Catering Equipment Exporters’ Conference 08
The CBI Headquarters in London hosted the first catering equipment exporters’ conference which was organised by the Catering Equipment Suppliers Association an chaired by its Export Group Chairman, Kenny Maguire. An audience of over 20 delegates heard speaker presentations on opportunities in key markets and also heard how to identify opportunities for government export support. Copies of speaker presentations accompany this report.
Exporter’s Dream or Bureaucratic Nightmare?
Stephen Dalziel, Executive Director, Russo-British Chamber of Commerce stated that Russian affluence is replacing corruption with large high-end restaurant development providing significant opportunities for catering equipment exporters. Significant internal investment from oil revenues has seen Russia escape the problems of the 1990’s. The Russia of Putin is very different to that of Yeltsin. Russia plans to have the largest shopping centre in Europe –the project is under construction. Hotels are developing in major towns and cities. Sochi will be a focus of major development as it hosts the 2014 Winter Olympics.
With a hierarchical business structure and the need to get above the ‘power line’ to influence decision returns can take time - IKEA first made a profit in 2006 after its initial opening in 2000.
RBCC provides consultancy services, advice on accreditation and documentation and missions to the country.
Libya – don’t leave it too late, $40bn Infrastructure Development
Sir Richard Dalton, Director General, Libyan British Business Council highlighted the key developments where significant internal and economic changes have followed since the country committed to its surrender of weapons of mass destruction in 2003. Gaddafi is seeking to improve life for its nationals by providing for their aspirations and to achieve his aim to make the country ‘more normal’.
Service industries are the focus of development by private enterprise as the country invests its oil and gas revenues. Local agents are the route to market but exporters were warned of beaurocracy, corruption and the need to do business the ‘local’ way. Once again a market requiring long term commitment prospects are good with English being the major language and the UK seen to be a ‘second home’.
Major projects are underway which lend themselves to the need for catering equipment as airports, universities, business and the military all develop. Sir Richard added that if companies are in the UAE they should be in Libya too but he suggested that the market will peak in 2011 – 2012. With no alcohol allowed, development of the 2000km coastline as a tourist destination, is unlikely to happen unless there is a change of to accommodate the needs of tourists.
No import tariffs for catering equipment – but it may not last!
Sabe Tibbitts, International Trade Adviser, UK T & I - London International Trade Team gave the news that business products that help to generate overseas revenue are exempt from 20% import duty. This was welcomed by the audience but she warned that ‘duty free licences for hotels may not last forever’. Presenting 3*-5* hotel room supply figures for a dozen key cities she showed that plans were underway for an overall 260% growth to 102,000 rooms with Pune showing growth expectations of 1039% . Health tourism is also leading some of this development.
Tibbitts stressed the need to consider what equipment will be used for and the need to ‘hang on to pricing’ with the added value element of any negotiation being important. Local distributors and joint ventures are key to market access with no single distributor being able to deliver national coverage.
Sport is good for you - and for the catering equipment exporter
Andrew Bacchus, Head Construction, UK Trade & Investment said that his department is focussed on understanding the 7 year cycle of project development which is vital for companies to succeed. UKT&I’s sports and leisure team is a well resourced department committed to assisting exporters with sports and leisure projects across the globe.
With the 2012 Olympics being seen as the springboard for UK businesses to gian knowledge and understanding of how to compete in key sporting events, post event knowledge transfer is part of the host country’s legacy which can be used to benefit future events – proof of this is the number of Australian voices that can be heard in the 2012 organising offices.
Highlighting the opportunities in tangible development, Andrew cited; 10 stadia for 2010 world cup; 20,000 more hotel rooms for the Delhi Commonwealth Games; 3 stadia and , 3 upgrade stadiums and 8 airports for the Poland 2012 UEFA Championships; 4 new stadia for Brazil 2014 and the Sochi Winter Olympic Games in 2014 where currently there is no infrastructure at all.
All of these projects provide significant opportunity for UK catering equipment exporters, more details of which can be found at www.uktradeinvest.gov.uk
The Far East is a ‘face to face’ market
Justin Pau, Project Manager, All World Exhibitions illustrated the need to get closer to the customer, the need to develop relationships and to the need to take a long term view as key requirements for effective long term business in the region.
Singapore is a valuable start point with no re-export charges and significant convention centre, amusement park and hotel development itself. A booming hotel, restaurant and foodservice sector mean that demand and opportunity are strong with ‘after market’ service requirement an essential requirement. Singapore is seen to be a showcase for the region.
Hong Kong and Maccau – following the devastating economic effects of the SARS outbreak business is now back to pre-epidemic levels. Maccau is a major success story with gambling revenues of $7bn in 2006 - a 91% growth on 2002. Many products are sourced locally through distributors.
China – an increase in disposable income and an emerging middle class have fuelled the countries annual growth rate of 9.5%. This growth comes from increased exports, increasing consumption and also from investment.
QSR’s are showing exceptional growth in the country.
Patience, the right product offering and the strength of the business relationship or ‘guang xi’ are needed for companies to be successful in the region.
The World Expo ‘Better City – Better Life’ project in 2010 will see significant opportunity for UK businesses as this major development is planned and built.
Market entry to the region must be via regional distributor links, joint venture. A strong after market services is needed as is the need to protect IPR. Hong Kong can be an ideal start point from which to also supply the south China market.
Shortcuts to success for businesses
John Vernon, CESA Export Consultant explained the complexity of public sector communication which resulted in multiple sources of information from government and business agencies. Vernon, the CESA Export consultant cut through this to identify the best approach for catering equipment exporters.
Getting your company listed on the www.uktradeinvest.co.uk web site is free and can produce strong sales leads from posts overseas. Registering as a new business account will help to link companies to their local trade adviser who is the route to potential funding and advice – and it’s free!
A copy of John Vernon’s presentation gives a step by step guide to registering for sales leads, contains lists of contacts and has profile raising opportunities for exporters.
