Century-old business reaping the rewards from trade agreements
Ulla Kjær Jensen, Palsgaard’s Global Regulatory Affairs Manager, oversees a team that works on regulations and compliance.
When looking for export markets, Palsgaard always considers trade agreements because they impact business opportunities.
Ulla Kjær Jensen, Palsgaard
Whether or not you have heard of Palsgaard, you have more than likely consumed their products. They produce emulsifiers and stabilisers for the food industry. As these are specialised products used in small quantities, exports have always been significant to their business and today 90% of their products are exported.
Ms. Jensen's team works behind-the-scenes, studying the agreements to ensure that every Palsgaard product is correctly categorised. The composition of each product determines its category and therefore the tariff exemptions. Once this work is done, the export process is very easy.
Exports require either the EUR.1 certificate of origin form, an invoice declaration or a long-term supplier declaration (LTSD). Long-term supplier declarations are one-off declarations valid for consignments for a period of up to two years. “Because an LTSD is valid for a longer period, it further reduces paperwork”, Ms. Jensen says.
Massive savings on duties
Each trade agreement is different, so savings vary from country to country.
“The elimination of tariffs through the EU-South Korea Free Trade Agreement has translated into massive savings on Palsgaard products for South Korean customers.” For example, the duty on Palsgaard’s crystaliser solution for margarines and spreads has fallen from 36% to 0% as a result of this agreement. This significantly increases Palsgaard’s competitiveness on the South Korean market.
Palsgaard is finding the EU-Egypt Association Agreement particularly beneficial to their exports because “a large range of our products meet the requirement for preferential origin status and therefore benefit from duty exemption.” For example, Palsgaard produces a number of emulsifiers for cakes. The duties on many of these products have fallen from 5% to 0% as a result of the agreement.
Investing time today
Palsgaard has also been trading with Vietnam for some time and Ms. Jensen’s team is now looking into how the new EU-Vietnam trade agreement will benefit their business. This agreement came into force on 1 August 2020 and will eliminate over 99% of all tariffs, and partly remove the rest through limited zero-duty quotas. Palsgaard’s Regulatory Affairs team is currently studying the details of the agreement alongside each Palsgaard product to determine what tariff exemptions apply.
Reaping the rewards
Palsgaard currently has plants in Denmark, the Netherlands, Brazil, Mexico, China, and Malaysia. While these locations were chosen based on markets and/or supply of raw materials, Ms. Jensen is sure that “Palsgaard will be taking trade agreement opportunities into account for future plant locations.” With a century of trade behind it, Palsgaard is looking forward to continued global growth - thanks in no small part to the EU trade agreements. Good news for its employees!
Palsgaard, founded in Denmark over a century ago, is a European business with a long history of cross-border trade. The company currently exports to 110 countries including 40 countries with EU trade agreements.