Export sector targets 10% growth in 2011

CEBU, Philippines - If given the full support of the government, the Cebu export sector hopes to hit 10 percent to 11 percent growth in 2011, although stakeholders are seeing another tough year for the export sector.

PhilExport-Cebu executive director Fred Escalona said the 2011 is seen to offer a fierce battle given that issues faced by the industry today have not been resolved yet, such as the wage increase, foreign exchange fluctuations, and higher cost of doing business.

“Although there has been an improvement in growth this year, the potential growth has not been maximized because of many external factors that continue to hit exporters,” Escalona said.

But, having been immune to problems and difficulties, Escalona said that exporters in Cebu are determined to fight a tougher battle, and will carry on its call to ask the government for support, although they have realized that they are “no longer the darling” of the government today.

If the health and wellness market will be able to hit its projected US$10 million revenue in the next three years, the Cebu export sector also expects to register at least 15 percent in the next three years.

Escalona hopes that by the second and third quarter of 2011, the export industry will be able to see the full recovery of the export sector, while the outside markets have showed improvement in the past few months.

If the full recovery will happen towards in the second half of 2011, the export sector will not only expect a 15 percent growth, but more than the projected figure.

In 2008 and 2009 figures, Cebu export sector registered a negative growth from US$50 billion (Free-On-Board) export value in 2008, to US$38 billion (Free-On-Board) export value recorded in 2009.

According to Escalona, exporters’ decision to fight, and adopt new strategies in marketing, and operational set-up helped some exporters thrive in very difficult situations.

The different sub-sectors in the export industry in Cebu are confident that they can weather the difficult market situation, as they are “cautiously upbeat about the export prospects from 2011 to 2013.

A report from the PhilExport-Cebu indicated that based on the 2010 figures, exporters in Cebu are seeing a turn-around starting 2011, although they kept a conservative outlook because of the obvious uncertainty of the global market.

Food exports committed to grow by at least five percent in 2011, and a percentage higher by the next year, and eight percent in 2013.

Garments on the other hand, expect to grow by an average of 10 to 15 percent in the next three years.

While health and wellness sector projected to generate at least US$ 10 million revenue by 2013.

The battered furniture sector, although still grasping for the effect of real market recovery projects to grow by eight percent next year, and 10 percent in the following two years.

The home décor exports, made its conservative prospects with seven and eight and nine percent growth from 2011 to 2013.

Seaweed exports see a 10 percent to 15 percent growth from 2011 to 2013. The Central Visayas exports pushes for a bit higher than the projection made by the national industry sectors.

Despite the improving performance of orders from the overseas market exporter Pete Delantar, the owner of green furniture company Nature’s Legacy said that exporters now are too careful in their manufacturing operations, including hiring and maintaining people, as orders are too unpredictable, and planning ahead or projecting is too risky for exporters now a days.

Aside from economic threats, and the changing preference and attitudes of buyers, Delantar said exporters also has to wary on the calamity happenings, as this could also dump consumers recovering interest to buy new furniture, and other home furnishing products.

“The world has changed now. We can not plan well for the future. Anything can happen. Thus, we have to adjust in producing products as per order,” Delantar said adding that some clients order minimal numbers of furniture items, unlike in the previous years.

Gifts, Toys and Houseware Exporters in Cebu (GTH-Cebu) past president Jenifer Cruz, also noted the same observation saying that after the global recession, the market trend and buying pattern of the overseas market has significantly changed.

“We don’t expect that the recovering market will bring us a very slow movement of volume orders. Unlike in the past 1997 crisis, that after the regional economy recovered, the global market was also very slow to respond,” Cruz said.

Although, the seaweed exports projected at least a 10 percent to 15 percent growth in the next three years, Seaweed Industry Association of the Philippines (SIAP) president Benson U. Dakay said its growth will depend largely on the players’ consistent competitive advantage and the plight of foreign exchange in the country.

Worst, Dakay said that if external and internal intervention will continue, such as the loose foreign exchange movement, among others the industry may experience even a zero growth in the next three years.

Because of the fragile situation in the export sector, Export Development Council (EDC) private sector representative, and former PhilExport president Alan Suarez said that the government should call for a dialogue with the exporters, especially in Cebu, where most exporters are using indigenous materials and are hit by several problems.

“They [new administration] need more understanding how export is doing in this part of the country [Cebu, and Southern Philippines]. There should be a proper dialogue to find out what are the current concerns of the exporters nationwide, not only looking at the performance of companies inside the economic zones,” Suarez said. (FREEMAN)