Local export firms tipped to expand

Local firms, which have outward-focused business strategies, especially those that trade with China and other BRICS nations, are better positioned to expand, a new survey has indicated.

Local firms, which have outward-focused business strategies, especially those that trade with China and other BRICS nations, are better positioned to expand, a new survey has indicated.

BRICS stands for Brazil, Russia, India, China and South Africa, an association of emerging national economies.

The study, conducted by Regus, indicates that export-oriented firms earned better revenues and profits compared to businesses that focused on domestic markets.

The survey also showed that the increase in trade between South Africa (Africa’s largest economy) and Rwanda had boosted exports revenues.

About 22,000 business leaders from over 90 countries were interviewed during last year’s study.

Last year, the formal exports value amounted to $482.7m (about Rwf301.5b) from about Rwf244.3b in 2011, which was a 24.8 per cent growth year-on-year.

The Regus survey indicated that 50 per cent of the global export firms’ earnings had increased over the last 12 months compared with 38 per cent of companies that trade domestically. About 59 per cent others said their revenues had grown compared with 37 per cent growth of the locally-focused firms.

China was the top market, taking 48 per cent of the export business, while Europe is at 41 per cent, North America, 36 per cent, India, 31 per cent and South America, 31 per cent.

The survey noted that the most profitable areas for export destinations were the emerging markets and Europe.

Peter Vieira, the Regus area director for East Africa, said the report not only spotlighted the advantages of export orientation for Rwandan companies, but also highlighted concerns of exporters.

“These include worries about property and paperwork, an issue raised by 44 per cent of respondents and the challenge of building an image abroad, a concern for 42 per cent of respondents, while 63 per cent were worried about risk management,” he said.

 

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