Martin Kallervald, Regional Manager at the Swedish export credit agency (EKN), has just come to the end of a six-month secondment with NZECO. EKN is one of the most experienced export credit agencies in the world, with nearly 80 years experience in trade finance and assisting exporters. By the end of 2011 EKN was supporting SEK 63 billion (NZD 11.6 billion) worth of trade in 126 countries.
We asked Martin what he has learned about doing business in New Zealand, compared with at home.
What have you observed about doing business in NZ that is different from home?
I guess the way that geography comes into place has been interesting. 73% of Swedish exports go to Europe. There're some obvious challenges with that in the current environment but overall – it's great advantage to have that huge market on your doorstep. New Zealand's remote position provides a certain challenge.
A similarity that I've noticed in both places is that SMEs sometimes lack strategy for how they think about credit risk. What risk levels are we comfortable with and what do we off-load? It's also obvious that winning or losing a deal sometimes comes down to payment conditions and not knowing your appetite for credit risk in that situation can be disastrous, which is an unnecessary situation since there are plenty of tools to deal with it.
Can you comment on the profile of New Zealand exporters compared to Swedish exporting firms?
I've worked with SMEs at EKN for about six years. Other teams within EKN provide export credit support to large companies like Ericsson, Volvo, ABB, etc. These and other large companies are of course very important to the Swedish economy - the 100 largest Swedish exporters account for nearly 40% of our total exports. However, the same figure for New Zealand is 66%, ie 100 companies do two-thirds of your exports.
It has also been a bit surprising how important the primary sector is. I knew that primary industries were always going to be a big thing over here, but I might have underestimated the importance of that one sector. It was no surprise then that I was working on a wool exports transaction on Christmas eve...
The Swedish economy might be a bit more diversified. We've got about 38,000 SME companies who export whereas New Zealand has roughly 14,000. Irrespective of that, helping SMEs make the most of international opportunities is key to the future wealth of both our countries.
What surprised you about the difficulties facing New Zealand exporters, and our solutions for overcoming those challenges?
That there's a lot of similarities compared to back home. The ever-ongoing debate on access to capital for SMEs for instance. Cost-efficient trade finance solutions are just harder to come by for your average SME. NZECO has a very similar product portfolio to EKN that often enable those SMEs to access trade finance or means of funding.
Businesses and bankers that understand how engaging with NZECO can help them will have a competitive edge.
Can you offer any advice to New Zealand exporters or bankers who are considering engaging with NZECO?
My advice is, of course, to contact the team at NZECO. I have many examples from back home of exporters and bankers who understand that engaging with an export credit agency can increase their exports and, inevitably, help to increase their competitive edge. I do have to recognise though that exporters and bankers back home are more familiar with capabilities and processes of EKN – which is natural seeing as we've been operating in the trade finance market since 1933.
What has been the most memorable thing about working in New Zealand for the last six months?
Oh, I quite like the photo I took of my colleagues hiding under their desks. They claim it was an earthquake drill but I know that life in a cubical can be quite stressful and sometimes you just want to get away from it all. I can really recommend it; new perspectives can do wonderful things for you.