How to export Chilean products to EFTA Countries - Norway

Thomas Angell, executive directorHSH

(Federation of Norwegian Commercial and Service Enterprises)

Santiago, 10 April 2008

March 28th 2008

HSH in brief

• HSH is the principal organisation in Norway within the trade and service industry

• In trade, HSH covers all sectors and sales activities, i.e. retailers, wholesalers, agents, importers and chaines within all sectors.

• Most Norwegian imports are dealt with by companies belonging to HSH

• Besides commercial interests, HSH ranks among its members voluntary organisations, private health and care institutions, museums, travel companies, accounting services, employment bureaux and other organisations

Trade provides the basis for, and is therefore a prerequesite of, economic growth and thus the improvements to the common good.

Because of this, and because HSH is the organisation for Norwegian commerce, HSH has always been interestet in the conditions for international exchange of goods and services and HSH’s attention in these matters is particularly focused on imports to Norway and the significance of these imports.

Norway in international trade:

• 0,1% of world population• 1,2% of world export• 1,1% of world import (€ 70 bill. in 2005)• 75% of GDP consist of trade (average OECD 45%)

Norway is one of the smallest countries in the world, but

• no 28 largest exporter• no 38 largest importer

Norwegian imports:(BILL NOK)

• Capital goods 70,5• Intermediate goods 133,5• Construction materials 36,4• Fuels and lubricants 14,3• Consumption goods 83,0• Passenger motor cars 19,9

Norwegian imports:

Less than 25% is consumption goods!

Consumption in Norway – Opportunities?

•

Consumption in households in Norway 2006: NOK 842 bill.

Commodities: 54%

Services: 46%

Shares of consumption of commodities/goods:

Food, alcoholic beverages, tobacco: NOK 143 bill. (33%)

Furniture and household articles: NOK 50 bill. (11,5%)

Clothing and footwear: NOK 45 bill. (10%)

Norway's imports of commodities 2006 Value: NOK 411 684 million

0

10000

20000

30000

40000

50000

60000

70000

5 most important traditional goods of import to Norway

(except ships and oil platforms).

Imports from Chile

Sitc Description 2004MILL NOK

2005MILL NOK

2006MILL NOK

Total 396,1 499,6 626,6

05 Vegetables and fruit 73,4 84,1 116,6

08 Feeding stuff for animals 129,4 169,5 219,5

11 Beverages 69,8 70,8 61,3

29 Crude animal and vegetable materials, n.e.s. 25,2 31,2 35,1

52 Inorganic chemicals 49,1 83,7 138,3

How to find a sale for Chilean goods in the Norwegian market

• Consentration on consumption goods?• Agricultural products?• Appointing an agent?• Direct deliveries?

The Norwegian market

Groceries – 4 chains covering 98,4%• Norgesgruppen• Coop• ICA Norge • Rema(Among the 1,6% is Lidl)

Grocery retail trade 2006Market value: NOK 110 billion excl. vat

Norges Gruppen38 %

COOP24 %

ICA19 %

Rema 100017 %

Others2 %

Dominant / main importers

Coffee:FrieleJoh. JohanssonCoopKjeldsberg

Fruit and vegetables:BamaNorgesfruktUNIL

WINE (Beverages) – Most important suppliers:

• Argentina 1,5 %• Australia 3,9 %• Chile 2,5 %• France 31,7 %• Italy 16,6 %• Portugal 3,0 %• Spain 10,0 %• South Africa 1,3%• Germany 10,5 %• USA 16,6 %

Wine

• One retailer (state monopoly)• Private hotels and restaurants• Private agents/importers/wholesalers

Wine

• Arcus• V & S Norway• Engelstad• Ekjord• Strøm• Stenberg & Blom

Clothing Imports 2006 12,7 mrd. NOK excl. vat

China42 %

EU31 %

Turkey8 %

India3 %

Bangla Desh3 %

Other Countries13 %

The Norwegian market

Textiles and clothing:• Varnergruppen (Dressmann, Cubus, etc)• Voice• Sparkjøp• Gresvig• ”The Swedish”

Clothing Retail Trade 2006Market: 26,5 mrd. NOK excl. vat

Hennes & Mauritz 13 %

Small and medium sized retailers

30 %

Varner-Gruppen 17 %

Sparkjøp 3 %

KappAhl4 %

Lindex 4 %

Voice5 %

Bestseller Gruppen6 %

Other large retailers7 %

Redcats 2 % Herrcon

3 %B- Young

2 %

Tekstilkjeden2 %

JC1 %Benring/

Benetton/Oasis mv1 %

Sports equipment chains 2006Market: 8 bill. NOK excl. vat

G- Sport26 %

Sport 116 %

Intersport15 %

MX- Sport 8 %

XXL8 %

Sport 25 7 %

Coop5 %

Sportshuset3 %

Other Sport Equipment Retail Trade

12 %

The Norwegian market

Furniture:• Møbelringen• Living• Bohus• Skeidar• IKEA

Furniture retail trade 2006Market: 13,4 bill. NOK excl. vat

Ikea31 %

Bohus16 %Skeidar

12 %

Møbelringen9 %

J ysk 8 %

Fagmøbler4 %

Living3 %

Other Furniture Retailers15 %

Other large Retailers2 %

How to find a channel for Chilean goods in the Norwegian market

• Do business with the leading groups in retail trade• You have to establish business relations with one of the leading companies in

your line of trade

• You can ask for a representative/ a trade agent

• Or if you are dealing with wearing apparel and footwear, you should attend a trade fair i. e. The fashion centres:• www.moteforum.no• www.fashionhouse.no• www.skomessen.no

• Or you can establish your own sales office, but this is not the simplest and cheapest way to penetrate the market

HSH are helping you

Department of International Trade Cooperation (DITC)

is established according to an agreement between

NORAD (Norwegian Agency for Development Cooperation)

and

HSH(Federation of Norwegian Commercial and Service

Enterprises)

www.hsh-org.no

International trade cooperation (DITC):• Market information• Market access• Company matching

Who is who in HSH?

• Ellen D. Gjeruldsen (DITC) e.d.gjeruldsen@hsh-org.no• Tina Ege (DITC) t.ege@hsh-org.no (or turn to HSH www.hsh-org.no).

WHY IS ETHICAL TRADE AN ISSUE?

• Ethical trade became a growing issue during the 1990s because companies with global supply chains were coming under increasing pressure to ensure decent working conditions for the people who produce the goods they were selling

• A number of NGO and trade union campaigns raised consumers’ awareness of poor working conditions in factories and farms in developing counties

• A growing number of companies decided that they could no longer turn a blind eye

ABOUT ETHICAL TRADE

As trade is their core activity, ethical trade is an important

CSR aspect for retailers/merchandisers/importers

Ethical trade relates to labour and environmental standards

in the entire value chain, where ethical labelling iseither not possible or advisable

Normative principles and standards based on ILO & UNstandards Ethical purchasing policy/Code of Conduct also

includesprinciples of implementation and follow-up

DRIVERS FOR ENGAGEMENT IN ETHICAL TRADE

Three mutually dependent criteria strongly impacting companies engagement in ethical

supply chain management:

High level of general public awareness on ethical supplychain issues

Provision of relevant and manageable tools

Easily accessible support & long-term capacity building

ABOUT ETHICAL TRADING INITIATIVE (ETI-NORWAY)

Founded November 2000 by:

Coop Norway, HSH, Norwegian Confederation of Trade Unions,Norwegian Church Aid

Overall objectiveCollaboration to ensure that trade does not contravene human-and labour rights, development and environment

Strategic objectives1. Strengthen the support for ethical trade issues 2. Supporting members in developing ethical trade practices

ETHICAL TRADING INITIATIVE (ETI)

• Vision: Stimulate trade that secures development, human rights and environment

• Business idea: Enable members to meet challenges related to ethical trade

SOME ETI-NORWAY MEMBER CHARACTERISTICS

69 members as of Aug 2007

Open to all organisations, public institutions and sectorse.g Fashion/Sports, Supermarket retailers and their

suppliers, Footwear, Flowers, Furniture, Publisher, Accessories

Mix of SME’s and strong brandse.g. Dressmann, Helly Hansen, IKEA, KappAhl, ICA,

NorwegianOlympic Committee and Federation of Sports11 members with 1-10 employees

Majority joined voluntarily, not because of media exposure

SERVICES, OBLIGATIONS & PRINCIPLES

ServicesTraining and capacity building both in Norway and in supply chainIdentification and quality assurance of local improvement

resources Shared learning and development of toolsCase-based advisory role

ObligationsCommitment to ETI-Norway Declaration of Principles Annual activity and progress report – publicly available

Improvement PrinciplesNot terminate trade in case of Code violationMonitoring and auditing is just a mean, not the goal

WHAT IS ETHICAL TRADING?

• ETI mainly focus is on human rights of supplier’s workers and their labour conditions

• An important aspect of ethical trading is that although the suppliers initially do not fully comply with Code of Conducts requirements, this should not lead the sourcing company to end a supplier relationship

• Focus is continous improvements