Sharing Experiences: Enhancing the Benefits to Communities from Extractive Industry Projects “ Cajamarca: Opportunities for Local SME’s through Business Rounds” Oscar Manuel Mendoza Washington D.C., June 19th, 2006

2 Contents Context for the business rounds The business rounds Methodology of the business round The process of the business round Basic aspects for a good negotiation of SME’s Résumé of lessons learned Future challenges

3 Context for the business rounds 1990: Three sectors: Tourism Milk derivates Wood 2006: More potential sectors: To export: Mining Tourist Agro-industry Forest – wood Farming: fruits, vegetables, beans To national market: Milk derivates Tourism Services Transport Construction Metal workmanship Aquaculture

4 The business rounds  Business encounters  Direct commercial linkage mechanism  Promotes entrepreneurial appointments  Facilitates:  Public and private sale – demand linkage  Face to face entrepreneurial bargaining  Contributes to identify market opportunities  Disseminates market information at low transaction costs EventParticipants Amount of business US$ Business Round Business Round Business Round

5 Methodology for the business rounds Before the business round The business round After the business round Local business registration Commercial brochure edition Dissemination of information Counterparts searching Demand – Sale matching Appointment schedule Dissemination of information Business encounters Business escorting until closing

6 The process of the business round At the beginning: Identification of local suppliers Incorporation to the big company’s supply chain Development of local services The business round, now: Public – private combination effort Market openness: Domestic National Associativeness Identification of new demands: Focalized market research Commercial missions Customer orientation Present goal: Development of good suppliers Entrepreneurial days Workshops and seminars

7 Basic aspects for a good negotiation of SME’s Production cycle Present and future production capacity Product description: samples, brochures, technical profiles Strengths and differences with its competition, in quality and processes Prize policy, according to different amounts of requirements Post sale services: warranties, delivery times, technical support Flows and distribution: Kind of transport, fees, packages and packing Appropriate sale – demand description of the business

8 Résumé of lessons learned Linkage an small region to national markets, sorting infrastructure limitations Public – private alliance in order to promote local business Inter-institutional organizing commission Standardized methodology: Manual Software Checklist activities Budgeting process Auspices Redefinition and appreciation of entrepreneurial coaching in order to close business negotiation Strengthening of suppliers based on: Information dissemination Understanding of market rules Adequate preparation

9 Future challenges Consolidate the participation of traditional economical sectors in order to open new market opportunities Promote: The participation of farming sale actors, according to the local and national demands Brand development and registration, in order to help local business to expand to national and international markets Innovation, research and development through patents, industrial designs, utility models, trademarks, franchises, intellectual property Support the competitiveness of good suppliers Emphasize the business people training before the round Transference of the hole financing aspects to public and private institutions