The French Connection
p. 25 · Read in the full issue
Tradewinds
THE French Chamber of Commerce and Industry of New Caledonia and the French Chamber of Commerce and Industry in Australia have pro duced a brief, practical guide to doing business with New Caledonia a market that is undergoing rapid expansion. The French overseas terri tory is embarked on a major bid to attract new industry and business.
More than 163,000 sophisticated consumers in that territory now spend As 2 billion annually, and there are some fine new opportunities for two way trade with the rest of the Pacific, and with Europe.
The strengthening of its economy through improved trade and invest ment is meanwhile seen as a vital way of ensuring that New Caledonia will become more fully integrated into the region and its long-term dependence
on France reduced. Recent liberalisation of New Caledonia’s trade and investment policies should certainly help that.
I’ve just read the report of a 40-member Australian trade mission of investors, exporters and importers that recently returned from the territory convinced there were lots of positive things happening there. The mission, the largest from Australia for many years, was arranged by the two French chambers in association with Austrade, and its members included many people already doing business in the South Pacific but not familiar with New Caledonia’s changed outlook.
Among the things that surprised them were the extent of the political evolution of the territory since the Matignon Accords, the high level of sophistication in Noumea, the genuine business potential in a variety of areas and the speed with which business can be done.
One member, John Alsop, director of the Melbourne firm of architects, Irwin Alsop Group, said, “The government is serious about making it easier to do business there, and that means the ability to do business more easily with France and with the Common Market.”
Import restrictions on a number of products have been reduced or abolished, there are tax incentives and businesses can take advantage of new subsidies and other incentives to set up there as a springboard into Europe. Investment aids include up to 50 per cent of the cost of a feasibility study, up to 40 per cent of the cost of setting up a factory and up to 50 per cent of employees’ social welfare costs. There are low cost loans available.
Nor does the financial support come only from New Caledonia. Because the Common Market wants to promote the development of the more outlying regions of its member countries, there are additional European Community financial packages available.
The EC will recognise a product as coming from New Caledonia if it has between 20 and 60 per cent of added value, depending on the product, put on it in New Caledonia. With such recognition there will be no restrictions on quantity or value of the goods and they will be free of customs duties into Europe, with its 340 million consumers.
It thus seems that business people who want to export to Europe might do well to first visit New Caledonia.
Now what of this practical guide to doing business there that I spoke of? The guide was prepared by the two chambers for the benefit of the mission members, but in fact the tips in it make a lot of sense for anybody doing business anywhere.
In choosing products for the New Caledonia market you have to remember that a manufactured article must be well made and durable, for consumers are de
manding. The product’s packag
ing is critical; even if the product itself is of the highest quality, damaged packaging or incomplete technical documentation may rule it out.
Orders must be carried out quickly and according to instructions with the order; delivery times in particular must be respected. There must be full and efficient after-sales service or the product’s image could deteriorate rapidly. And there must be price competitiveness.
The guide comments, “All products that comply with these conditions can find an outlet. No sector is excluded.
However, when making a first approach to the market it is always better to try with a product that does not yet exist in New Caledonia or brings in some quality and innovation, rather than set out in immediate competition with French or other foreign products already well established.”
Among the mistakes to be avoided in approaching the New Caledonian market is lack of preparation. Have a clear idea of the objectives of your visit and know what you are selling or buying. Provide attractive catalogues, preferably in French. Provide reference lists and up-to-date prices and present samples if possible. Be patient and available. This type of preparation is expected by New Caledonians.
Otherwise you risk having your professionalism questioned or your genuine interest in the market doubted.
It may take a couple of months to one or two years to establish the first solid business link with a New Caledonian partner. You will need to make regular business visits to ensure follow up, on average two or three times a year.
The chambers’ guide adds that the companies that have the best chance of success in New Caledonia are those that already have export experience and fully understand the need for adaptation to market conditions and are prepared for medium to long-term investment.
If you want more advice, the address of the Chamber of Commerce and Industry in New Caledonia is 15 rue de Verdun, BP M 3 Noumea Cedex, phone (687) 27 25 51, fax (687) 27 81 14, and the French Chamber of Commerce and Industry in Australia is at 350 George St, Sydney, phone (02) 2236146, fax (02) 2236706. Or contact me or one of the staff here in Sydney at the Forum’s South Pacific Trade Commission office, phone (02) 2835933, fax (02) 2835948.