortium) is another option available for you. Partnership means more resources and more experience. Your partner may well be having a better know-how of the targeted market. It also helps in meeting large orders in due time.
Apart from these two commonly used indirect exporting methods, other alternates are exporting through trading companies, licensing or franchising. Note that when going into partnership or hiring an agent, it is still advisable to personally visit the country, at least once.
Direct Export:
If you have the time and resources and you are ready to take the risk, you can go for the real trade, where you'd be at the helm of affairs for almost everything, from launching your product in the market to marketing, from distribution to collection. Selling directly to the end users needs a lot of efforts but at the same time, it is the most profitable venture among all the methods discussed above.
Revamping Jute Industry
Lest we forget, the jute industry was the life blood of our economy for several decades and continues to be one of the mainstays of our rural economy even today. About 15 million farmers are involved in growing this cash crop and several million more of our population, perhaps an equal number, are involved with its processing, transportation, conversion, etc. Be that as it may, the industry has gone off track due to undue interference and discriminatory policies made by the policy- makers from time to time and also for reasons beyond the control of the industrial operators. In order to understand the current state of affairs in the industry, one must look into the background of the jute industry and the events that took place over the last several decades.
While this part of the country was considered to be a hinterland in the 1940s where we produced only raw jute, all processing of the fibre was done in the jute mills in present India.
The then Government of Pakistan realised that it would be better to add value to the fibre and export jute goods to earn foreign exchange for the nation instead of exporting only the fibre. As such, the Government began to promote setting up of jute mills as far back as in 1951 in this part of the country.
At a time when Pakistan was going through a period of rapid industrialisation, the Govt. of India decided to devalue her currency. The economists of that period realised that if Pakistani Rupee was also devalued at the same rate as that of India, the rapid industrialisation process that the country was experiencing would be retarded.
Therefore, the Govt. came up, as early as in 1959, with a unique method of compensating the industry for overvaluation of Pakistani Rupee in the form of bonus vouchers, a scheme carefully crafted where the consumers paid for the overvaluation of the currency and there was no burden on the national exchequer.
By the end of 1960s and early 1970s, about 30 million people were already involved directly or indirectly in the sector. By 1972-73 the industry was already producing about four hundred and fifty thousand metric tons of jute goods earning approximately US$ 195 million.
In the year 1971-72, the Govt. of Bangladesh adopted a policy of nationalisation and as such, under a Presidential Order, nationalised all major industries including the viable, vibrant and financially healthy jute industry without taking into consideration, whether the mills were owned by Bangladeshi nationals or otherwise.
After a period of about I I years of operation under the Bangladesh Jute Mills Corporation (BJMC), incurring huge losses and crippling the industry, the Government of Bangladesh adopted a policy of privatisation wherein little over one third of the loss making jute industry, which was originally owned predominantly by Bangladeshi nationals, were de-nationalised or privatised in the year 1982-83.
While doing so, unfortunately, the Government forced the present owners to shoulder the entire liability that they had created during the nationalised period. Let me reiterate that when the mills were nationalised in 1972 we had handed over a viable, vibrant and a financial healthy jute industry to the Government. In spite of all difficulties and against all odds, the original owners came forward and took over the mills in the hope of reviving the sector.
In 1982-83 the industry produced about five hundred and forty thousand metric tons of Hessian, Sacking, CBC, Carpet and Yarn and earned about US$ 300.00 million. Although the industry was divided between public sector and private sector, the norms of credit to the industry were directed by Bangladesh Bank to the commercial banks and any other facilities that were given to the industry were also given in a fair and equitable manner, irrespective of whether the mills were run in the public sector or the private sector.
The cost of the huge debt burden that the private sector jute industry had to shoulder resulted in continued losses for the industry. As a result a number of studies were undertaken and finally the World Bank came forward with a $250 million Jute Sector Adjustment Credit (JSAC) to support the Jute Sector Reform Programme (JSRP) in 1992-93. The objective of the programme was to transform the existing loss making jute industry into a viable industry run predominantly in the private sector. In order to achieve this goal the World Bank and the Government of Bangladesh decided to address 1) capacity rationalisation, ii) un-sustainability of past debts, iii) interim loss finance and iv) privatisation.
Under the project, the Govt. was obliged to:
I . Close nine Public sector mills
1. Downsize two large Public sector mills
3. Write off one third of all past bank loans as on June 30, 1992.
4. Have in place an interim financing mechanism since the Govt. and the World Bank realised that the industry would continue to incur certain amount of losses during the currency of the project.
5. Privatise 18 Public sector mills
The Jute Sector Reform Programme of US$ 250 million was the single largest World Bank-assisted project in Bangladesh at that time. The Govt. of Bangladesh was able to draw only the first tranche of US$ 50 million. The government was unable to draw the balance US$ 200 million because it did not fulfil its obligations in the project. While the project may have failed for several factors, we feel very strongly about the unfair treatment, we in the private sector received, from the World Bank Project in the form of interim loss financing. When the project was being designed, the World Bank economist informed us that there would be a predetermined loss based on the average losses of the best five private and best five public mills. He further said that the public mills will get 100% of this predetermined loss as interim loss finance but the private sector will get two third of this predetermined loss since they are considered to be more efficient. The World Bank calculated this average loss figure to be 24% of sales based on the figures of 1991-92 without taking into consideration depreciation, gratuity etc.
The private sector complained to the Inspection Panel of the World Bank that they have been materially and adversely affected by this project and as such it needs to be looked into urgently. The Inspection Panel took up the matter seriously and visited the World Bank, the Government of Bangladesh, BJMC and Bangladesh Jute Mills Association (BJMA) and confirmed that there were design flaws in the programme and the private sector mills were materially and adversely affected. As such, the Inspection Panel advised the World Bank that the credit should not be extended until and unless the project is revisited and the flaws in the programme are removed.
It appears to be fashionable to go World Bank bashing for everything that goes wrong in our country where the World Bank is involved. It is perhaps high time to take a hard look at the JSRP and the role that our policy makers took in coming up with a programme full of flaws which eventually created distortions in our raw jute market, our labour market, our financial market as well as the international jute goods market.
In 1997 an inter-ministerial committee was formed under the Ministry of Jute to recommend a 'Revised Jute Sector Reform Programme'. Unfortunately, the recommendation that was made in 1997 only reached the Economic Relations Division (ERD) and the World Bank in the middle of June 2006 after a period of about nine years. I urge upon our people to ask who were the policy makers who decided to sit on it for nine long years and for what purpose or for whose benefit. We hope the Government and the World Bank would seriously revisit the project, rectify the design flaws and develop a new project in a fair manner. We feel, given the right support and creation of a level playing field between public & private sector, the industry can be revived to its full potential.
After the interim loss financing period for the public sector i.e., BJMC, was over, they were suddenly in tremendous liquidity crisis. Under the circumstances, the Govt. had arranged for BJMC to obtain loans amounting to more than Tk 25 billion (2,500 crores) under different heads, in addition to any subsidy that was provided for export of jute goods, to keep them afloat. When the Govt. knows that these loans are never going to be repaid, for all practical purposes these are grants. Because of these "loans", the BJMC is causing distortions in the raw jute market, the financial market, the labour market, as well as the international jute goods market.
We would like to see that every single jute mill in the country, irrespective of ownership, should be in operation. However, we do not think that the public sector mills can continue to operate without large amounts of funds being made available to the BJMC directly by the Government year after year. We therefore, feel that the Govt. should address the problems of conventional jute industry and take the following steps as the way forward to revive the industry.
The way forward:
The Government of Bangladesh owes the private sector jute mills an amount of Tk. 531.9 million (53.19 crores) under the heads of JSRP/JSAC and subsidy against the export of jute yam. The Government of Bangladesh should immediately release these funds to the private sector jute mills which they owe against specific MOF circulars.
Subsidy against export of jute goods are yet to be paid to the private sector jute industry for part of FY 2005-2006, the whole of FY 2006-2007 and the current FY 2007-2008. The Government should immediately release these funds to enable the private sector jute industry to function properly. Henceforth, the Government of Bangladesh should ensure that export subsidy is credited to the accounts of the exporting mills automatically with the presentation of the Proceeds Realisation Certificates.
The Government of Bangladesh should urge the World Bank to urgently revisit the JSRP, remove the flaws and develop a fresh programme in a fair manner and create a level playing field between the public and the private sector jute industry.
Increase export subsidy from 7.5% to 15% for Hessian, Sacking, CBC and Yarn and 20% for diversified or value-added jute products as per recommendation of the Advisory Committee of the Ministry of Textiles & Jute.
Allow duty free and VAT free import of spare parts of jute mill machinery by the jute mills.
The Govt. should immediately make it mandatory to pack food grains, sugar, fertiliser, and cement in jute bags.
This will not only create a supportive and protected internal market for environment friendly and natural jute bags which are 100% indigenous products of Bangladesh, employing millions of people, but also save the nation millions of dollars used in importing polypropylene compounds to manufacture p.p. bags.
The Govt. should also consider total privatisation, public-private partnership and leasing of the public sector mills to continue production in the public mills in a sustainable manner.
Due to the energy crisis prevailing in the country a number of jute mills have installed gas-powered generators.
The price at which the mills have to pay for the gas that they consume is substantially higher than the price for gas paid for by the Power Development Board (PDB).
We urge upon the Govt. to reduce the price of gas for captive power generation to the same level as paid for by the PDB. We also urge upon the Govt. to make gas available to the jute mills which are not connected as yet but are willing to install captive gas-powered generators.
The above is a brief or a background of the conventional jute industry in Bangladesh along with 'the way forward'. It was not intention of this writer to paint a sorry picture.
Facts are only being provided here for a dispassionate consideration of the situation facing the industry. The total quantity of Hessian, Sacking and CBC produced in 1972-1973 was little over 450,000 M.Tons which grew to about 563,000 M.Tons in 1982-83. Due to shear neglect and an uneven playing field created by the Govt. and the World Bank project (JSRP), the production of conventional jute products, namely, Hessian, Sacking and CBC dwindled to about 242,000 M.Tons in the year 2005-06.
However, there is a brighter side of the industry, which is only spinning jute yarns.
This sub-sector of the jute industry, fortunately, does not have any public sector involvement or debt overhang or any artificial distortions and as such has emerged to be a promising operation.
The production of jute yarns in the jute spinning sector has increased from around 27,000 M.Tons in 1982-83 to around 300,000 M.Tons in 2005-2006.
Bangladesh has a population of about one hundred and forty million people out of which about thirty million people are directly or indirectly involved with the jute sector.
The greatest challenge for Bangladesh today is not only to sustain the level of employment that we have generated so far but also to create employment for the millions who are joining the labour market everyday. It is, therefore, imperative that we address the problems of the jute industry in a fair manner and create a level playing field in a supportive environment.
While this part of the country was considered to be a hinterland in the 1940s where we produced only raw jute, all processing of the fibre was done in the jute mills in present India.
The then Government of Pakistan realised that it would be better to add value to the fibre and export jute goods to earn foreign exchange for the nation instead of exporting only the fibre. As such, the Government began to promote setting up of jute mills as far back as in 1951 in this part of the country.
At a time when Pakistan was going through a period of rapid industrialisation, the Govt. of India decided to devalue her currency. The economists of that period realised that if Pakistani Rupee was also devalued at the same rate as that of India, the rapid industrialisation process that the country was experiencing would be retarded.
Therefore, the Govt. came up, as early as in 1959, with a unique method of compensating the industry for overvaluation of Pakistani Rupee in the form of bonus vouchers, a scheme carefully crafted where the consumers paid for the overvaluation of the currency and there was no burden on the national exchequer.
By the end of 1960s and early 1970s, about 30 million people were already involved directly or indirectly in the sector. By 1972-73 the industry was already producing about four hundred and fifty thousand metric tons of jute goods earning approximately US$ 195 million.
In the year 1971-72, the Govt. of Bangladesh adopted a policy of nationalisation and as such, under a Presidential Order, nationalised all major industries including the viable, vibrant and financially healthy jute industry without taking into consideration, whether the mills were owned by Bangladeshi nationals or otherwise.
After a period of about I I years of operation under the Bangladesh Jute Mills Corporation (BJMC), incurring huge losses and crippling the industry, the Government of Bangladesh adopted a policy of privatisation wherein little over one third of the loss making jute industry, which was originally owned predominantly by Bangladeshi nationals, were de-nationalised or privatised in the year 1982-83.
While doing so, unfortunately, the Government forced the present owners to shoulder the entire liability that they had created during the nationalised period. Let me reiterate that when the mills were nationalised in 1972 we had handed over a viable, vibrant and a financial healthy jute industry to the Government. In spite of all difficulties and against all odds, the original owners came forward and took over the mills in the hope of reviving the sector.
In 1982-83 the industry produced about five hundred and forty thousand metric tons of Hessian, Sacking, CBC, Carpet and Yarn and earned about US$ 300.00 million. Although the industry was divided between public sector and private sector, the norms of credit to the industry were directed by Bangladesh Bank to the commercial banks and any other facilities that were given to the industry were also given in a fair and equitable manner, irrespective of whether the mills were run in the public sector or the private sector.
The cost of the huge debt burden that the private sector jute industry had to shoulder resulted in continued losses for the industry. As a result a number of studies were undertaken and finally the World Bank came forward with a $250 million Jute Sector Adjustment Credit (JSAC) to support the Jute Sector Reform Programme (JSRP) in 1992-93. The objective of the programme was to transform the existing loss making jute industry into a viable industry run predominantly in the private sector. In order to achieve this goal the World Bank and the Government of Bangladesh decided to address 1) capacity rationalisation, ii) un-sustainability of past debts, iii) interim loss finance and iv) privatisation.
Under the project, the Govt. was obliged to:
I . Close nine Public sector mills
1. Downsize two large Public sector mills
3. Write off one third of all past bank loans as on June 30, 1992.
4. Have in place an interim financing mechanism since the Govt. and the World Bank realised that the industry would continue to incur certain amount of losses during the currency of the project.
5. Privatise 18 Public sector mills
The Jute Sector Reform Programme of US$ 250 million was the single largest World Bank-assisted project in Bangladesh at that time. The Govt. of Bangladesh was able to draw only the first tranche of US$ 50 million. The government was unable to draw the balance US$ 200 million because it did not fulfil its obligations in the project. While the project may have failed for several factors, we feel very strongly about the unfair treatment, we in the private sector received, from the World Bank Project in the form of interim loss financing. When the project was being designed, the World Bank economist informed us that there would be a predetermined loss based on the average losses of the best five private and best five public mills. He further said that the public mills will get 100% of this predetermined loss as interim loss finance but the private sector will get two third of this predetermined loss since they are considered to be more efficient. The World Bank calculated this average loss figure to be 24% of sales based on the figures of 1991-92 without taking into consideration depreciation, gratuity etc.
The private sector complained to the Inspection Panel of the World Bank that they have been materially and adversely affected by this project and as such it needs to be looked into urgently. The Inspection Panel took up the matter seriously and visited the World Bank, the Government of Bangladesh, BJMC and Bangladesh Jute Mills Association (BJMA) and confirmed that there were design flaws in the programme and the private sector mills were materially and adversely affected. As such, the Inspection Panel advised the World Bank that the credit should not be extended until and unless the project is revisited and the flaws in the programme are removed.
It appears to be fashionable to go World Bank bashing for everything that goes wrong in our country where the World Bank is involved. It is perhaps high time to take a hard look at the JSRP and the role that our policy makers took in coming up with a programme full of flaws which eventually created distortions in our raw jute market, our labour market, our financial market as well as the international jute goods market.
In 1997 an inter-ministerial committee was formed under the Ministry of Jute to recommend a 'Revised Jute Sector Reform Programme'. Unfortunately, the recommendation that was made in 1997 only reached the Economic Relations Division (ERD) and the World Bank in the middle of June 2006 after a period of about nine years. I urge upon our people to ask who were the policy makers who decided to sit on it for nine long years and for what purpose or for whose benefit. We hope the Government and the World Bank would seriously revisit the project, rectify the design flaws and develop a new project in a fair manner. We feel, given the right support and creation of a level playing field between public & private sector, the industry can be revived to its full potential.
After the interim loss financing period for the public sector i.e., BJMC, was over, they were suddenly in tremendous liquidity crisis. Under the circumstances, the Govt. had arranged for BJMC to obtain loans amounting to more than Tk 25 billion (2,500 crores) under different heads, in addition to any subsidy that was provided for export of jute goods, to keep them afloat. When the Govt. knows that these loans are never going to be repaid, for all practical purposes these are grants. Because of these "loans", the BJMC is causing distortions in the raw jute market, the financial market, the labour market, as well as the international jute goods market.
We would like to see that every single jute mill in the country, irrespective of ownership, should be in operation. However, we do not think that the public sector mills can continue to operate without large amounts of funds being made available to the BJMC directly by the Government year after year. We therefore, feel that the Govt. should address the problems of conventional jute industry and take the following steps as the way forward to revive the industry.
The way forward:
The Government of Bangladesh owes the private sector jute mills an amount of Tk. 531.9 million (53.19 crores) under the heads of JSRP/JSAC and subsidy against the export of jute yam. The Government of Bangladesh should immediately release these funds to the private sector jute mills which they owe against specific MOF circulars.
Subsidy against export of jute goods are yet to be paid to the private sector jute industry for part of FY 2005-2006, the whole of FY 2006-2007 and the current FY 2007-2008. The Government should immediately release these funds to enable the private sector jute industry to function properly. Henceforth, the Government of Bangladesh should ensure that export subsidy is credited to the accounts of the exporting mills automatically with the presentation of the Proceeds Realisation Certificates.
The Government of Bangladesh should urge the World Bank to urgently revisit the JSRP, remove the flaws and develop a fresh programme in a fair manner and create a level playing field between the public and the private sector jute industry.
Increase export subsidy from 7.5% to 15% for Hessian, Sacking, CBC and Yarn and 20% for diversified or value-added jute products as per recommendation of the Advisory Committee of the Ministry of Textiles & Jute.
Allow duty free and VAT free import of spare parts of jute mill machinery by the jute mills.
The Govt. should immediately make it mandatory to pack food grains, sugar, fertiliser, and cement in jute bags.
This will not only create a supportive and protected internal market for environment friendly and natural jute bags which are 100% indigenous products of Bangladesh, employing millions of people, but also save the nation millions of dollars used in importing polypropylene compounds to manufacture p.p. bags.
The Govt. should also consider total privatisation, public-private partnership and leasing of the public sector mills to continue production in the public mills in a sustainable manner.
Due to the energy crisis prevailing in the country a number of jute mills have installed gas-powered generators.
The price at which the mills have to pay for the gas that they consume is substantially higher than the price for gas paid for by the Power Development Board (PDB).
We urge upon the Govt. to reduce the price of gas for captive power generation to the same level as paid for by the PDB. We also urge upon the Govt. to make gas available to the jute mills which are not connected as yet but are willing to install captive gas-powered generators.
The above is a brief or a background of the conventional jute industry in Bangladesh along with 'the way forward'. It was not intention of this writer to paint a sorry picture.
Facts are only being provided here for a dispassionate consideration of the situation facing the industry. The total quantity of Hessian, Sacking and CBC produced in 1972-1973 was little over 450,000 M.Tons which grew to about 563,000 M.Tons in 1982-83. Due to shear neglect and an uneven playing field created by the Govt. and the World Bank project (JSRP), the production of conventional jute products, namely, Hessian, Sacking and CBC dwindled to about 242,000 M.Tons in the year 2005-06.
However, there is a brighter side of the industry, which is only spinning jute yarns.
This sub-sector of the jute industry, fortunately, does not have any public sector involvement or debt overhang or any artificial distortions and as such has emerged to be a promising operation.
The production of jute yarns in the jute spinning sector has increased from around 27,000 M.Tons in 1982-83 to around 300,000 M.Tons in 2005-2006.
Bangladesh has a population of about one hundred and forty million people out of which about thirty million people are directly or indirectly involved with the jute sector.
The greatest challenge for Bangladesh today is not only to sustain the level of employment that we have generated so far but also to create employment for the millions who are joining the labour market everyday. It is, therefore, imperative that we address the problems of the jute industry in a fair manner and create a level playing field in a supportive environment.
ASEAN Duty - Free Agreement Spurs Export Growth & Relocation
FTA boosts expansion into member countries, and stabilizes imported raw material costs and supply.
Despite general uncertainty in the global trading environment, China manufacturers have one positive development going for them. Implemented at the start of 2010, the China and ASEAN Free Trade Area eliminated import tariffs for most articles exchanged between the countries.
The agreement affects more than 90 percent of China-made products, including white goods and furniture. The duty for split-type air-conditioning units with less than 4,000Btu cooling capacity, for instance, was 5 percent in 2009. In fact, taxes levied on the $1.03 billion worth of various export items to ASEAN member countries from January to November 2009 exceeded $73 million. With tariffs no longer in place, a company with annual ASEAN sales of $3 million can save more than $150,000 annually on duties.
This has encouraged many China suppliers to increase their focus on the ASEAN market. During the first two months of 2010, Shenzhen's furniture exports to member countries grew 307 percent to $250 million. Singapore is the top destination, accounting for almost half of overseas sales. Apart from the zero tariff, such markets are viable alternatives to the US, which now requires wooden furniture exports to come with FSC certificates. This prerequisite has made material sourcing more expensive and time-consuming for makers targeting the US, and is sufficient reason for some to boost their presence in ASEAN member countries.
Moreover, there are fewer safety and environmental standards that need to be met, which can translate to 5 to 10 percent savings in testing, research and management.
Lucrative export possibilities have even led several companies to establish factories that will furnish goods only for the ASEAN market. Computer products manufacturer Great Wall, for instance, set up a factory in Beihai, Guangxi province, to fabricate laptops targeting Southeast Asia. At present, Great Wall's monitors take one-sixth of total market share in Vietnam.
The FTA is also a means for businesses continuing to target the EU and the US to circumvent anti-dumping duties and trade barriers. These enterprises are building production facilities in ASEAN member countries. Not only do such suppliers avoid having to pay EU and US export tariffs, they also benefit from FTA agreements ASEAN has with countries such as Japan, South Korea and India. Lower land and labor costs, which are generally just two-fifths of worker expenses in China, are additional benefits.
In fact, despite having to bring in raw materials from China to Vietnam, candle manufacturer Aroma Consumer Products (Hangzhou) Co. Ltd, is able to save 20 to 40 percent in EU anti-dumping duties. This comes even while there is no well-developed supply chain, and insufficient machinery and skilled labor pool. The company currently operates a 50,000sqm factory with 600 employees in the ASEAN country.
Steady rubber stockpile
Southeast Asia is the largest source of rubber in the world, particularly Indonesia, Thailand, Vietnam and Malaysia. Each processing facility in Indonesia, for example, can produce between 20,000 and 60,000 tons annually. The quality of output from the region is good and stable as well.
China, on the other hand, can only turn out up to 10,000 tons per factory each year. But as the biggest global manufacturer of tires, the country needs more rubber than it produces. Major tire companies, for instance, each require more than 50 tons of the material annually. As such, at least 60 percent of natural rubber used for the industry is currently sourced overseas.
While the FTA does not eliminate import tariffs on rubber, it can help ensure stable cost and supply for China suppliers. The agreement can encourage suppliers from Thailand, Indonesia and Vietnam to set up distribution offices in China and sell directly to downstream manufacturers in the country.
Tire maker Kaifeng Group Co. Ltd (Tyre), for instance, purchases rubber in small quantities, typically less than 10 tons. As such, importing directly from providers is not a viable option for the company. Presently, similar small and midsize enterprises pool their requirements and direct orders via local traders. Having ASEAN rubber suppliers set up distribution centers in China would help the manufacturer streamline its sourcing strategies, and stabilize supply and lead time.
Despite general uncertainty in the global trading environment, China manufacturers have one positive development going for them. Implemented at the start of 2010, the China and ASEAN Free Trade Area eliminated import tariffs for most articles exchanged between the countries.
The agreement affects more than 90 percent of China-made products, including white goods and furniture. The duty for split-type air-conditioning units with less than 4,000Btu cooling capacity, for instance, was 5 percent in 2009. In fact, taxes levied on the $1.03 billion worth of various export items to ASEAN member countries from January to November 2009 exceeded $73 million. With tariffs no longer in place, a company with annual ASEAN sales of $3 million can save more than $150,000 annually on duties.
This has encouraged many China suppliers to increase their focus on the ASEAN market. During the first two months of 2010, Shenzhen's furniture exports to member countries grew 307 percent to $250 million. Singapore is the top destination, accounting for almost half of overseas sales. Apart from the zero tariff, such markets are viable alternatives to the US, which now requires wooden furniture exports to come with FSC certificates. This prerequisite has made material sourcing more expensive and time-consuming for makers targeting the US, and is sufficient reason for some to boost their presence in ASEAN member countries.
Moreover, there are fewer safety and environmental standards that need to be met, which can translate to 5 to 10 percent savings in testing, research and management.
Lucrative export possibilities have even led several companies to establish factories that will furnish goods only for the ASEAN market. Computer products manufacturer Great Wall, for instance, set up a factory in Beihai, Guangxi province, to fabricate laptops targeting Southeast Asia. At present, Great Wall's monitors take one-sixth of total market share in Vietnam.
The FTA is also a means for businesses continuing to target the EU and the US to circumvent anti-dumping duties and trade barriers. These enterprises are building production facilities in ASEAN member countries. Not only do such suppliers avoid having to pay EU and US export tariffs, they also benefit from FTA agreements ASEAN has with countries such as Japan, South Korea and India. Lower land and labor costs, which are generally just two-fifths of worker expenses in China, are additional benefits.
In fact, despite having to bring in raw materials from China to Vietnam, candle manufacturer Aroma Consumer Products (Hangzhou) Co. Ltd, is able to save 20 to 40 percent in EU anti-dumping duties. This comes even while there is no well-developed supply chain, and insufficient machinery and skilled labor pool. The company currently operates a 50,000sqm factory with 600 employees in the ASEAN country.
Steady rubber stockpile
Southeast Asia is the largest source of rubber in the world, particularly Indonesia, Thailand, Vietnam and Malaysia. Each processing facility in Indonesia, for example, can produce between 20,000 and 60,000 tons annually. The quality of output from the region is good and stable as well.
China, on the other hand, can only turn out up to 10,000 tons per factory each year. But as the biggest global manufacturer of tires, the country needs more rubber than it produces. Major tire companies, for instance, each require more than 50 tons of the material annually. As such, at least 60 percent of natural rubber used for the industry is currently sourced overseas.
While the FTA does not eliminate import tariffs on rubber, it can help ensure stable cost and supply for China suppliers. The agreement can encourage suppliers from Thailand, Indonesia and Vietnam to set up distribution offices in China and sell directly to downstream manufacturers in the country.
Tire maker Kaifeng Group Co. Ltd (Tyre), for instance, purchases rubber in small quantities, typically less than 10 tons. As such, importing directly from providers is not a viable option for the company. Presently, similar small and midsize enterprises pool their requirements and direct orders via local traders. Having ASEAN rubber suppliers set up distribution centers in China would help the manufacturer streamline its sourcing strategies, and stabilize supply and lead time.
Subscribe to:
Posts (Atom)