INTERNATIONAL – CARIBBEAN ISLANDS: Research is key to trading in the tropics

Jun 2 2009 Perry Gourley, Business Insider

Comprising more than 7000 islands, the diversity of the Caribbean means it's vital to target the right market among the multitude

The fact that the Caribbean Islands replaced China in the league table of Scotland's export markets will have raised eyebrows among readers of the latest statistics.

The surprisingly high ranking is something of a statistical blip as the islands are used as a hub by manufacturers, particularly in electronics, and are not the final destination of the products being sent.

But while the true value of exports may be significantly below the headline figure of £270m, the Caribbean Islands do offer significant potential.

Behind the holiday brochure stereotype, the islands are home to a number of sizeable economies and are well-placed in terms of the US and Central and South American markets.

Tony Johnson lived in Trinidad & Tobago for many years before relocating to the Scottish Borders last year to run KPI Management which specialises in the use and measurement of key performance indicators for business. He believes the Caribbean is a region wrongly overlooked by many UK and Scottish companies.

"I didn't come across many Scottish companies when I was out there but those that have established themselves seem to do well.

"My wife ran an import business for British goods and represented the likes of Baxters, who were very successful," points out Johnson.

The Caribbean is made up of more than 7000 islands, the most significant of which include Trinidad & Tobago, the Bahamas, Barbados, Cuba, the British Virgin Islands, the US Virgin Islands, the Cayman Islands, St Lucia, the Dominican Republic, Grenada, Haiti, Jamaica, Puerto Rico and the Turks and Caicos Islands.

They have a total population of some 37 million and English is spoken widely.

The economies of the islands vary greatly and although tourism is key for many, natural resources are also important with Trinidad & Tobago and Cuba in particular boasting substantial oil and mineral reserves.

In recent years the Caribbean nations have worked increasingly closely together to promote international trade; in 2006 a single market was set up which all but Haiti and the Bahamas have signed up to.

The region also has strong historical and current links with the UK and islands including Anguilla, British Virgin Islands, Cayman Islands and Montserrat are British Overseas Territories.

A recent study found more than 12 per cent of all surnames in Kingston, Jamaica's capital, are Scottish - a link to the days of slave trading when thousands of Scots emigrated there.

The Caribbean nations are keen to forge closer ties. Last year a delegation of Caribbean high commissioners to the UK paid a formal first visit to the Scottish Parliament to look at improving relations, possibly establishing a cross party group on the Caribbean and developing an annual exchange programme.

They highlighted economic similarities including a significant tourism and financial services sector as well as offshore and life sciences industries.

There are already strong links between the drinks industry in Scotland and the Caribbean. Trinidad conglomerate CL Financial owns Burn Stewart Distillers and last year the Edrington Group acquired a majority shareholding in Dominican Republic-based Brugal, one of the largest global golden rum brands.

Irn-Bru has also recently started appearing in Cayman Island stores following a deal with Caribbean distribution group Jacques Scott.

Jamie Duncan, who is originally from Kirkcaldy and has lived in the Cayman Islands for 22 years, manages Jacques Scott's food division and believes there are opportunities for other food and drink companies.

"We are always looking for new brands to represent and there is definitely potential for Scottish firms to get their products into shops, hotels and restaurants here," says Duncan.

Johnson stresses that the nature of the region means it is vital for companies to research potential markets in the Caribbean carefully.

"It is a very diverse world but there are a number of 'powerhouse' islands which hold appeal for UK firms including Trinidad, the manufacturing and energy hub, and the Bahamas and Barbados, the main financial centres," says Johnson.

As well as opportunities in consumer markets Johnson believes Scottish expertise in the energy sector would be in demand.

"Oil and gas is a major industry but increasing investment is also going into renewables so there is potential there."

While many parts of the Caribbean have low standards of living by international measures, others are relatively wealthy.

"Trinidad has saved some of the revenues from oil and gas over the years and is keen to invest to ensure the economy is well prepared for when production reaches its end.

"They are a very entrepreneurial people and are keen to do business internationally as they look to diversify their economy," adds Johnson.

Although the Caribbean has something of a paradise image, crime is an issue of which companies should be aware.

A recent report by the World Bank and the United Nations Office on Drugs and Crime blamed high murder and assault rates for hindering economic growth in the region.

Johnson cites rising crime levels in Trinidad as one of the reasons he returned to the UK.

"It is worse than it used to be but that shouldn't stop businesses looking to trade there. It is no different to many parts of the world but crime is something to be conscious of; precautions should be taken if you are visiting certain areas."

While there is a very different culture in the Caribbean, Duncan stresses that the business environment is a serious one.

"It is more laid back but people work hard and are professional - we are not lying on the beach drinking piña coladas all day!"

FACTFILE: CARIBBEAN ISLANDS

The largest markets for UK products in the Caribbean include Trinidad & Tobago, the Dominican Republic and Jamaica, together worth more than £200m a year.

Key export sectors include food and drink, machinery and transport equipment, and chemicals.

The Caribbean's biggest international business-to-business event, The Trade & Investment Convention, is being staged on June 24-27 in Macoya, Trinidad.

Hundreds of buyers and distributors from across the region will attend the event.There is definitely potential for Scottish firms to get their products into shops, hotels and restaurants here