Introduction to International Marketing




A1] A] Tariff Barriers v/s Non Tariff Barriers:

All countries are dependent on other countries for some products and services as no country can ever hope to be self reliant in all respects. There are countries having abundance of natural resources like minerals and oil but are deficient in having technology to process them into finished goods. Then there are countries that are facing shortage of manpower and services. All such shortcomings can be overcome through international trade. Though it seems easy, in reality, importing goods from foreign countries at cheap prices hits domestic producers badly. As such, countries impose taxes on goods coming from abroad to make their cost comparable with domestic goods. These are called tariff barriers. Then there are non tariff barriers also that serve as impediments in free international trade. This article will try to find out differences between tariff and non tariff barriers.

Tariff Barriers:

Tariffs are taxes that are put in place not only to protect infant industries at home, but also to prevent unemployment because of shut down of domestic industries. This leads to unrest among the masses and an unhappy electorate which is not a favorable thing for any governmentt. Secondly, tariffs provide a source of revenue to the government though consumers are denied their right to enjoy goods at a cheaper price. There are specific tariffs that are a one time tax levied on goods. This is different for goods in different categories. There are Ad Valorem tariffs that are a ploy to keep imported goods pricier. This is done to protect domestic producers of similar products.

Non Tariff Barriers:

Placing tariff barriers are not enough to protect domestic industries, countries resort to non tariff barriers that prevent foreign goods from coming inside the country. One of these non tariff barriers is the creation of licenses. Companies are granted licenses so that they can import goods and services. But enough restrictions are imposed on new entrants so that there is less competition and very few companies actually are able to import goods in certain categories. This keeps the amount of goods imported under check and thus protects domestic producers.

Import Quotas is another trick used by countries to place a barrier to the entry of foreign goods in certain categories. This allows a government to set a limit on the amount of goods imported in a particular category. As soon as this limit is crossed, no importer can import further quantities of the goods.

Non tariff barriers are sometimes retaliatory in nature as when a country is antagonistic to a particular country and does not wish to allow goods from that country to be imported. There are instances where restrictions are placed on flimsy grounds such as when western countries cite reasons of human rights or child labor on goods imported from third world countries. They also place barriers to trade citing environmental reasons.

What is the differenece between tariff barriers and non-tariff barriers

• The purpose of both tariff and non tariff barriers is same that is to impose restriction on import but they differ in approach and manner.

• Tariff barriers ensure revenue for a government but non tariff barriers do not bring any revenue. Import Licenses and Import quotas are some of the non tariff barriers.

• Non tariff barriers are country specific and often based upon flimsy grounds that can serve to sour relations between countries whereas tariff barriers are more transparent in nature.

B] GATT v/s WTOl 

General Agreement on Tariffs and Trade is commonly referred to as GATT. It was created in 1948 with the aim of bolstering international trade by reducing trade barriers between countries through negotiations. It was replaced by World Trade Organization in 1995 after prolonged deliberations that continued for 8 years in GATT. There are more than 125 members of WTO and more than 90% of total international trade is governed by the rules of WTO. There are many who get confused between the now defunct GATT and WTO. This article will explain the major differences between GATT and WTO.

GATT was under International Trade Organization that worked under the aegis of the UN. However, ITO got sidelined as US refused to ratify it which is why GATT itself evolved a new organization called WTO. The last round of GATT was held in Uruguay in 1993 before it transformed into WTO. Though there were rules in GATT for resolution of disputes, it did not have enforcement power which led to many disputes. WTO has much stronger provisions for enforcement of the rules. If a member state is aggrieved, it can lodge complaint with WTO that will strive to ensure that the transgressor complies with the provisions of WTO. WTO can even impose trade sanctions against erring members as a last resort. The very fact that GATT, which started with a mere 23 members in 1948 was instrumental in associating over one hundred more members till it got rechristened as WTO is a reflection of the efficacy of the organization.

What is the difference between GATT and WTO?

• As an organization, GATT had provisional legal agreement whereas WTO has legally permanent provision.

• Whereas the members were called contracting parties in GATT, they are real members in WTO.

• While GATT was limited to trade in goods only, the scope of WTO is broader with services and intellectual property rights also included in it.

• The most notable difference is the establishment of a dispute settlement mechanism that has the power to impose trade sanctions against erring parties.

• While GATT allowed domestic legislation to continue, WTO does not permit this practice any more.

• GATT was weak while WTO is more powerful.

A2] International Marketing Research:

International Marketing Research (IMR) can be defined as market research conducted either simultaneously or sequentially to facilitate marketing decisions in more than one country.

The process calls for studying the various market characteristics for facilitating marketing decisions that can be taken across countries. The studies deal with tracing the various components that are responsible for the marketing the product.

So how is it different from Domestic Marketing?

The process of international marketing research though involves the same disciplines as domestic research, has some differences compared to its domestic version. The major differences are

• The national differences between countries arising out of political, legal, economic, social and cultural differences and,

• The comparability of research results due to these differences.

a. Cultural Differences: Culture refers to widely shared norms or patterns of behaviour of a large group of people. It is defined as the values, attitudes, beliefs, artifacts and other meaningful symbols represented in the pattern of life adopted by people that help them interpret, evaluate and communicate as members of society. The need for greater cross cultural awareness is heightened in our global economies. Cross cultural differences in matters such as language, etiquette, non-verbal communication, norms and values can lead to cross cultural blunders as illustrated by the following marketing mix:

• Product: A soft drink was introduced into Arab countries with an attractive label that had six-pointed stars on it. The Arabs interpreted this as pro-Israeli and refused to buy it. Another label was printed in ten languages, one of which was in Hebrew again the Arabs did not buy it.
• Price: An American firm was trying to get an acceptable price for their product from a Japanese buyer. The Americans presented a very detailed presentation and offered what they felt was a reasonable price. After a few moments of silence, the Americans thought the Japanese were going to reject the offer so they lowered the price. There was more silence by the Japanese. The Americans then said they would lower their price one last time and that this was the lowest they could go. The Japanese accepted this offer after a brief silence. The Japanese later said the first price was within an acceptable range, but it was their custom to consider the proposal silently before giving their decision. The Americans lost a lot of profit by jumping the gun and believing that Japanese respond just like the Americans do.
• Place: A well known drinks company tried to introduce a two litre drinks bottle into Spain, but found it hard to enter the market - they soon discovered this was because few Spaniards had fridge doors large enough to accommodate the large size bottle.
• Promotion: When PepsiCo advertised Pepsi in Taiwan with the ad “Come alive with Pepsi” they had no idea that it would be translated into Chinese as “Pepsi brings your ancestors back from the dead.”

b. Racial Differences: This would refer to the differences in physical features of people in different countries. For example, the types of hair care and cosmetic products needed in U.S would differ from those needed in South East Asia.

c. Climatic Differences: This would include the meteorological conditions like degree of rain and temperature range in the targeted foreign market. For instance, Bosch-Siemens had to alter their washing machines with a minimum spin cycle of 1,000 rpm and a maximum of 1,600 rpm in Scandinavia, owing to irregular sunshine. In Italy and Spain, on the other hand, it is sufficient to have a spin cycle of 500 rpm as there is abundant sunshine (Stevens & Davis, 1997).

d. Economic Differences: The level of economic development in a market can affect the desired properties of a product and in this way can inspire a company to adapt its products in order to meet the needs of the local market. The level of economic progress in a market can be assessed by a series of indications: The level of revenue and buying power of local consumers: This will have an influence on the technical conception and marketing of exported products. In richer countries where the state of economic progress is more advanced, consumers generally having a higher purchasing power and tend to prefer purchase of more sophisticated products with advanced functions, while people in poorer markets would be interested in a simplified version of the product. The state of infrastructure in the market: The general level of the quality of infrastructure in the country consisting of elements such as transport, energy communication systems, etc. can affect how the product is constituted as it can bring about different conditions of use. For instance when car manufacturer Suzuki entered India, it had to reinforce the suspension or the “road clearance level” of the cars as the state of the roads were poor.

e. Religious Differences: Religion has many impacts on products, more particularly on the ingredients, that constitute them. For example, in Islamic countries, companies, exporting grocery products based on beef have to furnish a certificate declaring that the animals have been slaughtered respecting “Halal” methods. Alcoholic drinks are equally banned in Middle Eastern countries. Religious restrictions can therefore require product adaptation.

f. Historical Differences: Historical differences help explain facts such as the playing of cricket in England, as opposed to game of Boulez in France. These differences have slowly evolved over time but have a profound effect on consumer behaviour. For example, drinking Scotch whiskey is considered prestigious and trendy in Italy, but old-fashioned and almost boring in Scotland.

g. Language Differences: Language is an important aspect of international marketing research. Inappropriate use of language could result in loss of market apart from turning out to be a cross cultural gaffe. For instance, U.S. and British negotiators found themselves at a standstill when the American company proposed that they “table” particular key points. In the U.S. “Tabling a motion” means to not discuss it, while the same phrase in Great Britain means to “bring it to the table for discussion.”

h. Differences in Actual and Potential Target Groups: In countries like England and Germany it is possible to do national samples. Small towns and villages can be included because distances are not great. In Spain, interviews can be conducted only in cities with populations of over 100,000 people, as the cost of interviewing people in small towns and villages is prohibitively high. In addition, the international marketing researcher may also have to deal with other factors such as differences in the way that products or services are used, differences in the criteria for assessing products or services across various markets and differences in market research facilities and capabilities. It depends on:

• What you need to get out of your international market research.
• What type of market research you are using.

The International Marketing Research Process:

The marketing manager and the researcher must work closely together to define the problem carefully and agree on the research objectives. The manager best understands the decision for which information is needed; the researcher best understands marketing research and how to obtain the information.

Managers must know enough about marketing research to help in the planning and to interpret research results. Managers who know little about the importance of research may obtain irrelevant information or accept inaccurate conclusions. Experienced marketing researchers who understand the manager's problem should also be involved at this stage. The researcher must be able to help the manager define the problem and to suggest ways that research can help the manager make better decisions.

Defining the problem and research objectives is often the hardest step in the research process. The manager may know that something is wrong without knowing the specific causes. For example, managers of a retail clothing store chain decided that falling sales were caused by poor floor set-up and incorrect product positioning. However, research concluded that neither problem was the cause. It turned out that the store had hired sales persons who weren't properly trained in providing good customer service. Careful problem definition would have avoided the cost and delay of research and would have suggested research on the real problem.

When the problem has been defined, the manager and researcher must set the research objectives. A marketing research project might have one of three types of objectives. Sometimes the objective is exploratory—to gather preliminary information that will help define the problem and suggest hypotheses. Sometimes the objective is descriptive—to describe things such as the market potential for a product or the demographics and attitudes of consumers who buy the product. Sometimes the objective is casual—to test hypotheses about cause-and-effect relationships.

A3] Pros and Cons for Joint Venture:

Joint ventures can be defined as "an enterprise in which two or more investors share ownership and control over property rights and operation".The joint venture is becoming a popular way for companies that outsource their operations to retain a piece of the ownership pie. The creation of a new legal entity during the launch of a joint venture comes with its share of ups and downs.

 

PROS:

·         Joint ventures enable companies to share technology and complementary IP assets for the production and delivery of innovative goods and services.

·         For the smaller organization with insufficient finance and/or specialist management skills, the joint venture can prove an effective method of obtaining the necessary resources to enter a new market. This can be especially true in attractive markets, where local contacts, access to distribution, and political requirements may make a joint venture the preferred or even legally required solution.

·         Joint ventures can be used to reduce political friction and improve local/national acceptability of the company.

·         Joint ventures may provide specialist knowledge of local markets, entry to required channels of distribution, and access to supplies of raw materials, government contracts and local production facilities.

·         In a growing number of countries, joint ventures with host governments have become increasingly important. These may be formed directly with State-owned enterprises or directed toward national champions.

·         There has been growth in the creation of temporary consortium companies and alliances, to undertake particular projects that are considered to be too large for individual companies to handle alone (e.g. major defense initiatives, civil engineering projects, new global technological ventures).

·         Exchange controls may prevent a company from exporting capital and thus make the funding of new overseas subsidiaries difficult. The supply of know-how may therefore be used to enable a company to obtain an equity stake in a joint venture, where the local partner may have access to the required funds.

CONS:

·         A major problem is that joint ventures are very difficult to integrate into a global strategy that involves substantial cross-border trading. In such circumstances, there are almost inevitably problems concerning inward and outward transfer pricing and the sourcing of exports, in particular, in favour of wholly owned subsidiaries in other countries.

·         The trend toward an integrated system of global cash management, via a central treasury, may lead to conflict between partners when the corporate headquarters endeavors to impose limits or even guidelines on cash and working capital usage, foreign exchange management, and the amount and means of paying remittable profits.

·         Another serious problem occurs when the objectives of the partners are, or become, incompatible. For example, the multinational enterprise may have a very different attitude to risk than its local partner, and may be prepared to accept short-term losses in order to build market share, to take on higher levels of debt, or to spend more on advertising. Similarly, the objectives of the participants may well change over time, especially when wholly owned subsidiary alternatives may occur for the multinational enterprise with access to the joint venture market.

·         Problems occur with regard to management structures and staffing of joint ventures.

·         Many joint ventures fail because of a conflict in tax interests between the partners.

A4] A] Mahindra trucks on US roads:

The company has announced that it has no date in mind for its American introduction, and that as of right now, its progress into this market is indefinitely delayed. The hang-up resides in an ever-growing legal battle between the Indian company and its almost-was importer here in the States, Global Vehicle USA. As you'll likely recall, GV USA claims that Mahindra improperly terminated its contract with them earlier this year, noting that the automaker now wants to sell vehicles directly to U.S. customers instead of going through a middle man.

B] Three Aspects of Marketing Strategies that need to be adapted in the US markets are:

1. Product Strategies:

Product adaptation is necessary under several conditions. Some are mandatory, whereas others are optional.

a.   Mandatory Product Modification:

The mandatory factors affecting product modifications are the following:

• Government mandatory standards (i.e. country’s market regulation).
• Electrical current standards
• Measurement systems
• Product standards and systems

Regulations are usually specified and explained when a potential customer requests a price quotation on a product to be imported. For example, Switzerland banned the use of phosphates in detergents in 1986, and the regulation also requires labels and packages to show chemical composition of the product. Avon shampoos had to be reformulated to remove the formaldehyde preservative, which is a violation of regulations in several Asian countries. Food products are usually heavily regulated. Added vitamins in margarine, forbidden in Italy, are compulsory in the UK and Holland.

Products must be modified to compensate for differences in electrical current standards. The different electrical standards (phase, frequency and voltage) abroad can easily harm products designed for use in home country. For example, Stereo receivers and TV sets manufactured for the US 110-120 volt mode will be severely damaged if used in markets where the voltages are twice as high, such as India (220-230 volt mode).

Like electrical standards, the measurement systems can also vary from country to country. Since 1989 the European Union Countries no longer accept non metric products for sale. The International Convention on the Harmonized Commodity Description and coding system standardizes commodity classification for all major trading nations. The International System Units is the official measurement adopted by all trading nations.

Some products must be modified because of different operating systems adopted by various countries. For example, US use NTSC (National Television System committee) standards for Televisions where as Germans use PAL (Phone Alternating Lines) standard. Hence product modification is necessary for these country manufacturers to export to other countries.

b.   Optional Product Modification:

Optional modifications for a product are the international marketer’s actions taken so as to make the product more suitable for the country markets. For example, Nescafe Coffee, a brand owned by Nestle tastes differently in different countries. Nescafe in Switzerland tastes quite different from the same brand sold just a short distance across the French border.

Optional modification of products may be required may be related to:

·         Physical distribution

·         Local use conditions

·         Climatic conditions

·         User's habits

·         Environmental characteristics

·         Price

·         Local customs and culture

2. Promotion Strategies:

An international marketer may have to use all forms of promotion mix: advertising, publicity, sales promotion and personal selling. The importance of the tools used to promote differs from country to country.

a.   Personal Selling:

In spite of the high cost, personal selling should be emphasized when certain conditions are met. Individuals buying or large volume purchases, characterized by a large amount of money being involved justifies personal selling attention. Personal selling has also proven to be effective when the market is concentrated or when sales person must develop a measure of confidence in the customer for the purchase. In general, personal selling works well with high-unit-value and frequently purchased products. Such products usually require demonstration, are custom-made or fitted to individual’s need or involve trade-ins.

The attitude of the customer towards sales person differs from one country to another. Asian business people do not like to discuss business deals with a foreigner who does not come highly recommended by some mutual acquaintance.

Varying Style of Personal Selling:

In Japan, employees are agreeable to the practice of having sales persons call on their employees at the workplace. Japanese sales persons sell cars door-to-door. In US, sales persons entertain clients at either breakfast or lunch. Hence, the style of selling differs from country to country. Some the methods are:

• Intercultural Negotiations
• Motivation
• Expatriate Personnel

b.   Publicity:

Publicity is often viewed as promotional component that is possible to manage. News releases to the media may not be utilized by the media. If used, they may not be utilized in the manner intended. This problem is that publicity is usually managed in a haphazard way.

The Heinz Company provides an example of how publicity should be managed. Heinz understands the need for good corporate citizenship, especially in nations once suspicious of western economic influence. In China and Thailand, Heinz has worked closely with government officials and nutrition experts to give assurance that its presence is a benefit to the public health. In Zimbabwe, the Heinz Foundation and three other corporations donated over $200,000 to build and run a medical clinic.

Pepsi, a minor brand in Japan, wanted to become known as a major international brand. To achieve this objective, the company tied its promotional campaign to Michael Jackson’s 13 concerts in Japan. Pepsi buyers could send proof of purchase seals to apply for tickets, jackets, T-shirts and key chains. The company’s publicity campaign went well evidenced by 100% increase in summer sales.

c.   Advertisement:

Advertising is the most challenging act for an international marketer. The difficulty is for two major reasons:

• Advertising is inevitable for international marketers to inform the target customers in country markets.
• Diversity of media in foreign countries and regulations related to advertising.

Advertising can be affected in several ways by local regulations. The availability of media (or lack of it) is one example. Belgium prohibits the use of electricity for advertising purposes between midnight and 8 a.m. German laws regulate TV advertising contests and limit advertising on the national TV channels to twenty minutes a day, switching advertisers to switch from state-run TV to private channels. Greece and South Korea ban the erection of new signs. The advertising industry may have a local self regulatory organisation which regulates the styles and contents of promotional activities. In England, no medium can be used to advertise alcoholic drinks if more than 25% of the audience is under 18 years. In India, liquor advertisements are banned in all mediums. Norway, Finland, Italy, Iceland, Mozambique, Algeria, Jordan, Sudan, Bulgaria, Czechoslovakia, Hungary, Poland, Romania, Russia, Yugoslavia and Singapore have fully banned advertisement of cigarette.

Hence International marketers have to be very careful while designing advertisements in foreign countries. The best strategy could be to tie up with a local advertising agency while planning and designing advertising campaigns.

International marketers could use the following advertising media for creating product awareness, availability, promotional schemes etc.

• Television
• Radio
• Newspapers
• Magazines
• Direct Mail
• Outdoor Advertising (Posters, Billboards, Painted Bulletins, Road-side and Store Signs and Electronic Spectaculars)
• Cinema
• Directories
• Stadiums
• Internet

3. Pricing Strategies:

Pricing the product in country markets is the most complicated decision to be done by international marketers.

Following factors have to be considered while pricing the products in country-markets:

• Supply and Demand
• Cost
• Elasticity and Cross-Elasticity of Demand
• Exchange Rate
• Market Share
• Tariffs and Distribution Cost
• Culture

A5] A] International Marketing Plan:

The marketing plan is the core part of the operative level of an international business plan. It contains an overview of strategic decisions relevant to short term marketing activities, such as product and country markets to be served, the benefits to be provided to customers in those markets and how to achieve their satisfaction in a way that contrasts attractively with major competitors.

The structure of marketing plan may be rather similar across industries and firms. In an internationally operating firm, marketing plans established by various operational units or close operation partners, such as distributors or franchisees, which are faced with different local environments, needed to be comparable in order to allow the aggregation of data.

The essential elements of international marketing plan are:

1.   Audiences

2.   Structure

1.   Audiences:

When preparing the international marketing plan, managers have to consider which target persons or groups they are addressing. Internal audiences may be the chief executive officer or the board of directors who need to be convinced of the plans content to implement it properly.

External audiences for the marketing plan may be capital owners, creditors, private and institutional investors and presumptive buyers of the company who are mainly interested in the return on and the risk of their investment. Hence they want the marketing plan to contain information relevant to them. For example, shareholders, investors and venture capitalists and bankers want a marketing plan to contain all information needed by financial analysts to assess the financial consequences of the proposed decision and planned actions.

Marketing plan should be as short as possible, clearly structured, consistent and convincing. Also, it is important to obtain agreement from all the parties involved as to the aims and objectives of the plan and to obtain commitment to its contents. An international marketing plan must have a flexible structure. It should allow the company to show in detail just those issues that are the specific audience is mainly interested in.

2.   Structure:

Businesses of companies preparing marketing plans vary greatly in their focus and extent. Small and only locally active firms have rather simply structured marketing plans compared to big and globally operating companies. The more product and country-markets a company serves, the more individual marketing plans need to be coordinated and consolidated to produce one single marketing plan for the entire company.

In addition, the legal regulations regarding commercial and tax accounting differ from country to country, making a comparison between marketing plans of various origin rather difficult.

B] Updates:

Preparing the marketing plan starts where the strategic part of the international marketing decision process ends. The principal results of this decision process, for example which country-markets to serve with which kind of product through which market-entry mode, may be valid for some longer term. Because the activities contained in the marketing plan and figures related to those activities are planned is great detail, they are subject to change. Consequently, at least a yearly update of the marketing plan is required. Planned activities and figures must be reviewed at least quarterly in light of actual developments in all environments of the company.

Any revisions of marketing plans where inputs like sales, prices, costs or currency exchange rates may change the marketing plan horizon. The horizon will vary with company’s business domain, but in most cases it is between two and five years. Forecasts for the subsequent periods must also be adjusted in line with the revised assumptions. Hence the companies will have rolling marketing plans which are responsive to change in business environment.

A6] Transportation of Fertilizers in bulk:

Before Shipment:

It involves the following steps:

1)       Collection of production of goods: In case an export commission house is acting as an agent of the importer, it will be in charge of collection of goods as per indent, from exporter i.e. local producers and manufacturers. The indent house will act as a principal in placing orders and securing the suppliers as per instructions of the foreign buyer. Once the goods for exports are collected or manufactured, the export commission house will have to look after packing and marking of goods as per usage or as per special instruction of importer.

2)       Arrangement of Shipment: The manufacturer exporter or merchant exporter can get exemption from the sales tax and refund of excise duty and customs duty. Certain legal formalities have to be performed before the goods are released for shipment.

3)       Pre-shipment Inspection: We have compulsory quality control for export goods. Export Inspection Council (EIC) does the pre-shipment inspection. Emphasis is on quality control and not on inspection for export. EIC gives an inspection Certificate in triplicate to the exporter.

4)       Forwarding Agent: In order to look after all shipping and customs formalities and the actual loading of the goods on board the ship, a specialist called Forwarding Agent may be appointed by the exporter. These forwarding agents are experts in their line of business and on nominal commission offer valuable services to the exporter. In particular, they perform the following functions:

a)       Negotiations of shipping contract,

b)       Customs formalities.

c)       Marine Insurance Policy, and

d)       Loading of goods and securing of Bills of Lading. Sometimes, the forwarding agents may also be entrusted with the work of packing, marketing etc., of the goods to be exported.

5)       Packing: Packing may be done by the manufacturer himself or may be entrusted to the packing agents. Packing for export is a highly specialised work. Firstly, packing must not only provided adequate protection for the goods, but must also be in accordance with the requirements of the shipping company and of the customs authorities. Secondly, the goods clearly marked, must be packed strictly as per contract, otherwise the buyer may perhaps refuse to take delivery. The forwarding agents are experienced in the general routine of export and know the special requirements of the importing country with reference to packing etc.

6)       Marking: Each package should be stamped with a distinct mark pointing out the name of the importer and port of destination. The gross weight i.e., weight of the package itself, and the net weight along with measurements should be marked on the package.

On Arrival:

Contamination of fertilizer can occur at a number of places throughout the supply chain; from manufacturer through to and including the voyage that the vessel takes to the foreign nation. Recognizing this, critical control points through the supply chain have been identified and related contamination management strategies developed. Whilst the full suite of contamination management strategies provides a high level of assurance that contamination has been managed effectively, it is acknowledged that they may not be practicable in all circumstances. Given this, the quarantine inspection protocols detailed below have been developed in a three level approach aligned with the type and number of control strategies employed by manufacturers and/or importers.

In instances where there are no recognized contamination management strategies in place, consignments are classified as Level 3, high risk. Where some specific strategies have been implemented, consignments are classified as Level 2, medium risk. Where the full suite of strategies has been implemented and there is a high level of confidence in the quarantine integrity of the consignment, it is classified as Level 1, low risk.

Pre-Arrival Documentation:

No later than 5 working days prior to arrival at the first discharge port, Pre-Arrival Fertilizer Information document and other relevant documents must be lodged. Failure to provide all of the information will result in the vessel and cargo being classed as Level 3, high risk.

The minimum information required includes:

1. The vessels name;

2. Intended ports of discharge;

3. Estimated Time of Arrival (ETA) at port;

4. Quantity of fertilizer to be discharged from each hold at each port;

5. Fertilizer type;

6. Manufacturing location;

7. Loading location;

8. Vessel's six previous cargoes, including load port and country, date (MM/YY) and cargo description. For vessels which have never carried actionable cargoes, please provide a complete trading history;

9. Vessel cleanliness certificate;

10. Bill of lading (B/L), and

11. Importer information contact details.

In addition;

12. For level 1 and 2 consignments, a Manufacturer’s Declaration is required; and

13. For level 1 consignments, the surveyor’s Vessel Survey, Inspection Report and Treatment Order and a sample analysis certificate are required.

It is essential that the importer includes the details of a contact person, to forward the assessed chemical fertilizer schedule to the appropriate person. These details should include the following:

1. The Person’s Name

2. Telephone number

3. Fax number

4. Email address

5. Postal address

Documentary Evidence Required For a Level 1/Level 2 Supply Chain Applications:

1. The importer’s details, including contact name, Import Permit number, phone and fax number and email address.

2. The type of facility including diagrams/pictures and extensive plans of the plant.

3. A brief description of the processes that the facility performs.

4. The country of operation, including a brief history of operation.

5. A site plan, particularly in relation to the wharf (including pictures, if available).

6. A list of types of fertilizer manufactured at the site.

7. A copy of the manufacturer’s quality assurance and/or work procedures.

8. A flow chart identifying all movements of the fertilizer from mine to ship’s hold. Steps should include the mine/plant location and manufacturing location.

9. Storage including terminal storage, seaport terminals and cleaning processes. List of all commodities stored in the same facilities and other commodity storage facilities nearby in the area.

10. Methods of transport including barges, railway, trucks and conveyor systems. This should include all other commodities which are transported using the same transportation or are transported in the direct vicinity and the cleaning process (if any) of transport.

11. Loading facilities including ship belt conveyors, bottom dumpers, hoppers, grabs, front-end loaders, conveyors and any other transfer equipment used. This should include all other commodities, which are loaded using the same facilities or are loaded in the direct vicinity of loading facilities and the cleaning process (if any).  

12. Details of the inspection location and access to treatment facilities.

13. A nominated date when the offshore inspection will occur and the expected duration.

14. Details of how samples are drawn for analysis and by which parties and what International Standards are applied

15. Details of sampling process, manual or automatic

16. Details of other commodities transported to or from berths

17. A signed declaration from the manufacturer stating that they are prepared to undergo an audit every three years and if they wish to maintain Level 1, provide with an independent audit report every year to verify that no changes have been made to the manufacturing process, supply chain and load port. Any action undertaken to maintain the system as audited, is acceptable.

18. Details of person to accompany the Officer on site audit or contact details for overseas appointed person.

General Inspection of Empty (Dry Box) Containers:

The Approved Person will record the container number of all containers inspected on the FIFA Empty Container Inspection Record. (FECIR)

Note: All containers inspected, including rejected containers will be recorded on the FECIR. If any of the following pests are either found or suspected to be present either on the outside or with in an empty (dry box) container;

• Giant African Snail,
• Khapra Beetle,
• Termites,
• Asian Gypsy Moth, or
• Japanese Tussock Moth,

The Approved Person will undertake to control and remove the pest.

In all cases where these pests are found / suspected to be present in / on an empty (dry box) container the ‘Approved Person’ must notify the importer at the earliest opportunity and obtain a direction as to the actions required for the container / prevention measures to be taken to contain / destroy the pests.

External Inspection of Empty (Dry Box) Containers:

Inspect the outside of the container including the roof to examine for the following:

• The exterior of containers must be free of insect infestation, infestible residues and adhering soil.
• Particular attention should be paid around doorways, fork holes, locking cams and ledges, the discharge chutes and roof hatches to ensure they are free of insects and infestible residue.
• Presence of structural damage on the outside of the container, including the presence of fumigation nipples.
• That the door and door-seals are free of damage.
• That door locks / securing devices are examined and tested to ensure that the container can be securely fastened.

Note: Containers must be safely inspected thoroughly on all exterior surfaces, including the underside frame and fork holes.

If any of the above defects are found the container should be deemed to have failed the inspection and be rejected by the Approved Person.

Container Light Check:

The Approved Person will perform a light check on each container inspected. This will entail the person assisting the Approved Person closing up the container with the

Approved Person inside to determine that the container walls (including floor and ceiling) door / hatch seals are sound.

Note: It is the Approved Person’s responsibility to determine whether or not it is safe to be inside the container for the duration of the light check.

Where the Approved Person feels that it would be unsafe to perform a light check the container in question should be deemed not to have passed inspection.

If light can be seen from with in the container, the Approved Person will record the defect and reject the container.

Internal Inspection of Empty (Dry Box) Containers:

The Approved Person is to examine the inside of the container with the doors open.

The Approved Person must pay particular attention to the following areas for the presence of actionable cargo/items: insects (including all life cycle stages), rodents (including droppings) weed seeds, infestible residues (including previous cargo grain / plant materials) non infestible residues, flaking paint, rust, wet areas (including condensation):

• Around the door seals, discharge chutes and roof hatches,
• The floor of the container, in particular tongue and groove flooring,
• Horizontal ledges at or near the wall / roof angle,
• Ceiling and walls, including ventilation grills,
• The floor / wall angle,
• Around bulk heads if fitted,
• Inspect temporary bulk heads (if available) and,
• Ensure that all ventilation grills /openings are taped / sealed.

The vents in the container will be sealed with tape of other material to prevent the introduction of pests.

Where container liners are to be used / re-used the Approved Person will inspect liners to ensure they are free of actionable cargo/items including, insects, residues, and only allow installation after the container itself has been passed as fit for use.

Precautions to be taken during Transportation of Fertilizers in bulk:

It is of vital importance that fertilizers in bulk are protected against humidity of all kinds, to keep them free from lumps and free-flowing if this is not done; large quantities will certainly be destroyed causing difficulties both for oneself in handling and also for those who will later have to spread the fertilizer on the fields.

1)       Bulk material must not be discharged while it is raining. When unloading into trucks or rail wagons the loading area must be clean and dry. Look out for remaining grain.

2)       The floor of the warehouse must be asphalt, or better, concrete. It must be of such a nature that humidity cannot penetrate from the ground. New concrete structures should be cast using ‘Corrocem’ inhibition to make the concrete resistant to chemical aggression.

3)       All untreated concrete areas which come into contact with the fertilizer must be treated with an impregnation preparation. This is to protect the concrete when fertilizer is stored as bulk for a long time. For short term exposure, 1-2 weeks, this is not specially required. Such impregnation will make it easier to keep the warehouse clean and prevent the formation of lump due to changes of humidity in the concrete.

4)       If a conveyor with a tripper, or something similar, is used for storing material in a bulk store, it should be moved so that the material is spread fairly uniformly to avoid granule size separation. If this not done, it will be observed that the small granules will be concentrated at the top of the pile or along the crest of the pile, whereas the large granules will be concentrated at the foot of the pile.

5)       Separation or segregation, as this effect is called, may result in noticeable variation in rates of application and spreading width when the material is spread on the fields.

6)       As soon as possible and not later than one day after the material has been stored, it must be covered with plastic sheeting. This should be 0.10-0.15mm thick and preferably 6m wide. The joints must overlap by about 0.5mm.

7)       In order to avoid unnecessary air circulation doors and other openings must be kept shut as far as possible.

8)       The floor and driveways in the warehouse must be kept free of fertilizers. Moisture and dissolved fertilizers are best removed with dry sawdust.

9)       When removing material from the warehouse, no more than necessary of the plastic sheet must be removed. The bulk material must be covered again immediately after the work has been finished.

10)   If material is moved by pay loader, the driver must be instructed that;

·         The shovel must be shaken immediately after each loading.

·         The wheels must not be driven into the material as this will crush the material to dust.

11)   Urea especially has a tendency to cake during storage, and urea and also other grades should therefore be screened before they are bagged. Screening should also be done in the case of bulk supply to farms. At times the lumps may amount to a considerable percentage of the total material. It is therefore important that the screening surface is made sufficiently wide and long as many lumps will be broken by passing over the screen. This partial flow may attain much as 5-10 percent of the main flow. A sieve aperture of 8 x 15 mm is recommended.