THE idea of clustering at community-based or grassroot level has been discussed previously but briefly in this column.
The idea of forming co-operations has proven to be a success world wide especially for community-based companies.
Basically, export joint ventures offer small companies the opportunity to spread or reduce costs and risks by offering economies of scale. This would work greatly for small medium-sized companies or those with limited export experience and resources. Co-operation at community level can go a long way in terms of trying to negotiate rates for buyers, rates at the shipping ports or cost of transportation.
The term export consortia refers to the voluntary groupings of enterprises usually in same or similar business or sector of export with the aim of improving their export readiness and export volumes. For example, one district in Vanua Levu has 10 dalo farmers who send their produce either packed and ready from Savusavu to Suva to an exporter who will process, package and export.
But every month they find the challenge of:
* paying the cost of transportation to the wharf,
* competing or undercutting each farmer in trying to sell their products at the wharf to be shipped to Suva.
* trying to keep up his monthly quantity or consistency of supply.
* and for some the high cost of shipping their products or commodities to Suva —freight and handling charges.
This is what small business advocator and export readiness expert Steve Codeiro has been driving into farmers and producers.
"If this farmer can fill one container of dalo and another can fill his with pineapples, why don't they just combine and ship it all out together or use the same road route," Mr Cordeiro said.
By combining knowledge, financial resources and business contacts, export enterprises may be able to overcome barriers which they would find hard to surpass individually.
"Together you would be in a better position to also negotiate charges for transportation, shipping or freight and also you remove the likelihood of buyers who try to make you work against each other. By combining resources means sharing of what the other does not have For instance, one farmer may have the packaging facilities while the others do not," Mr Cordeiro said.
So when these small enterprises form a core group their work load becomes lighter in terms of the overheads or cost of doing businesses.
Take for instance in Ghana, how they are one of the top suppliers of peas and soya beans to the UK after they set up their farmers' association working together for the export market.
In a united approach certain barriers are removed and:
* buyers will now source from one enterprise only seeing that it is consistent and always in supply. Farmers now have one or two guaranteed buyers.
* buyers will not have opportunity of using each producer/or supplier against one another to affect price of produce.
* Freight charges or shipping transportation charges can now be negotiated as only one group is in existence.
* Quality can also be guaranteed as all parties are involved. This means better and easier work with Biosecurity.
* Information and resource sharing can also be generated
* Consolidation of goods, i.e dalo, pineapples, cucumbers etc can now be supplied together.
* Joint ventures also greatly assist in accessing export markets.
In as far as consolidated goods are concerned we will leave you with the advice from Mr Cordeiro who has been in the business for over 30 years.
"Customers today or buyers in this sense are not looking for products, they are looking for a solution. If they can get 3-4 types of produce from one group, they will automatically latch onto that and forget the rest," he said.
* Jone Kalouniviti is a public relations officer with the Fiji Export Council.