Zimbabwe Horticulture Sector Bulleti nn - ZimTrade

EXPORT CONSORTIA PART 1Source: METCO Publication 1998DEFINITION“A” consortium “can be formally defined asan “ad hoc or ongoing, informal or formal,sometimes “shell” association, of two ormore entities to profitably pursue, generally,one or more common commercial activitieswhich are either complementary to, anextension of, or in addition to, regularactivities of its members.A more down to earth description of anexport consortium in relation to SMES is thecoming together of a number of individualscompanies that are seeking to enterinternational markets.As individuals operations such companiesare often restricted by the cost of exportsmarketing and sales function and the cost oftransportation of small volumes to themarket place. In such instances, by cooperatingwith a number of like –mindedcompanies, each financially contributingtowards forming an export consortiumcompany, the individual cost of exportingbecomes more affordable.an organization can provide export servicesto companies, which may be equityshareholders in the consortia, but choose tobe associate members; however usually for afee .It therefore follows that those interestedin forming such an export consortium shouldsee themselves as investors on which areturn is expected.A consortium cannot be managed on acommittee basis and consensus baseddecision making often does not work inpractice. An export consortium must be seenas a separate entity from that of its foundermembers and as such should have a flexiblestructure allowing change according tomarket needs and demands.The structure of an export consortiumcompany should be very lean and not overstaffed. An example of a possible structurecould be: Board of Directory (probably aChairman and two Directory, elected fromthe investing members for a specified term),Chief Executive and /or Sales and MarketingExecutives /Manager and a FinancialExecutive Manager, who could initially atleast also have administrativeresponsibilitiesHOW TYPICAL EXPORTCONSORTIA OPERATEAn export consortium is a business, just likeany other business. It is simply and typicallyan export –marketing organization foundedby a number of companies sharing acommon business interest.A consortium is therefore a business concernowned by those companies/persons who putup the initial capital. However, associatedcompanies/persons not wishing to befounding members and /or shareholders canbe members of an export consortium. Such6Typical, export consortia personal usuallyconsist of 2 to 3 full time employees. Stafflevels may increase in due course if thevolume of business justifies it.The activities of export consortia usuallyfocus on:• Export market research• Overseas promotion in advertisingand publicity development• Product demonstrations• Potential buyer and distributoridentification• Trade show /fair participation