Impactful trade leads reported during the second China International Import Exposition (en)
Companies supported by ITC’s Partnership for Investment and Growth in Africa (PIGA) project reported impressive results from their participation in the China International Import Expo (CIIE) held in Shanghai from 5 to 10 November 2019.
Twelve companies from Ethiopia, Kenya, Mozambique and Zambia, with an offering predominantly focused on agricultural products, have initiated more than 450 potential business deals worth $55 million in trade value and concluded 36 deals.
Of the 12 PIGA-supported companies at CIIE 2019, half were returning participants from 2018, and four had concluded deals following the first edition and progressed further on previously established business relationships.
Huge development potential
The attendance and number of potential trade deals struck during CIIE demonstrate the interest of a growing Chinese middle class in diverse products and the great potential for African products to penetrate this market.
Mr. Don Larson, CEO and founder of Sunshine Nut Co., which produces roasted and flavoured cashew nuts, said: “We had about 200 companies interested in our product lines. They ranged from importers to trading companies, to distributors, e-commerce sites and retailers. We had some premium large retailers sign memorandum of understanding documents in front of the large Bank of China crowd. Five agreements were signed.”
The potential development impact from those trade leads is vast in terms of creating jobs because most of these companies operate in labour-intensive agriculture and agro-processing sectors, usually working with out-grower schemes, as is the case for Sunshine Nuts and Zambian honey producer Dytech.
Alan Chanda of Dytech said: “I concluded five deals to export more than 400 tons of honey and I think it was a remarkable achievement to attend CIIE. The entire value chain of rural out-growers of honey will be positively impacted through these export deals.”
Trueways Enterprises Ltd., a company that participated in the 2018 exposition, started a partnership with a Chinese company to adapt its products to Chinese tastes. The two companies worked together to create new packaging that was tested during the 2019 exposition – with very positive feedback from Chinese visitors.
Meanwhile, Home Comforts Ltd., a company producing flavoured and herbal tea, coffee, and moringa and hibiscus drinks, initiated lots of trade partnerships and also met potential partners for e-commerce development, product packaging customization for the Chinese market and suppliers of tea bag packaging machines. All these partnerships could improve the company’s competitiveness in international markets.
Mr. Biran J.W. Muchiri, Director of Home Comforts Ltd, said: “The high potential and positive feedback witnessed at CIIE have reinforced our commitment to develop long-term business relationships with entities that would enhance our market entry and sales coverage capacity in order to serve the China market effectively. Through our participation, we improved our knowledge of the Chinese market, identified an efficient and cost-effective way of accessing this market via a distribution arrangement and product development plan, and reinforced contacts with current and future Chinese business partners and service providers.”
Leverage for reforms and progress on trade agreements
Despite the huge demand, exports are still limited for certain products due to missing trade agreements between China and the four PIGA countries. CIIE is, therefore, an excellent platform to demonstrate the huge market and development potential and motivate governments to progress on trade agreement negotiations.
For instance, as a follow-up of CIIE 2018, a task force was created to supply the Ministry of Foreign Affairs of Mozambique with all the required information to make progress on bilateral agreements related to agricultural products exports from Mozambique to China. The agreements on sanitary and phytosanitary (SPS) requirements should be finalized soon. Meanwhile, some companies can export to China, either by going through another country first or using costly international certifications that are unaffordable for most companies.
Mr. Rateneh Fassil, Managing Director of Sinopia, a company trading coffee, beans, peas and oilseeds from Ethiopia, reported $200,000 in transactions in sesame after participating in CIIE in 2018. He said: “The deals were limited because of price levels. Chinese buyers recognize the quality of our sesame, and we do not have any capacity issue, but our issue is pricing because we are not competitive enough. The Ethiopian Government is now coming up with very conducive policies for export businesses, so things should be better.”
Mrs. Daisy Diangamo, Managing Director and Co-founder of Daisy Meats Ltd, a Zambian company specializing in pork and poultry processing, said: “Business has been great. Overwhelming. For the supply side to meet the demand side, we are looking for investors to expand our production capacity, and improve our value chain through better technology and upgraded refrigeration housing. We are very happy because we had very good and focused meetings with potential investors.”
Mrs. Diangamo added: "The experience is still a game-changer for me, even better this year, with all the preparedness via ITC. The market opportunity in China for meats is clearer. What remains is to exploit it by addressing capacity and bilateral issues as a country. We were invited by a potential buyer to visit their operations in Hunan. This has enhanced our understanding of buyers’ expectations in terms of regulatory compliance packaging and labelling of our exports.”
[Click on the links to see videos of Mr. Fassil, Mrs. Diangamo and others speak about their experience at CIIE 2019.]
Adequate support and preparation from PIGA
Mrs. Irene Kalondu Mumo, Managing Director of Trueways Ltd, said: “We at Trueways Ltd. are very thankful to PIGA for the opportunity to attend CIIE 2018 and 2019. The preparation through online training, advisory support and sponsorship has greatly profited our company. Through this journey, Trueways has gained a lot of exposure. We are now at the final stages of completing a very profitable partnership. We look forward to continuing our partnership with PIGA.”
In addition to organizing companies’ participation in the expo, ITC has also held a meeting to discuss the importance of sustainable investment practices in the agro-processing and light manufacturing sectors in Ethiopia, Kenya, Mozambique and Zambia and a briefing session on SPS and custom requirements was organized for all ITC supported companies attending the CIIE.
PIGA will continue to provide support to PIGA companies in the process of finalizing and materializing prospective deals.
PIGA is part of Manufacturing Africa, a flagship programme of the United Kingdom of Great Britain and Northern Ireland’s Department for International Development (DFID) facilitating foreign direct investment with high development impact into selected African countries.
Under Manufacturing Africa, PIGA aims to contribute to job creation and sustainable growth in Ethiopia, Kenya, Mozambique and Zambia by supporting these countries to attract foreign direct investment, specifically Chinese investment, in the agro-processing and light manufacturing sectors. PIGA is also designed to enhance the capacity of these countries for effective investment promotion.
PIGA is implemented by the International Trade Centre (ITC) in cooperation with the China Council for the Promotion of International Trade (CCPIT) and the China–Africa Development Fund (CADFund).