Gateway to World markets
With the help of GSP+, Lao Integrated Farms is all set to cater to more customers in Europe.
In 2009, Mr. Benjamin Lao started his company Lao Integrated Farms, with a mission to create employment opportunities for the people of his village, Barangay Eman.
The company was incorporated in 2010 and that is when Donna Lao-Padre joined her father’s business, taking up the important position of Vice-President Export Marketing, making it a family business with a social objective.
Introduction to the European market
Lao Integrated Farms Inc. (LIFI) took the opportunity to participate in various international trade fairs and connected with European buyers with the support of a European development partner which imparted knowledge about export market research and export planning to the European Union (EU).
“This gave us the confidence to deal directly with European buyers”, recalls Donna Lao-Padre. The company exports value-added coconut products including coconut vinegar and aminos.
Win-win situation through the GSP+
Although the first steps towards exports to Europe were undoubtedly firm, Donna had only just heard about the GSP+ scheme. Her company’s major challenges were a lack of awareness about the benefits of GSP+ scheme and the requirements that need to be fulfilled in order to avail them.
She found support from the Department of Trade and Industry (DTI) on export awareness, export pricing and costing and documentation and zero-tariff.
“I must acknowledge the assistance of our local DTI – Davao del Sur and DTI Davao region. They were very instrumental in helping us prepare for exporting to the EU market. Our company greatly benefitted from the plethora of programmes and seminars spearheaded by DTI,” she says.
“The Generalised Scheme of Preferences (GSP), is the European Union’s special incentive arrangement for Sustainable Development and Good Governance. It is a preferential trade agreement which supports vulnerable developing countries that ratified 27 international conventions on human rights, labour rights, environmental protection and climate change, and good governance. GSP+ countries can benefit from complete duty suspensions for products across approximately 66% of all EU tariff lines. The Philippines benefit from the GSP+ since 2014.”
Trainings received from DTI on were truly beneficial for the company.
“We had to meet a number of requirements in order to match the standards of the GSP+. In addition to being organic certified, we had to obtain a Higher Quality Management Certificate, Fairtrade Certification and to introduce laboratory tests for monitoring the humidity of containers used in the production of coconut aminos.” Donna mentions the efforts put in with the help of workshops and seminars on exporting to the EU utilising the GSP+ scheme.
Trainings received from DTI on export awareness, export pricing and costing and documentation and zero-tariff were truly beneficial for the company and the rewards are worth the efforts for LIFI.
GSP+ has created a stable source of additional revenue of approximately USD 27,000 per month for the company.
Donna counts the advantages of GSP+. “Along with exporters, buyers are also able to benefit from the zero tariff and discounts available for GSP+ scheme products. Using the GSP+ also builds credibility about the quality and standards of our products for buyers in countries beyond the EU.”
What lies ahead?
The company is all set to increase its exports to the EU using the GSP+, with its first export next year to France. Donna aims to begin targeting Hungarian and Czech markets as well. With the help of 20% more workers, the company is aiming for a 50%-60% increase in its current revenues by exporting to additional countries.
Donna is content that she will help her father realize his dreams for his fellow villagers. The majority of workers at LIFI come from the same village. Employment with the business has enabled them to build their own houses, buy land and get access to benefits from the government. With more exports imminent, Donna is sure she will be able to lift the workers and farmers to a higher quality of life.
Lessons learned for other exporters
Donna has useful advice to offer aspiring businesses based on her own experience. “Philippines’ products will be in greater demand if we avail of GSP+. Understand the requirements of the EU market and do not disregard the fact that DTI and its agencies such as EMB and CITEM are always ready to assist exporters from the preparation phase to marketing.”
The company also had to adapt to market demand. When a buyer from Germany informed LIFI that coconut syrup was no longer this preferred product since it was not included on the GSP+ list of eligible products, Donna decided to shift to accepted products including coconut vinegar and aminos.
ARISE Plus Philippines
As the Philippine economy continues to grow prominently in the ASEAN region, exporting to the EU has visible benefits for exporters from the country through the Generalised Scheme of Preferences Plus (GSP+). It is a trade preference that allows thousands of Philippines products to enter the European market duty-free and become available to consumers at a lower price than those from other countries.
A new project, the ARISE Plus Philippines project is enabling Philippine exporters to take advantage of European Union (EU) market access and the trade privileges granted under the Generalized System of Preference (GSP+). It supports the overall EU-Philippines trade relationship and trade-related policies.
ARISE Plus Philippines is a project of the Government of the Philippines, with the Department of Trade and Industry as lead partner together with the Department of Agriculture, Food and Drug Administration, Bureau of Customs, the Department of Science and Technology, as well as the private sector. It is funded by the EU with the International Trade Centre (ITC) as the technical agency for the project.