Features

NES: The Importance of the TSN

By Peter Lorde, NES Navigator

THE importance of the Trade Support Network (TSN) to a small business hoping to venture into the export market cannot be overstated. In fact, the TSN is so important to the growth of exports that one of the main objectives of the National Export Strategy (NES) is “strengthening the competitiveness of the business environment to boost the creation of firms and SME growth”.

This strategic objective is directly aimed at the trade support institutions and their capacity to provide relevant and high-quality services to the firms at competitive prices. It focuses on the external factors that affect the firms.

The objective has the double goal of creating new firms and supporting the growth of the existing ones. Fostering entrepreneurship to ensure that those with an entrepreneurial spirit and good ideas find the necessary conditions to succeed in the country is a key element. In addition, the objective aims to align the education system to the skills that SMEs require to succeed.

There are three sub-objectives at the operational level:
• Reducing the regulatory burden on enterprises and investors. The St. Lucian trade support network needs to achieve more than other countries with comparatively fewer resources. Removing barriers and unnecessary burdens or regulations on enterprises and investors is a priority while ensuring that good governance prevails. The way forward involves improving the customer orientation of business services providers, and sensitizing policy-makers on trade issues.
• Providing value-adding services to enterprises and investors. This operational objective is about improving the quality of trade support services that are available to enterprises. Trade support institutions should be better coordinated and offer a wide range of services to the enterprises, SMEs in particular, that can really make a difference for the managers. This means addressing the practical considerations of identifying foreign demand, and adapting the products and services to be able to meet this demand. There are gaps in the institutional structure and services delivery in areas such as trade finance, certification, transport, cargo handling, trade promotion and branding. The country needs a coordinated network of institutions that provide effective, value-adding and affordable services along the value chain, and the phases of the international trade transaction. The way forward involves ensuring effective decision-making through competent data collection and dissemination for policy-makers, investors and businesses.
• Creating an enabling environment for entrepreneurship. This operational objective focuses on creating the right conditions for entrepreneurs. The way forward involves an incubator programme that generates enterprises in new value-adding sectors, and stimulating entrepreneurship and innovation among the youth. The current business environment does not sufficiently stimulate innovation and the diversification of the economy.

A long-term view of this strategic objective would involve upgrading the trade support infrastructure (i.e. road network and ports). In the medium-term, the hard infrastructure should be taken as given and the policy focus placed on regulations, standards, certification and training, client orientation and reduction of bureaucracy, fast-tracking transactions and cutting red-tape. Addressing these measures has a significant bearing on the quality of the business environment, in particular, for exporting SMEs.

Still not convinced? Let us take a practical example.

Let us suppose you are a budding entrepreneur with a passion for making excellent tasting sea moss drinks. Everyone, including your detractors, home and abroad, admit that your sea moss drinks are the best tasting agro-processed products “in da world” and now you are entertaining ideas of going on the market locally, regionally and internationally. Your idea is intoxicating (no pun intended) and it wakes you up on mornings. It’s all you think and talk about. You are passionate about it.

You will need more than passion. You will need the TSN in Saint Lucia. Why? Well, for starters, you will need to understand where you fit in the supply chain. Where you fit will determine which regulations, standards and trade support that affect your performance.

As a new small business, you will need a business plan which really is a series of four integrated plans — marketing, human resource, operations, and financial. Your best bet is to visit one of the TSN partners responsible for micro and/or small businesses, particularly one which addresses the needs of startups (Belfund, SEDU/SBDC or a local consultant or try out one of the numerous templates on the Web).

Your attention at the start-up stage should be focused on market research. If done properly, the research will reveal your sources of raw material (contact Fisheries Dept.). It will also reveal that your processes should be certified as hygienic and that your packaging and labeling are up to standard (contact Saint Lucia Bureau of Standards) and that the layout of your facilities complies with Public Health Act (contact Environmental Health). In addition, the construction should be in accordance with regulations (DCA). The research will also identify the appropriate technology and duty-free concessions (TEPA, SLBS, SEDU, Dept. of Commerce, Customs Dept.).

The research should also identify your human resource requirements in terms of skills, pay rates, employment laws (Labor Dept.), NIC obligations (NIC), and training needs (NSDC, SALCC, SEDU, Dept. of Commerce, SLBS). The research should also identify your competitors, customers, and distribution channels (SEDU, Dept. of Commerce, TEPA). This information, in turn, should serve as critical input for the design of your marketing plan (SEDU, TEPA). Your marketing, human resource, and operations plans must be financed (Belfund, SEDU, TEPA, SLDB, and other micro-financing institutions (MFIs). Beginning to get the picture?

As an agro-processor, your main raw material, in this case, is sea moss (one of the species cultivated in Saint Lucia is scientifically called Eucheuma “cottonii”). The primary suppliers are the sea moss farmers on the east coast. In order to ensure that your raw material is of good quality and that there is a reliable supply, you will need to know the following:
1. Is your supplier producing according to the NVQ certification for Sea Moss Production (National Trust)
2. Was the seawater tested to see if it meets the recreational water standard (CARPHA)
3. Is the LBS protocol in place? (CARPHA). The Protocol Concerning Pollution from Land-Based Sources and Activities (LBS Protocol) is a regional mechanism assisting the United Nations Member States in the wider Caribbean region to meet the goals and obligations of two international agreements: The United Nations Convention on the Law of the Sea (UNCLOS) and the Global Plan of Action for the Protection of the Marine Environment from Land-Based Activities (GPA). UNCLOS calls upon States to adopt laws and regulations to prevent, reduce and control pollution of the marine environment from land-based sources. The GPA highlights the need for action to reduce the pollutant load to the seas from land-based sources and activities. Both of these instruments emphasise the need to act at the regional level to address this problem. The LBS Protocol was adopted on October 6, 1999 in Oranjestad, Aruba and entered into force on August 13, 2010.
4. Is the sea moss stored properly? (a site visit with a fisheries and or National Trust Officer will be necessary)
5. Is the supplier engaged in a sustainable business (SEDU)?

You will need to be very familiar with the following:
1. PUBLIC HEALTH ACT (Environmental Health Dept.)
2. CODE OF PRACTICE FOR FOOD HYGIENE (Saint Lucia Bureau of Standards)
3. LABLEING STD (Saint Lucia Bureau of Standards)
4. PKG STD (Saint Lucia Bureau of Standards)
5. TRANSPORT STD (Saint Lucia Bureau of
Standards)
6. Good Manufacturing Practices (Saint Lucia
Bureau of Standards)
7. HACCP (Saint Lucia Bureau of Standards)
8. SOLID WASTE MANAGEMENT ACT
(Saint Lucia Solid Waste Management Authority)
9. METROLOGY ACT (Saint Lucia Bureau of
Standards)
10. MICRO B TEST (a certified laboratory)
11. FOOD TEST FOR NUTRIENT ANALYSIS
(National Diagnostic Laboratory)
12. Section 173 of the Labour Act No. 37 of 2006) (OHS) (LABOR dept.)

Small business is inherently risky. Therefore, you will need to become familiar with risk management and the entities which specialize in risk management. For example, you may want to invite the Saint Lucia Fire Service to inspect your facilities after it is set up to identify potential fire hazards and measures to address them. Your electrical appliances should be checked by the Bureau of Standards to ascertain their fitness for use in a commercial setting.

You may invite a reputable security company to conduct a security audit of your premises (nothing like theft to extinguish a passion!). In addition, you should visit various insurance companies to shop around for appropriate insurance in terms of coverage and price. Your insurance should cover your health.

The reliability of utilities is critical to your success. Therefore, a good relationship with LUCELEC, WASCO, and your telecoms supplier is essential.

Now you are almost ready to open up for business. Your business must register its name with the Registry of Companies and Intellectual Property. It must register as an employer and the employees with NIC. It must register with Inland Revenue Department (especially if you want to access duty free concessions).

To get onto the market, it is absolutely important to know what the market entry requirements of your targeted markets are (contact TEPA, SLBS, SEDU, Dept. of Commerce and/or visit trade related websites specializing in the dissemination of market entry information).

All the aforementioned entities of the Trade Support Network are themselves subject to a slew of Standards, Regulations and Acts. Together, they form part of the vital ecosystem for business development and, by extension, export development. Notice that the Saint Lucia Bureau of Standards (SLBS) features quite prominently. Yet, the SLBS is seriously underrated and, therefore, under-used by our entrepreneurs. The challenge is to get entrepreneurs to assertively access the entities of the Trade Support Network and that will in turn fuel the growth and efficiencies of the TSN and, therefore, catalyze export growth.

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