David Hollander’s innovative streak is being put to the test. He is scoping out new markets thousands of miles from the English headquarters of Aqualisa, a £41m turnover shower-manufacturing business he runs.
“If we’re going to grow our export business, it has to be done in an entrepreneurial way,” he says. Restricted by a lean budget, he is researching wholesalers and has considered “selling under another brand” to allow Aqualisa to expand overseas. Businesses that were once domestic competitors are now potential allies, he says — such is the flexibility required to become a first-time exporter.
Full articel in Financial Times http://www.ft.com/cms/s/2/2ef2081e-21be-11e6-9d4d-c11776a5124d.html#ixzz4KuuK4mXA
While growth is continuing at a moderate rate in Europe, significant parts of the world economy are grappling with major challenges. Growth in the euro area in 2016 is expected to continue, but the recovery is slow, both in historical perspective and compared to other advanced economies. While the renewed drop in energy prices should continue to boost households’ real incomes and consumption, public consumption has surprised on the upside due to the arrival of unprecedented numbers of migrants fleeing war and insecurity in Syria and elsewhere. Fiscal policy more generally is expected to support the recovery this year, and monetary conditions are set to remain highly accommodative. However, despite the continued confluence of supporting factors, the acceleration of economic activity expected this year is minor: GDP in the euro area is forecast to expand by 1.7% compared to 1.6% last year. Growth should pick-up further to 1.9% in 2017 but this will depend crucially on a rebound in investment, which has so far remained elusive and is sensitive to the materialisation of the risks surrounding the central scenario.
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According to the preliminary statistics of foreign trade of goods provided by Finnish Customs, the value of Finnish exports decreased by 13 per cent and the value of imports by eight per cent in July compared with the year before. The value of Finnish exports in July was 3.9 billion euros and the value of imports was slightly over 4.1 billion euros. Calculated from the beginning of the year, exports have diminished by six per cent and imports by a per cent.
The trade balance showed a deficit of 245 million euros in July. Calculated from January to July there was a deficit of almost 1.3 billion euros. Under the same period last year, the balance of trade showed a surplus of 262 million euros. Last year the trade balance for July showed a deficit of four million euros.
Exports to EU member states decreased by 12 per cent and exports to non-EU countries by 15 per cent in July. Imports from EU-countries decreased by six per cent and imports from non-EU countries by nine per cent in July. Calculated from the beginning of the year, exports to EU countries decreased by four per cent and exports to non-EU countries by ten. During the same period, imports from EU member states remained at the level of the previous year and decreased from other countries by three per cent..
A number Japanese companies and banks are considering participating in the financing and construction of the third stage of the Sakhalin 2 LNG project in Russia’s Far East, it has emerged, as Japan managed to steal the show at last weekend’s Eastern Economic Forum in Vladivostok by signing some 20 agreements worth more than $1.3 bn with their hosts.
The size and range of the project financing committed to by Tokyo is being interpreted as an attempt by Prime Minister Shinzo Abe’s government to redress Russia’s current leaning towards China and to break the 50-year impasse over the South Kuril islands.
“During the negotiations at the Eastern Economic Forum 2016, representatives of Japan … showed interest in the financing and construction of the third stage of the Sakhalin-2 LNG plant,” Energy Minister Alexander Novak told TASS. “In addition, they would also like to expand the supply of hydrocarbons from the Sakhalin projects,”
Gazprom later confirmed that it had been in discussions with representatives from Mitsui and Misubishi concerning their future involvement.
News of Japanese interest in the project topped off a good week for relations between the two countries in which the Far East Development Minister Alexander Galushka and Japan’s Minister of Economy, Trade and Industry Hiroshige Seko agreed to draft a road map for future co-operation between the two countries which will include Japanese participation in the reconstruction of the international airport in Khabarov and will also cover construction of a Mazda Sollers car assembly plant in Vladivostok which was approved by the Russian government back in April.
The majority of UK small businesses (60%) are not exporting abroad, potentially missing out on millions of pounds in lost revenue according to new research from Royal Mail. The research released as part of Small Business Advice Week, lists key reasons for this, including the perceived cost and complexity of getting through customs (26%), a lack of knowledge of the market (21%) and language barriers (21%). The scale of the potential missed revenue is illustrated by the fact that among small businesses who sell internationally, just over a quarter of their sales (26%) this Christmas are expected to come from international orders.
Thirty-five percent of small businesses believe Europe holds the most potential to generate new sales for their business, whilst 28% believe the US and North America are the most promising markets. Other reasons given by small business owners for avoiding exporting were a lack of knowledge of the market (21%) and language barriers (21%).But the research shows that those who are not selling overseas are missing out. Among the 40% of business who sell internationally, just over a quarter of their sales this Christmas (26%) are expected to come from.
A further look into the export aspirations of UK small business owners found that 10% are currently selling to customers within the EU and would like to seek more opportunities to sell to non-EU customers. Fifteen percent said they sell outside the EU and would like to seek even more opportunities to sell to non-EU customers. While domestic online marketplaces are popular among small business looking to grow their UK customer base, only 25 per cent of small businesses look to international marketplaces to grow their sales potentially missing out of the huge sales potential they offer.
Source: Royal Mail
In September, the European Commission published the 2016 edition of the EU Consumer Markets Scoreboard, which provides an overview of EU citizens’ assessment of the performance of 42 key consumer markets across the 28 Member States, Norway and Iceland. This edition of the Scoreboard depicts an overall improvement in consumers’ trust and in their assessments as to whether markets meet their expectations, which mainly drives the increase in the Market Performance Indicator (MPI).
Market performance remains uneven and there remains considerable difference in the assessments across different Member States and sectors. An in-depth sociodemographic analysis, conducted for the first time, shows that the assessment of market performance is mostly influenced by the financial situation of consumers and their education. There is considerable continuity in terms of the rankings of both the goods markets and services markets assessed. In general, there is a wider dispersion in the performance of services markets across EU countries, than is the case for goods markets. The market for electricity services, water supply, railways transport, mortgages and mobile telephone show the widest MPI dispersion EU-wide.
EU Commission says that there are persistent issues in key utility markets, telecommunications and retail financial services markets, which underline the importance of the current drive to put the consumer at the heart of the Digital Single Market, the Energy Union, and the on-going work following up on the Green Paper on Retail Financial Services in the context of the Action Plan for a Capital Markets Union.
Cargo owners are likely to re-evaluate their counter party risk in shipping cargo with container lines after the collapse of Hanjin in South Korea and to prefer carriers that are transparent about their finances, according to analysts at Arctic in Oslo.
From the standpoint of cargo owners and shippers, the collapse of Hanjin will raise concerns about the reliability and creditworthiness of other container operators, they noted.
Container lines, including Hanjin, are right now carrying cargoes from the Far East to the markets in other parts of the world for Christmas in what is a peak season for the industry. The fact that the collapse of Hanjin coincided with this period is likely to heighten the concerns shippers and cargo owners have about the health of this part of their global supply chain.
“We also find that the situation will lead shippers to re-evaluate their preferred container operators with those having a transparent balance sheet, or at least willing to be transparent, benefitting. In our view this puts Maersk and Hapag-Lloyd ahead of the rest, although the Japanese players and COSCO technically do show their balance sheets,” the two analysts said in a report emailed to IHS Fairplay.
The prolonged weakness in container shipping freight rates has, in principle, favoured shippers as it has meant very low cost of ocean freight. However, the collapse of Hanjin shows that this has not been without a risk.
Container freight rates resumed a fall in June after remaining stable for the two previous months, figures released by Container Trade Statistics (CTS), the UK-based consultancy showed on 5 August. Its price index, which includes both spot and contract rates, fell by one point to 63 in June, a new low, after two months at 64 points.
Drewry, the London-based consultancy, forecast in the beginning of the year that the industry’s losses would exceed USD5 billion this year.
The longer low rates and deep losses prevail, the higher the counter party risk in container shipping has become as ultimately, the collapse of a major carrier would no longer be avoided.
Shippers and cargo owners that may have found the situation quite advantageous to them will now have to reassess it as the prospect of damage to their global supply chain following the collapse of a major container line can far outweigh at least short-term savings from all time low freight rates. The call for transparency that the Arctic analysts mention is an understandable consequence of the events.
Stavseth and Wikborg note Hanjin is the world’s seventh largest container line and it controls about 620,000 teu of capacity, including vessels chartered in, and point out that it is the biggest business failure in the container shipping industry.
They also note that its collapse may cause secondary tremors as vessels chartered by the company may be redelivered to owners, which would put downward pressure to charter rates. Any sales of vessels Hanjin owns could have the same effect.
Against that background, it must be reasonable to assume that the collapse of Hanjin can put additional pressure on already battered balance sheets on container lines and tonnage providers. In a worst case scenario, that may increase prospects of other business failures in the sector, with potential further challenges to global supply chains.
Reported by IHS Fairplay