Caribbean Export is the regional trade and investment promotion agency focused on building a resilient Caribbean by providing cutting-edge and high-impact support to the private sector.
AYITIKA is a social enterprise created in 2012 whose objective is to enhance the quality of Haiti’s cocoas in niche markets and to increase incomes in rural areas. The company intervenes on the entire chain (selection of exceptional varieties, production, technical accompaniment producers, fermentation marketing). AYITIKA has a thousand small producer partners operating 300 hectares with which a fair relationship is established. Thanks to an innovative research and development policy and the creation of partnerships with international research centres and chocolatiers, the company has a specialized team and processes in line with international standards. AYITIKA has relaunched production in 3 previously unvalued terroirs (land): South-East, South and Nippes. The company’s social commitment also translates into collaboration with universities, sector ministries and cooperation in Haiti to ensure an overall progression of the thread.
PRODUCTS:
The company today offers products and services in B to B: a) Seedlings of transplanted cocoa (aromatic, productive, adapted clones); b) Biofertilizers (vermicompot, bocashi); c) Technical advice services and d) Fermented cocoa following a process guaranteeing the maintenance of the original aromas of beans and natural environment (terroirs).
Conacado Agrodindustrial is the result of a successful cooperation between small and medium cocoa farmers, the appropriate intervention from European cooperation and the Dominican Republic government with the goal to re-birth the Dominican cocoa sector. Before, the association was linked with a project between the German Technical Cooperation Agency (GTZ) and the Cocoa Department in the Agricultural sector of the government of the Dominican Republic. The national confederation was established in 1970 because of the association with local farmers.
CHOCOLALA SRL is a women-led chocolate factory established by Ms. Ana Idalia Navarro in 1990, because of her vision to create economic opportunities for women in the community of Las Lajas, Altamira, province of Puerto Plata in the Dominican Republic. Thanks to this effort, the company has learned how to transform cocoa into consumer products and over the years have decided to organize and train employees, thus creating the Ana Idalia Navarro Mother Center and later the company CHOCOLALA SRL.
CHOCOLALA SRL is committed to producing quality products and ensures that the raw material (cocoa) adheres to the strictest quality standards and suppliers must be certified. The company currently has a range of nineteen (19) different products, producing five quintals (500kg) of cocoa daily. Of these products several have entered national supermarkets and large chains such as CCN, which has provided the incentive for the company to continue to expand to other markets.
PRODUCTS:
CHOCOLALA SRL produce natural chocolates, wines, butter, and gofio.
Tipik Creations is a Haiti’s Eco Chic Unique Design and Artisanal Boutique for furniture and home goods. The Tipik Creations brand feature furniture, product designs and home goods that are inspired by nature and are complex in form and structure.
Created as a non-profit entity interested in building a country brand that facilitates the projection of products in national and international markets, ACHADOM brings together a new generation of tailors and dressmakers, committed to excellence. The company aims to boost chacabana into the distinctive apparel of the Dominican Republic and the Caribbean region.
PRODUCTS:
Dominican artisan chacabanas for ladies, men, and children.
Cristina Nunez, Artesanias produces handmade crafts made of natural and biodegradable materials, coconut jÃcara (calabash), cow horn, cow bone, wood cutouts, resin, amber and larimar. It is a whole cycle of work ranging from the collection of raw materials, design, elaboration, and sale of items placed in Dominican shops and gift shops, as well as small sales in Italy, Spain and rich port.
CHOUBLAC is a small Haitian company founded in 2010 under the umbrella of Caribbean Island Apparel, S.A. CHOUBLAC specializes in exquisite local handcrafted goods. The company’s mission is to promote sustainable change in Haiti’s artisan communities through innovation, design guidance, high standards of quality control and socially responsible trade practices. CHOUBLAC seek out, organize, and mobilize the creative talents of Haiti’s artisans, helping them to achieve beautiful products with lasting results. The company has two outlets in Haiti and have thrived over the past ten years to provide a reliable market for these artisans. Over 500 artisans within these communities benefit from CHOUBLAC business and many groups are mainly women.
PRODUCTS:
The CHOUBLAC Collection is unique and distinguishes itself from the usual Haitian crafts because the company constantly spends time innovating and improving the quality standards with the artisans and providing design guidance based on the current market trends. All CHOUBLAC’s products are skillfully handcrafted and represent the very best quality in their category. The company promotes economic growth in the communities in which it works and endeavors to enhance the image of Haiti through the beauty of its crafts and the talent of its people.
Combining chocolate with the finest ingredients XOCOLAT makes an exquisite variety of chocolates. Since 1993 -1999 the company has specialized in presenting and decorating its products to meet the demanding needs of its customers. In 2000 it began to enter the corporate market with customized products for the hotel and retail market. By 2005 Xocolat incorporated the pastry line using chocolate as its main ingredient.
The company operates a specialty chocolate store at the centre of Santo Domingo, with complete lines of different products all using their own chocolate brand Xocolat to produce beverages, bonbons, truffles, chocolates cakes and many different novelties.
PRODUCTS:
Xocolat produces chocolate bars for hotel amenities and gift shops including:
Caribbean flavours chocolate bars, 48 grs from origins Hispaniola cacao and 5 flavours distinctive from our Caribbean islands
Traditional bars 48gr, 5 flavours, pure flavours of our 100% Hispaniola cacao
Rustic aged Dark chocolate bars 22gr, 4 flavours, first grind process chocolate, purest form of eating raw chocolate, very dark and
Dawson Trading Company Limited: www.easypickinsja.com,
Country:
Jamaica,
Sector:
Agro-processing and Distribution,
IMMEDIATE IMPACT:
Product Development – 6 new (shelf stable) products;
MID-TERM IMPACT:
Increase in staff – 6;
Increase in exports – 17%;
Impact on Sector (suppliers, etc.) – increased revenue;
Increase revenue/sales –20%;
Profile:
Dawson Trading Company Limited (Dawson Trading) was established in 2013 by owner, Jordan Dawson. The company specializes in the growth, procurement, and exportation of traditional Jamaican fresh produce including mangoes, breadfruit, avocado, peppers, and yams, to overseas markets primarily Canada, USA, and the UK.
The Issue:
Dawson Trading sought to address several main concerns facing the Jamaican produce sector, namely: reducing spoilage; increasing volumes purchased from small and rural farmers; and accessing new markets. In addition, the company wanted to increase revenue; create new attractive and necessary product lines for overseas customers; keep workers employed for longer periods of time; and earn foreign exchange.
Assistance Received:
Dawson Trading’s received a financial grant via the Direct Grant Assistance Scheme (DAGS) in 2018 funded by the European Union under the 11th EDF Regional Private Sector Development Programme. With the grant Dawson Trading sought to develop a viable methodology to keep fresh fruit in its natural state for longer periods of time by processing/peeling, blast freezing and storing the product items in a frozen state. The project included the identification, acquisition, and installation of production equipment for the processing of fresh produce, the development of food safety – HACCP plan and recall program to meet HACCP certification. In addition, the project also included marketing and promotions including the creation of a website and suitable branding for the packaging and labelling of the products.
Immediate Impact/Outcomes:
The production equipment acquired, through the DAGS, has enabled Dawson Trading to create a new line of six different shelf stable flash frozen fruit products. This has allowed the company to increase the quantity of produce purchased from local farmers. Notably, these purchases now include bruised and below standard fruit, which would previously have been discarded. This action has, therefore, reduced wastage and increased revenue generated for Jamaican farmers.
The acquisition of machinery for processing fresh produce was central in producing a new product line of frozen fruits, for the export market. Frozen products are now exported to North America, Europe, and the Caribbean. It has also increased the volume of purchases, reduced spoilage, and increased revenues for suppliers, by purchasing below standard produce (with no effect on the final quality of the product) and higher volumes during peak bearing season.
In addition, the company developed a website and a logo. Training was carried out for the implementation of food safety standards for key staff members and major work was done on documentation and improvement of the facility towards HACCP certification.
Medium-term Results and Impact:
Over the medium-term, the DAGS project enabled Dawson Trading to increase staff by 6 employees, namely an administrative assistant, a driver, and 4 labourers. In 2020 the company’s exports increased by 17% and revenue/sales increased by 20%. Of this percentage 2% was from the flash frozen line. The project also significantly increased revenue for local farmers because they can now sell more volumes including bruised products.
The COVID-19 pandemic severely affected the export demand for fresh produce which were previously Dawson Trading’s primary export and the new product line provided considerable revenue to supplement the shortfall. Further, Dawson Trading’s increased purchase volumes from local farmers supplemented the farmers’ revenue shortfalls that occurred, due to shutdowns in the tourism sector (hotels).
“The Direct Assistance Grant Program (DAGS) through the Caribbean Export Development Agency, has been instrumental in helping to equip my company with the provisions needed to propel it into its next stage of growth. Primary drivers for this growth were the implementation of food safety systems and the tooling of our factory to further develop our line of Jamaican flash frozen produce. Without the DAGS project, the company’s survival would have been unlikely during the pandemic.†Jordan Dawson, Owner.
Internationalization has created an interconnected globalized economy for the trade of goods and services, to customers of varying languages and cultural backgrounds dispersed over large geographical areas.
For small and medium-sized enterprises (SMEs) internationalization provides opportunities to become successful, viable global traders; however, trading outside one’s borders is not without challenges.
This article will discuss what are Technical Barriers to Trade (TBT), with specific focus on standards and regulations, and how these measures hinder trade. The section on ‘Industry Dynamics’ will highlight challenges experienced with TBTs because of the lack of harmonization between countries, and their consequential impact on business operation relative to size, cost, efficiency, and growth. Finally, targeted advice will be given, and official trade support channels provided to aid SMEs in navigating these barriers and make their products export ready.
Small and Medium-Sized Enterprises (SMEs)
The World Trade Organisation classifies SMEs as firms employing between 10-250 people, possessing a strong presence in trade: but representing only a small share in a country’s exports, with a narrow product range and target markets. Due to their narrowness in scope, that is, product portfolio and target market, many trade barriers negatively impact SMEs’ internal operations, ability to expand, and increases their fixed cost. As a result, SMEs experience an erosion of competitiveness because of higher priced goods.
Technical Barriers to Trade (TBT)
According to Business Development Bank of Canada (2020), a Technical Barrier to Trade (TBT) “is any regulation, standard or procedure that could make exporting goods to another country difficult” TBT’s, specifically standards and regulations are the most common, highly frustrating and at times unwieldly barriers experienced by SMEs.
Standards and Regulations
Standards are agreed levels of quality, whereas regulations are directives imposed and maintained by authorities or bodies such as International Trade Organisation. Examples of Standards are labelling, packaging requirements and production standards.
Regulations surround the use of chemicals or additives and general best practices. They are important as they are designed to protect animal and human safety and health. Regulations prevent deceptive practices, ensure quality while protecting the environment, and empowers knowledgeable customers to make proactive choices.
Although these measures are positive and offer a level of safety, some can be used as tools to hinder exports and imports from various countries, cripple economies and stagnate business growth and development.
Tools of Hinderance
The US International Trade Commission cited the disadvantages faced by American agricultural exports to the European Union (EU). Although the issues lie in harmonization of standards, the basis of the challenges faced still surround standards as a technical barrier to trade.
On a worldwide scale, Figure 1. illustrates the global share of goods subject to import regulations and standards. The dark concentration represents the areas with the highest concentration of import goods, which is 75% of global trade, subject to these regulations.
Goods destined for major European markets are predominately identified as those subject to technical regulations. This supports the position of the United States Trade Commission and underscores the need for greater harmonisation of these policies.
Industry Dynamics
Industry research conducted cites various compliance issues incurred by American manufacturing SMEs relating to standards and regulations, the lack of harmonization between nations on testing and the issuance of certification.
One such example is the controversial issue of food additives and Genetically Modified Organisms (GMOs) levels in products for export to EU markets from the United States. The EU through its regulations allows for low level presence of GMOs, however the non-harmonisation of standards and conformity testing practices remains the challenge. The US International Trade Commission confirmed companies which were certified by the American National Standards Institute still encountered problems selling products in the EU market due to discrepancies in standards and testing procedures between the American and European standard bodies. This lack of harmonious cohesion surrounding the preconceived high levels of GMOs in American food products has continued to fuel the debate between the two nations.
A similar situation occurs between the EU and United Kingdom (UK) in the organic food sector where conformity assessment does not start and end with the manufactured final product but extends throughout the food supply chain to the suppliers of raw materials. See the Food Supply Chain chart.
Source: Kiger, P. May 2020. Supply Chain 101: What happens when our food supply is Disrupted by a Pandemic.
The US International Trade Commission ranks the UK and the EU as the third and sixth largest target market respectively for organic products. The global shift towards a healthier lifestyle is apparent. This underscores the importance for SMEs to know all elements contributing to a product. These technical distinctions create major export barriers for SMEs if not intimately versed in their suppliers’ practices. The potential result is a higher administrative cost to assess and trace all suppliers within their global food supply chain network.
How can SMEs Navigate TBTs?
A myriad of factors must be considered to competently address and navigate the waters surrounding Technical Barriers to Trade (TBT). The following are key steps companies can take when considering new export jurisdictions: 1. Conduct Market Intelligence on new target market, 2. Identify target market requirements, 3. Determine the type of product to produce, 4. Verify the quality and certification of raw materials sourced as inputs, 5. Identify the production and human resource capacity needed, 6. Acquire the technical knowledge to comply with both local and international standards and regulations, 7. Have a realistic outlook on time, effort and the correlating impact on cost associated with compliance.
It is important to note that the severity of the impact of TBTs on a business is subjective and depends on the firm’s size and scale. Nonetheless for most SMEs the impact hits where it hurts…in the bottom line! The production of most SMEs is narrow in scope. With limited market diversification and restrictive financing. They simply do not possess the flexibility needed to meet such challenges. This inelasticity transcribes into higher priced goods and the loss of market competitiveness. In contrast, larger companies through economies of scale can absorb and spread fixed costs resulting from barriers, over broad sales volumes. They have greater access to funding, can spread risk and ensure consistent revenues through product diversification. This helps to keep the selling price of individual products down which in turn helps to maintain a competitive edge.
SMEs must be cognizant of these variables in their decision-making process.
Trade Support Channels
There are numerous Business Support Organisations (BSOs) and bureaus which facilitate and provide a wide breadth of in-depth information and guidance to assist SMEs around various trade matters especially TBTs such as standards and regulations. Collectively these organisations are supported by regional governing bodies and agencies like the Caribbean Export Development Agency which provides support to SMEs to strengthen their institutional capacity and export competitiveness. This work will contribute to the creation of an ecosystem of export-ready SMEs.
Regardless of the trade challenges faced all is not lost! With the right tools, knowledge, and support, barriers will dissolve into dust and be swept away on the tide of success!
Enhanced Productive Capacity and Efficiency – 7-8%;
Product Development – 4 new products;
Reduced Operational Costs/Wastage – 7-8%;
MID-TERM IMPACT:
Increase in staff – 23% or 10 employees;
Increase in exports – 10% (2019);
Entry into new market – Jamaica;
Profile:
Cummings Wood Products (CWP) founded by Andre Cummings (CEO) in 2008, produces and exports flooring and decking to the Caribbean. The company’s vision is to be the leading flooring company by enhancing beauty and value with its products and services.
The Issue:
CWP was challenged with high production costs due to the low production capacity of current machinery and low level of recovery from raw materials. The company also wanted to reduce the environmental impact of its production processes; offer quality products at an affordable price to consumers; create jobs and develop the economies of Guyana’s rural communities.
Assistance Received:
In 2018 CWP received a Direct Assistance Grant funded by the European Union under the 11th EDF Regional Private Sector Development Programme. The funds enabled Cummings Wood Products’ to implement a plan to increase the yield from raw material (hardwood) and lower the company’s production costs, through economies of scale. The project included the acquisition and installation of production machinery to make new hardwood product lines, and transform off-cuts, end trimmings, etc. into saleable hardwood products, to increase the percentage rate of gross timber resource inputted into the production system.
Immediate Impact/Outcomes:
The acquisition of new technologically advanced production equipment allowed CWP to aggressively pursue value-added development per Guyana’s National Log Export Policy, intended to curb the export of round logs in favour of downstream value-added products. Aggressive product development and innovation was completed to ensure all product dimensions satisfy buyers.
The company expanded product lines include ‘custom-built’ modular kitchen cabinets, standard and customised chest of drawers, framed and paneled doors and end matched flooring. The company also saw significant improvement in productivity performance, cost minimization and production yield output at all cost centers throughout the manufacturing plant.
Production and maintenance downtime, change-over (set-up) loss time, dropped, with better up-time and line availability at the machine lines. Factor and total productivity and surplus production yield performance were consistently achieved monthly at all cost centers, machine lines, and at the plant level. In addition, two members of the management staff benefitted from certified technical training overseas and were instrumental in disseminating formalized in-house training to lower-level staff.
Medium-term Results and Impact:
In the medium-term, the production machinery acquired by CWP through the DAGS increased the yield from raw materials by 20%. This reduced the demand for the quantity of trees needed and thereby reduced the environmental impact from production. In addition, promotion of lesser-known hardwood species is expected to reduce the likelihood of overharvesting popular species. Wastage from forest produce was also minimised by utilising wood pieces as short as 6 inches.
The new machinery also enhanced productive efficiency and reduced operational costs by 7-8%. The approximate increase in export sales induced by the project was 10% and the number of staff increased by 23% or 10 employees. The company also successfully entered the Jamaican market.
“The Direct Assistance Grant Scheme is absolutely relevant and indispensable for private sector development. Often times than not, most entrepreneurs / business owners in the private sector are cash strapped and are trapped in a cycle of repaying large sums of debt equity from insubstantial turnovers (profits), all in a dire effort to keep their businesses afloat. Moreover, most private sector businesses, particularly young start-ups, lack the financial resource to invest in critical capital acquisition, to take their businesses to the next tier of performance. Access to reimbursement funding from the Direct Assistance Scheme serves as a major help to suchlike business owners, and also to other entrepreneurs who would want to access such funding, even as they seek to develop strategic alliances with Caribbean Export to benefit from the other service platforms. Andre Cummings, CEO
