Japanese model for N.Z. traders

Press, 4 April 1985, Page 12

Japanese model for N.Z. traders

The concluding part of an article by MICHAEL HANNAH on the problems and prospects ahead of New Zealand companies seeking trade with South-East Asia.

A strong lesson for the trade mission was contained in the information that Japanese tenderers helped their own countrymen in drawing up their contract conditions. Consultants on the trade mission, particularly, were impressed, and took home the idea that they could make more joint approaches in overseas markets, rather than compete to the extent that other New Zealanders were excluded from the market.

While Mr Moore proudly informed A.S.E.A.N. Government Ministers and officials that our import restrictions were being dismantled, hinting that there was more room for A.S.E.A.N. exports to New Zealand, the Japanese clearly survived in the region with all their import restrictions still

intact. How much of a bargaining position would be gained over our competitors by easing New Zealand’s import restrictions has yet to be seen. There was little evidence on this whirlwind tour of its cutting any ice with A.S.E.A.N. traders. Patience, as one businessman noted wryly, is a virtue required in the region. The benefits of trade with most of the A.S.E.A.N. countries lie in the future. Goodwill gestures and promotional visits made now — a “dating service” rather than a “mating service,” as Mr Moore described it — would make it easier for New Zealand to reap rewards when the economies of Thailand, the Philippines, and Indonesia improve. Or so the argument goes. Like all marketing exercises, the ex-

pense of initial promotions are a gamble, which a company or country has to be prepared to write off if markets do not eventuate, and yet has to incur for the advantage they may provide in the future. Aid projects are a case in point. Companies benefit commercially from them. The Government has to regard them as both charity and an investment in future, bigger; commercial contracts. Much of New Zealand’s aid in A.S.E.A.N. is channeled through the Asian Development Bank, which will conduct seminars in New Zealand this month to improve New Zealand consultants’ chances of gaining contracts. New Zealand’s problem has been one of poor presentation in the main, though ignoring project conditions has also been a fault of New Zealand tenders, according to bank staff. The benefits of aid can be small, like the order placed in the Philippines by the president of a major company for three mobile sawmills. The order, worth $60,000, arose from an aid project in the

late 19705, when a single sawmill was provided by New Zealand. Or the benefits can be potentially huge, like the possible conversion of 10,000 buses in Thailand (5000 alone in Bangkok) to compressed natural gas. New Zealand companies, including Welgas, have been involved in an aid programme in which a trial number of diesel-powered buses have been converted to c.n.g.

Companies seeking the big conversion contract are prepared to work together to prepare a package tender for the Thai Government, illustrating one of the benefits of the trade mission’s visit. Another benefit of the visit was the passing on of experience to newcomers in the trade mission. Mr David Everard, export sales manager for the Christchurchbased refrigeration company, Skope Industries, spoke highly of the help he received from Ballande New Zealand’s general manager, Mr Graham Kearns, in Indonesia. Mr Everard said his introduction to Ballande’s contacts in Indonesia probably saved him

the five or six years other companies said it took to find the right contacts and agents. It has to be remembered that the trade mission to A.S.E.A.N. member countries was one of several visits companies expect to make to the region before deals may be signed. They spoke of the advantage of having a Cabinet Minister present who could open doors to Government Ministers and add credibility to a company’s presence. While opportunities in a variety of exports were investigated on the trade mission’s tour, agriculture remained the dominant and immediate concern, if only because it is still New Zealand’s biggest export-earner. The threatened labelling regulations in Malaysia, requiring retail foods to be labelled in the native Malay language; future livestock exports, and the fate of past ■livestock cargoes, to Thailand and Indonesia; access for beef exports to the Philippines; payment of debts to the Dairy Board in the Philippines; import quotas in Indonesia — all were issues requiring attention. An encouraging note for the diversification of New Zealand’s exported products was the activity of other members of the mission. Technology transfers, and the construction, tourism, natural gas, newsprint and software industries were all represented. Behind them were financiers, represented by three trading banks, the 8.N.Z., A.N.Z., and National banks, and by Marac Holdings, the N.Z.I. Group, and the Development Finance Corporation. The tour gave these financiers a chance to promote their services, and to lend further weight to the mission. Although they maintained a low profile during the tour, apart from the National Bank’s impromptu announcement of a business scholarship in Thailand, and the B.N.Z.’s quiet assessment of opportunities for its new trade consultant in Singapore, their representation was significant in size. It reflected the more intense competition which has characterised their business in New Zealand since the change of Government last year and the relaxation of many financial controls. Direct competition, however, was not evident on the tour and there was a tendency in other sectors to try out joint approaches, more particularly as the restrictions of trade in the region became more apparent to newcomers.