Target niche markets - Look beyond textiles

LOCAL MANUFACTURERS should look beyond the textile market to the more than 8000 other products that qualify for Agoa benefits,” says Cargocare MD Roland Raath. “The rand cannot remain at its present level against the US dollar, and when it weakens exports in all sectors will increase once again. But as they do South African dealers must remember that this country enjoys only a small percentage of the imports the giant US market requires. “My message to them is not to underestimate the size of the US market. It is too vast for most South Africans to tackle as a whole,” says Raath. “They should instead hone their efforts into a niche market and direct their strategies into selected areas and concentrate on them. “US dealers are ruthless. Unless their order can be delivered on time as they want it, they hastily cancel. It is better, therefore, to be able to offer up front what can be provided instantly. Delays in supply are not acceptable.” Sales executive Lesley Haw, who concentrates on Agoa dealings at Cargocare, has encountered problems in this area. “One of our customers, like so many others, saw dollar signs flashing when he was contracted by a US dealer to supply certain liquids. He signed the contract then saw it called for 160million litres annually, while he could supply only 25million. He lost out on that one. “We encourage our clients to accept contracts for small loads rather than attempt to meet big demands which they cannot fulfil. Dealing with two US states - Florida and Illinois for example - is sufficient for most of them. Taking on all 52 states is impossible. “We can guide them on Agoa and the constant changes in regulations. That’s part of our value-added service. We can show them if they qualify for Agoa benefits. But they must read the small print to understand the situation fully.” Oil is currently the major beneficiary under the agreement, says Raath, but there are vast openings in the fields of automotive components, electronic equipment and even jewellery and cosmetics.