GROUP # 1
Assignment : 2
Global marketing
Presented by:
Ahsan Rouf
Beenish Khawaja
Mohsin Jamil
The document provides an in depth information on external barriers involved in the export of
meat to Kuwait, the channel of access of product in the local market, cost structure and type
of meat chosen for export purposes.
External barriers
Following are the barriers that the foreign market requires to cross in
order to enter safely and operate as a legal player locally acceptable:
Product:
Halal meat (beef)
Market:
Kuwait
Local representation:
Foreign traders and companies must have a representative in Kuwait
who would oversee all the local trade related activities on part of the exporter
such as finding a buyer, negotiating etc. against which he is entitled to a
remuneration in form of commission which can be a percentage on the amount
of consignment or agreement of trade.
Agency agreement:
The agency agreement is the legal binding on the exporter regarding the
local representation as a government agent.
Standard and technical regulation:
The exporter must present Halal certificate on the dispatched food issued
by the country of origin from which the exporter belongs.
Customs and duties:
Tariffs are based upon the Harmonized international system (HIS) code
for classification of imports and exports. A duty is levied of about 5% on the
sum of cost of the product exported/ imported, insurance and freight paid.
Such duty is known as CIF form of duty.
Requirements for exports to Kuwait
A. Storage temperature with the refrigeration statement on the boxes
(Example: "Keep Frozen - Store At Or Below __ degrees Centigrade; Keep
Chilled (Or Refrigerated) - Store Between __degrees Centigrade and
degrees Centigrade")
B. labeling features
1. Country of origin.
2. Statement that product has been slaughtered according to Islamic
principles.
3. Bilingual - English and Arabic
4. The English section of the label should state the name of the
product and the name and address of the manufacturer or the
producer.
5. Metric net weight is required in Arabic (NOTE: Gross weight is
required for commercial invoices but is not required for product
labels.)
6. Production (slaughtered or freezing) and expiration dates must be
on individually packaged product.
7. Date format : Day/Month/Year( for products with a shelf life of
six (6) months or less) and only Month/Year if life is more than 6
months
Note: Month Dating should be in numeric format and bilingual
(English/Arabic).
C. The following methods of labeling are alternatives to meeting the
requirements for labeling precut and packaged fresh/frozen meat and
poultry:
1. Stickers may be used but must not obliterate label terminology
and must be self-destructive on removal. Stick-on labels covering
required label features are not permitted.
2. Inserts may be used but must be accompanied by production and
expiration dates. Inserts must be made of approved materials.
Documentation Requirements
A. Certification Requirements
1. Obtain FSIS Form 9060-5 - Meat and Poultry Certificate of
Wholesomeness. All FSIS Form 9060-5 certificates must be dated
and have the signature and title of an FSIS veterinarian.
2. Islamic Slaughter: the exporter must obtain a Certificate of
Islamic Slaughter from a member of an Islamic Center or
Islamic organization.
The certificate states that animals were slaughtered according to
Muslim religious requirements. This certificate must accompany
products labeled "Halal."
Note:
The certificate must be endorsed by the Kuwait Embassy or Consulate.
Type of product:
The basic product selected for foreign trade is meat. Such a product
holds a large array of sub types which are as follows:
Beef/ heifer meat
Mutton/ goat meat
Chicken
Sea food etc
The type of meat which is chosen for the export purposes is ‘cow meat’ or
‘beef’. The reason is the availability in abundance of the type and at economical
rates as well. Other reasons involved in opting this is the demand in the target
market where it is to be exported. The proximity in the local market is also a
major factor playing its part in such a decision.
The form in which the meat would be purchased from the supplier is that of
pieces of different weights which are as follows:
1 kg
5 kg
10 kg
Access of product:
The product selected for the export purpose is meat classified as cow
meat or beef. The supply chain involves a supplier which will be meat
processor. The meat would be procured at a discounted wholesale price from
the local market supplier.
For this purpose options are available in the local market in form of meat
processor who is operating only in the local market and there are others who
are experienced at meat exports. Following are the viable options for suppliers,
Neeli ravi cattle farms sahiwal
Chirag mutton and beef company
Abedin international
Zenith associates
Channel plan:
The channel plan includes the initiation and execution of the purchase
and all the activities which will render the meat ready for the export. Normally
a viable channel through which meat is procured is from open markets. A rate
is set at the open market for the live stock; one can purchase directly from
there and outsource the cutting to another supplier, which in this case will be
Sahiwal or Okara since both are Punjab’s biggest markets for live stock and
processing of meat.
Following are the activities which will rest with the supplier and the remaining
activities would be done in house. In other words following activities would be
outsourced to the suppler:
Slaughter
washing
Cutting
Packaging/ sealed rapping
The decision upon the selection of the provider is based upon the rates of
the meat offered as keeping under consideration the quality. But the assistance
of the processor as to the export context would also matter and play a
substantial role for making up such decision. Up till the current circumstances
raw meat suppliers as per the cutting is concerned the most cost effectiveness
is “Neely Ravi cattle Farms” owned and managed by Khizar Hayat. Hence for
the time up till further growth of knowledge curve in the project NRCF is
current choice.
Where as in the export context the ‘Chirag enterprises’ is another viable
option, since they are veterans in meat exports to other countries. Such
assistance would be of high materiality towards such choice.
Cost structure:
The cost structure rests upon the decision of which supplier is chosen.
Currently quoted prices of both the suppliers above mentioned are as follows:
Neely Ravi Cattle Farms, Sahiwal:
Activity Rate (range in Rs)
Live stock cost 80 to 120
Cutting 5 approx per kg
Packing 2 to 5 per bag (size dependent)
Total quoted rate 110 to 155 (depending on open market rate)
Chirag enterprises:
The quoted price is about RS 220/ kg. The reason of such a high price as
explained is the responsibility of meeting all the standards and regulations of
the international market to render the produce fit for export purposes.
