Trade Deals create the right chemistry for growth
Trade agreements lead to more freedom to operate and more control over our product.
Managing Director, CeraNovis
This Saarbrücken business exports 35% of its output beyond the EU’s borders, to countries with and without trade agreements. “The difference a trade agreement makes,” says Mr. Meyer, “is significant”.
CeraNovis supplies a wide range of high-performance coatings for industrial applications in the heat exchange, foundry, and space industries. The products are at the top end of the market, but customers are nonetheless always influenced by price. This is where trade agreements really show their strength. “Due to the elimination of tariffs, CeraNovis is a really competitive player in Canada, South Korea and South Africa,” Mr. Meyer says, and revenues have increased for the company as a direct result of trade agreements with these markets.
Time saved is money saved
Transporting chemicals across borders can be complicated. For a young company with a small supply chain management team, the paperwork can be very burdensome when there is no trade agreement. For example, getting CeraNovis’ products to Chinese customers is always a difficult process whereas selling to their South Korean customers, under the EU-South Korea Trade Agreement, is “a piece of cake”, says Mr. Meyer.
For CeraNovis, CETA, the EU-Canada trade agreement, has brought particular advantages. Since CETA, the declaration of conformity has become much easier and overall, an administrative process that previously took two days now takes two hours. Also, CeraNovis can now act as a registered exporter with certificate of origin. “For our customers, this has made the import process much easier and, in addition, the elimination of duties has reduced the end-cost of our product in Canada by 5-10%,” says Mr. Meyer.
Personal touch adds value
CeraNovis, as a small business supplying a niche product, really values direct contact with their customers. “This helps us keep our finger on the pulse of what customers need,” says Mr. Meyer. For him, close relationships with customers are almost impossible without a trade agreement.
When CeraNovis exports to countries without a trade agreement, they have to use a local representative. Not only does this affect the bottom line, as the representative takes a percentage, but that all-important direct customer contact is often lost. Where there is a trade agreement, they maintain close business relationships enabling them to provide customised solutions and directly address their customers’ needs.
In a few short years, CeraNovis has carved out a space for itself, employing 15 people and now operating independently of its venture capital beginnings. Trade agreements have been instrumental in the development of their international markets and they continue to look at countries with trade agreements for new markets. The perks are too good to ignore.