Good Middle East sales prospects seen

Press, 19 June 1979, Page 20

Good Middle East sales prospects seen

Wellington reporter New' Zealand can hope to compete successfully for markets in the Middle East in competition with Australia and other sellers within three to tour years.

This is the opinion of the general manager of the Bahrain New Zealand Trading and Storage Company (8.A.N.Z.) Mr R. Hitchcock, at present in New Zealand on a familiarisation trip. New Zealand had been too timid in the area in the past, he said- Not nearly enough New Zealanders had been there and there had been no marketing strategy for the region.

Australia had exported goods worth SUSI3OM last year but New Zealand had exported only goods worth SUSIOM. Mr Hitchcock hoped New Zealand would be able to compete realistically in certain products within three years.

The market was tor primary food and foodstuffs, plus freezers and refrigerators, provided prices were competitive and freight costs were not too much of a problem. The shipping service there was very good. Mr Hitchcock said he was very pleased with the attitude he had found in New Zealand to B.A.N.Z.

facilities and activities. Saudi Arabia and North Yemen were singled out as the best market prospects. For political reasons, Saudi Arabia was supporting . the development of the North Yemen economy, and New Zealand had just sold a big consignment of honeycomb there. Prices in North Yemen were described as “fantastically high.'’

“The whole ot Arabia and the Middle East have been penetrated quickly since the oil boom of five years ago,” Mr Hitchcock said. “There are no sud-den-growth markets left, but there are opportunities for long-term market penetration.”

b.a.n.z. would bypass the route from New Zealand seller to Middle East buyer. Initially it would buy from New Zealand firms and sell to customers, but there was a need for a New Zealand subsidiary to do the buying here and then sell to B.A.N.Z. for further sale. While in New Zealand, Mr Hitchcock has been establishing this New Zea--1 a n d subsidiary of B.A.N.Z.

“The Arab works on close personal contacts,” he said. “Monthly visits by B.A.N.Z. to clients will

soon supplant any distant contact with a New Zealand seller via telex.”

Initially, B.A.N.Z. would not play the market. But once established it might buy perishables (such as strawberries) and hold them in store to be sold at a propitious moment.

A prospectus would be prepared soon to offer New' Zealand shares in B.A.N.Z. Mr Hitchcock reported considerable interest in this step. Shareholders would then have a stake in 8.A.N.Z., but their goods would not receive preferential treatment over that of nonshareholders.

Further, if goods on order could not be obtained in New Zealand, B.A.N.Z. would have nd hesitation in buying them elsewhere.

He agreed that New Zealand could obtain better prices for some of its products on other markets, and that the Middle East was still well down the list for sales of many products. But he predicted that once the “M.K.” (Muslim kill) problems had been solved for New Zealand sheepmeats, the attitudes of meat exporters to the region would change when they realised the potential size of the market.