Contributing to sustainable development by enabling SMEs in developing countries to export is the raison d’être of ITC. As a relatively small international organization, ITC cannot satisfy demand for direct TRTA on its own. ITC typically uses TSIs in partner countries to build long-term sustainability. During 2010–2011, ITC demonstrated an annual capacity directly to train 1,250 enterprises in basic business and export management, and coach 750 enterprises to generate exports. Thus, the organization’s approach to supporting enterprises is divided between tailor-made initiatives focused on export-led enterprise development, integrated sector development, and indirect support in developing countries to broaden ITC’s reach.
Tailor-made assistance to SMEs: targeting high-value exports and south- south cooperation
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Directly supporting SMEs to achieve export success is a key component of a number of ITC projects.This is done in conjunction with TSIs and local consultants in partner countries to ensure outcomes continue to be realized after the project ends.
In 2011, the EnACT programme in the Middle East and North Africa assisted several exporters in target industries to export to international markets. In addition to strengthening TSIs and building awareness through trade intelligence, the programme has a focused approach to export-led enterprise development by identifying products with high export potential and high value. It works predominantly through local consultants and specific international experts to reach the standards demanded by non-traditional markets and build relationships with potential buyers
For example, Moroccan enterprises have improved the design and quality of their leather goods and upgraded their marketing skills through the EnACT programme. As a result, in 2011, Moroccan companies succeeded in obtaining new export orders for leather goods from Japan and Europe, generating employment for women and young people in the sector. As a result of the EnACT programme, major luxury European brands have engaged Moroccan companies as potential longterm suppliers, placing Morocco on the map in theworld of luxury leather goods. Similarly, Tunisian and Jordanian SMEs in the handicrafts sector received initial export orders in 2011 as a result of bespoke quality-improvement initiatives, coaching in marketing and participation in a targeted international trade fair.
Work in Algeria is at a less advanced stage; Algerian women entrepreneurs were exposed to export opportunities and challenges specific to Algeria through tailor-made workshops. In Egypt, EnACT focuses on the export of engineering products and services to the African market. EnACT also assisted Egyptian companies to source automotive components from Morocco and Dead Sea cosmetic products from Jordan. It is hoped that these initial sales can result in longer term intraregional trade relationships.
Under the Promotion des exportations Tunisiennes project financed by SECO, selected enterprises in processed food and services to enterprises subsectors were coached and assisted to enter the North American and the West African markets, respectively.
Similarly, ITC worked with sector organizations in Benin to use an innovative combination of access to finance, mobile technology solutions and linkages to other African markets to enhance exports of pineapples to Morocco and neighbouring West African markets. This project, funded through Window I of the ITF, helps poor producers use technology for income generation. Initial orders through business generation meetings reached more than US$ 1 million, and long-term export engagements are close to being agreed between exporters from Benin and buyers from Togo, Burkina Faso and Morocco.
Linking companies to regional and international value chains plays a central role in the tailor-made approach to supporting enterprises. In Latin America, for example, the LatinPharma project linked SME entrepreneurs producing natural products to the pharmaceutical industry in the region. More than 700 bilateral meetings were held, resulting in direct business deals of US$ 3 million. Previous experience in LatinPharma demonstrates that more business is generally conducted after the initial contact through the bilateral meetings. In 2011, ITC also established the Global Platform for Action, linking women-owned business enterprises with multinational supply chains.
Expanding South-South trade between the Mekong region in Southeast Asia and Central and West Africa is also a core initiative led by ITC and the Organisation Internationale de la Francophonie (OIF). This joint project commenced in late 2011. SMEs established business partnerships between the regions with potential business transactions of US$ 235 million in wood and wood products, building materials, cashew nuts and mine products. In addition, 36 TSI staff and service providers to the business community, of whom six are women, acquired the skills to train and implement ISO 22000 in Benin and Togo. Ten food and agri-food exporting SMEs have been audited in Benin and Togo by the 36 trainees in preparation for ISO 22000.
In Tajikistan and Kyrgyzstan in Central Asia, ITC works with TSIs and SMEs in the textile and clothing sector to increase sales to Russian and EU markets.
A sector approach to supporting enterprises
ITC also works to help enterprises achieve export success through an integrated sector approach, identifying challenges in the sector value chain and working with partner organizations and enterprises to address them.
Supporting enterprises through export-driven sector development for high-potential commodities in vulnerable countries has been a key focus. The AAACP, which ITC implemented with key international partners including the World Bank and the United Nations Food and Agriculture Organization (FAO) and regional and local institutions, focused on developing and implementing value-chain strategies for commodities with high export potential and those that could significantly impact on food security in the respective regions. A regional value-chain strategy was developed and implemented for the cotton sector in Africa and a range of agri-food commodities were the focus for other regions. The goal is to benefit from more integrated value chains that efficiently produce competitive products.
AAACP has enabled the first fully washed sample shipments of coffee from Cameroon and the Democratic Republic of Congo to achieve a 25% premium in the EU market on the back of significant increases in the quality of the output. Gum arabic producers in Mali and Burkina Faso have received a boost in income through improved product quality and higher sales volumes. The acacia trees that produce the gum are now more valued and protected by rural communities and the trees in turn have contributed to the prevention and reversal of desertification. AAACP enabled new sales of Liberian cassava to schools, buyers of infant food and refugee camps in neighbouring countries and sales of value-added spices from Ethiopia directly to buyers in India, significantly increasing income in those communities.
The approach deployed in Africa’s cotton sector was regional, involving regional economic commissions and cotton-related associations to address weaknesses in the supply chain and linking African producers to markets in Asia. ITC’s capacity-building work with enterprises resulted in an improved image of cotton and stronger trade relationships. TSIs and enterprises also invested in infrastructure to improvethe quality of the cotton produced. Cotton ginners from Malawi, Mali and the United Republic ofTanzania achieved direct sales of US$ 4.4 million to major Asian markets as a result of this programme, with several new contracts currently under negotiation. Mali’s exports to target markets increased by an average of 125%, and the Malian cotton TSI saved close to US$ 500,000 in transportation costs to West African ports as a result of new efficiencies.
In Samoa, where fruit and vegetables is the priority sector, six enterprises have obtained ISO certification, enabling increased sales to major markets in the Pacific region such as Japan, New Zealand and the United States. ITC’s market matchmaking has facilitated sales of new Samoan product lines and increased exports from, among others, a women-led community enterprise. Improvements in the coconut supply chain in the Solomon Islands, as well as the improved product itself, have attracted investment in value-addition facilities for coconut oil and coconut drinks, which will greatly increase income for the local industry.
The results achieved in Grenada resulting from ITC’s interventions in the nutmeg sector are considerable and have placed the sector, which is run and owned by the farmers themselves, as a clear priority for the government in the future. Exports of the spice have trebled since the beginning of ITC’s programme in the country, from 200 to 600 tonnes.
NTF II offers another example of the sector approach. The programme began in 2009 and focuses on enhancing the competitiveness of sectors with high export potential in five countries: IT and IT-enabled services in Bangladesh, tree fruits in Kenya, mango in Senegal, Rooibos and automotive components in South Africa and coffee in Uganda. The first stages of this four-year programme focus on strengthening the institutions within the sectors. In 2011, capacity-building activities in key areas identified as priorities by partner organizations tookplace in all target countries. By the end of 2011, stakeholders in Uganda completed the update of the coffee sector strategy with the support of ITC. Coffee farmers were enabled to improve the quality of coffee exports in a relatively short period as a result of training delivered to coffee farmer associations on coffee drying, sorting and storage. In Kenya, the “Fruit Team” established within the Fresh Produce Exporters Association of Kenya works with three commodity working groups, including strong private-sector representation, to devise a strategic long-term vision to boost exports of Kenyan avocados, mangoes and passion fruit. The private sector plays a major role in identifying the supply-side constraints and actions needed to overcome weaknesses and improve export competitiveness of the sector.
In South Africa, the inception phase involving indepth market research resulted in the joint adoption of a strategy to increase competitiveness of the Rooibos sector, and implementation of this strategy has commenced. A gap-analysis tool was developed for the automotive components sector and an action plan to improve the export readiness of second-tier manufacturers was endorsed by stakeholders. The project plan for NTF II Senegal was signed by all partners during the Eighth WTO Ministerial Conference in December 2011. As part of this project, SMEs in the mango sector are using the market opportunity study completed in partnership with ITC to penetrate to new market segments and improve their position in export markets. In Bangladesh, some beneficiary companies in the IT and IT-enabled services sector have been awarded pilot contracts by European businesses as a result of NTF II business linkage efforts. It is expected that this initial success will result in a steadier stream of outsourcing business provided to Bangladeshi SMEs, which will result in increased exports and more jobs for young people.
ITC is also increasingly supporting enterprises in service sectors and creative industries. In the Caribbean, ITC successfully worked with partners to develop and organize the burgeoning creative industries in the region, with funding from the EU, in order to support enterprises for export. Through trainings, mentoring and trade-fair participation, producers from Haiti, Jamaica, Barbados,Dominican Republic, and Trinidad and Tobago, are now better prepared to profit from the prominent tourist industry in their countries. A new craft collection labelled “Contemporary Caribbean Design” was launched and exhibited at the Design Caribbean trade fair in the Dominican Republic, after entrepreneurs were aided in improving their product design and quality. The trade fair was also supported by this initiative, and the companies sold more than 90% of their products. Some producers have established contacts with major companies in the industry.
The SADC Supply Chain and Logistics Programme, funded by the Flemish Government, focuses on the development of agricultural value chains in selected Southern African countries and connects these to suitable markets. As a result of this programme, 15 pome and stone fruit farms in the Western Cape region of South Africa, which collectively employ 200 permanent staff and 1,000 casual seasonal workers, strengthened their linkages with supermarkets and export agents, and improved food safety measures and the quality of their products. In Malawi, smallholder farmers have improved the productivity of their farms and the quality of their produce. As a result, farming families have increased their income through repeat business with formal markets within Malawi. Producers in Mozambique have secured initial sales of marula oil to a South African buyer after capacity building and investment in infrastructure to crush marula seeds into highervalue export-quality oil.
Multiplying ITC support to enterprises
ITC’s tailor-made and sector development approaches to supporting enterprises reach a limited number of companies worldwide. To broaden the organization’s reach, ITC develops systemsbased programmes that promote a multiplier approach to supporting enterprises for export development. By accrediting TSIs to run systems in their respective countries, ITC empowers institutions with a competitive advantage to replicate ITC’s methodology and, therefore, ITC services are delivered indirectly.
MLS–SCM is the prime example of ITC’s “one-toone-to-many” approach. The programme, funded by Switzerland, builds a network of partner institutions that deliver certified training programmes in supply chain management to SMEs in developing countries.This programme structure has been accredited by ISO. By the end of 2011, institutions in more than 50 countries were enabled to offer MLS–SCM, with eight new institutions joining during the year. These institutions have access to trained trainers, have defined their target groups and course offerings, are able to develop effective course designs and programme marketing strategies. In 2011, 5,400 MLS–SCM exams were taken. In total, the MLS–SCM programme delivers around 260,000 hours of training per year to 21,000 participants. The average MLS–SCM partner institution delivers 26.5 training workshops, or 378 hours per institution. ITC on its own would not be able to deliver this kind of volume.
A similar philosophy is employed through ITC’s Counsellors and Trade Advisors Programme (CTAP), whereby ITC builds the capacity of business advisers as trainers to coach and guide entrepreneurs for export success. In 2011, CTAP was incorporated as a component of a number of large programmes. With the support of the EU, ITC activated a network of private-sector SME advisers trained to deliver ITC methodology and training in the fields of quality management, packaging and supply-chain management. By the end of 2011, the packaging institutes of Ghana and Kenya had deployed training programmes for SME managers using the experts trained by ITC and ITC’s training material.