Trading methods ‘a hindrance’

Press, 25 October 1984, Page 14

Trading methods ‘a hindrance’

From ROY VAUGHAN in Kyoto Most of New Zealand’s trade with Japan is conducted through a handful of large Japanese trading, houses, but according to a hard-hitting New Zealand report delivered in Kyoto last week, they are old fashioned and hindering trade in many areas. Delivering a paper on behalf of the New Zealand forest industry, the general manager of Canterbury Timber Products, Ltd, Mr A. R. Mac Gibbon, suggested many exporters would be better off moving away from the big trading houses and dealing directly with end users of their products in Japan. “New Zealand . generally questions whether Japan has modernised its market-

ing and distribution systems in keeping with present day requirements to minimise costs,” he said. The Japanese trading houses appeared to have developed primarily as international currency traders using largely unprocessed or minimally processed commodities as the vehicle. “Generally they appear reluctant to traffic in finished goods or those which have a high added value content, where some fashion is implied,” said Mr Mac Gibbon. Where they did handle these goods there appeared to be a reluctance to pass on benefits of this type of trade to the. end users, a practice sharply in contrast to their Korean counterparts.

A previous block, preventing New Zealand exporters from dealing with Japanese end users, was the lack of credit facilities. The big trading houses traditionally provided credit for their customers. The recent liberalising of New Zealand currency restrictions now made it possible for New Zealand comS‘ ! to match the big g houses’ credit services, he said. More and more New Zealand exporters were likely to by-pass the trading houses as a result. As far as the forest industry was concerned, the trading houses still provided a useful role handling chips, pulp and paper but direct dealings with end users of

panel products, sawn timber and other added value goods would achieve better market penetration. Mr Mac Gibbon’s theme is likely to be taken up by many other exporters because of the New Zealand Government’s supported push to develop added-value products. In many instances there are already industry to industry links in marketing and developments, particularly with the dairy and fishing industries, but for exporters and potential exporters of finished products . initially it may mean spending more time and money seeking out those Japanese companies which sell directly to the public.