international co-operative alliance1 co-operatives as global business enterprises garry cronan ica...

1International Co-operative Alliance

Co-operatives As Global Business Enterprises

Garry Cronan ICA Director of Communications

8th Asia-Pacific Ministers’ Conference on Co-operative Legislation and Policy - Kuala Lumpur, Malaysia


Global 300

Are co-operatives really global business enterprises?


Global 300

Outline of presentation

Global 300

• Background and need for such a project

• Our approach and methodology

• The first ever global listing of co-operative and mutual businesses – major findings

• Expanded programme in 2007

• Conclusions


Global 300


Global 300

Background and need for such a project


Global 300

Why the need for such a list?

• Demonstrate co-ops work in a business sense in the marketplace

• Question of visibility

• Question of being able to prove your case and act on it


Global 300


• Demonstrate co-ops work in a business sense in the marketplace– Particularly in some sectors of the market. Just because they

are large does not mean that they can’t still be co-ops or mutuals!

– Showing co-op values work and don’t limit business performance – commercial success and solidarity – important to instil confidence among co-operatives themselves that this way of operating works!

– Develop good practices models.


Global 300


• Question of visibility– Among co-operatives and mutuals themselves!

– With media, particularly the business media – international and national

– With business generally

– To government and policy makers generally, internationally, regionally, nationally and within industry sectors

– To academic and research institutions

– To business advisers, accounting/legal etc

– To the broader community


Global 300


• Question of being able to prove your case and act on it– Something of a “statistics crisis”, need to give profile to this

issue

– From rhetoric to evidence base - rigor and compatibility with other databases

– Be in a better position to respond to trends, opportunities or threats: e.g. demutualisation


Global 300

Benefits of Global 300 project

• Increase the profile of co-operatives, within their own industries, countries and internationally

• Demonstrate to government and other regulatory agencies the economic importance of co-ops and mutuals

• Modelling of good practice and highlight successful co-op business models and innovative approaches

• Create much improved statistical and data methodology to allow for better analysis of performance

• Establish networks between co-ops and mutuals within Global 300 for greater sharing of information, business intelligence and business opportunities

• Project is symbolic of a new direction and relevance for the global ICA


Global 300

Complying the list – some sources

There have been three main sources:

• Extensive web searches

• Existing databases, at national, regional and sectoral levels plus more general corporate listings

• Additional material provided directly by individuals or organisations


Global 300

Existing co-op databases

• Combination of extensive web based research and accessing some existing databases, e.g.

– Global - sectoral

• ICMIF - insurance

• NICE – agricultural

• WOCCU – Credit Unions, ICBA – banking

– Regional

• European sectoral organisations – consumer, agriculture, banking, insurance

– National

• USA – NCB’s Top 100, USDA Co-op Service

• Canada – Co-op Secretariat

• UK – Co-ops UK

• Japan – JCCU

• Establishing data exchange and research agreements with several organisations, NICE, ICMIF, USDA, NCB etc


Global 300

Methodology • Audited public accounts

• Revenue – same as NCB’s Top 100 co-op list and other business lists, but this criteria understates contribution of some sectors - will widen the criteria for 2007

• Economic unit – where business activities are conducted by independent business units or co-operatives but are consolidated (and audited) as members of a group, turnover of the group, is used. However there is a real issue in relation to dealing with subsidiaries

• The Global 300 includes a range of co-operative and mutual business structures – which can be classified into at least:

– Consortium + federation

– Co-operative groups

– Companies controlled by co-operatives

– Co-operative enterprises

– Mutual enterprises

• Currency – US currency has been used as benchmark with local currencies converted into USD on conversion rate at 2004 FY year end.


Global 300

Published the following information

• Rank (by turnover)• Name of organisation• Co-op/mutual structure• Country of origin• GCIS• Year of establishment• Turnover FY 2004 in USD• Assets FY 2004• Website address


Global 300

Some methodological issues

• Definition of co-operative (mutual) – what to include?

• Only ICA members or all

• Do you include organisations which have converted/demutualised since 2004?

• Need consistency – some databases complied on slightly different basis – establish “global standards”

• Is turnover the best criteria for ranking?


Global 300

What have we learnt?


Global 300

Some real surprises!

• The aggregate size – larger than many would have thought

• The combined turnover of the Global 300 is almost USD 1 trillion dollars – USD 963 billion (EUR 755 billion)

• By way of comparison, Canada the 9th economy in 2004 had a GDP (nominal) of USD 979 billion

• Turnover ranges from a minimum of USD 600 million up to USD 53 billion


Global 300

www.global300.coop


Global 300

What have we learnt - age

Global 300 Co-ops/mutuals 2004: Year of Establishment

0

5

10

15

20

25

30

35

40

45

Decade

Number


Global 300

What have we learnt - sectors

• Global 300 are concentrated into three key industry sectors– Agriculture – around a third of the list, (33%) represented in

virtually every country showing the universal application and success of this business model

– Retailing and wholesaling – around a quarter of the list (25%)

– Financial institutions – around 40%

• Insurance

• Banks

• Credit Unions

• Diversified financial

– Other areas represented include energy, health and manufacturing


Global 300

What have we learnt - countries • Countries with the largest total Global 300 revenue:

– France

– Japan

– USA

– Germany

– Netherlands

• Countries with the most Global 300 co-ops/mutuals– USA

– France

– Germany

– Italy

– Netherlands

• Countries with high % of GDP coming from Global 300 turnover

– Finland 21.1%

– New Zealand 17.5%

– Switzerland 16.4%

– Sweden 13.0%


Global 300

Do co-operatives make economies more competitive?


Global 300

What have we learnt so far?Market positions – some examples • No 1 retailer in Switzerland and the largest employer

• Largest European auction co-operative society with almost 40% of Belgian horticultural products

• Largest independent livestock marketing agency in USA

• World's largest tree nut processing and marketing company

• Europe's largest producer of UHT milk

• UK's largest grain marketing business

• World's largest miller and marketer of rice

• Largest soybean processing business in the world

• One of the largest institutional lenders in Japan

• Market leader in flower auctions with establishments throughout the Netherlands

• Europe's largest dairy business

• One of the top 10 dairy businesses in the world and is responsible for a third of international dairy trade

• One of Europe's biggest forest industry groups


Global 300


Global 300

A closer look at Asia-Pacific

Country $US Turnover %

China 3,951 2.2%

India 2,959 1.7%

Japan 140,219 79.4%

Korea 25,996 14.7%

Singapore 1,990 1.1%

Taiwan, China 1,488 0.8%

Total Asia 176,605 100.0%

Australia 2,007 11.8%

New Zealand 14,940 88.2%

Total Oceania 16,948 100.0%

Israel 2,750

Total Africa & ME 2,750


Global 300

Expanded programme in 2007-2009

• Building a community (network) of global co-op business leaders

• Developing a web-based global co-op database: consisting of co-op profiles, directories, financials, current news etc

• Creating a co-op business intelligence service which will include analysis and benchmarking performance, not only financial but also CSR etc

• Launching of a Global Co-op Business Magazine

• Holding a series of Global CEO and other related forums


Global 300

Focus of research and analysis in 2007 – 2009 Five key areas:

• Financial analysis of performance – balance sheet, P&L etc extending and deepening the Global 300 database to cover more co-ops and sectors

• CSR and co-op principles – map and benchmark performance

• Organisational structures used by Global 300 co-ops/mutuals – subsidiaries, hybrid entities, international operations

• Broader macro analysis – competitiveness, employment, local and regional investment, etc

• “Developing 300” – apply similar methodology to compiling list, comparative analysis, public policy implications – particular relevance to Asia


Global 300

Big but also different

• The first list established that co-operative and mutual businesses are big

• This year we are looking to demonstrate their difference by examining and documenting how they are operating in relation to Corporate Social Responsibility (CSR) and co-operative principles


Global 300

CSR today

• Widely used concept

• Various definitions

• Reporting important


Global 300

CSR Initiatives

• Many initiatives to report and benchmark CSR

• Normative – UN Global Compact, OECD Guidelines

• Measurement – Global Reporting Initiative, AccountAbility AA1000 Assurance Standards, ISO 14000 Environmental Management Standard

• Management Systems – Sigma Guidelines, AA1000 Framework


Global 300

Examples

Co-operative Activity

Membership PPKGO, Coffee Farmers - Indonesia

Strengthening community bonds through diversity of Co-op membership, in a region where tensions exist between cultures.

Employees and members NTUC Fairprice, Singapore Help provide access to education: $500,000 study loans to members employees’ families

Campaigning Zenkyoren, Japan Active in addressing serious issues within local communities: Zenkyoren National Traffic Safety Campaign


Global 300

Examples

Co-operative Activity

Environment Krishak Bharati Coopertive Limited (KRIBHO), Gujurat

Contribute to sustainable production methods: Set up bio-fertilizer plants and educate farmers about their benefits

Foundations Gujurat Milk Marketing Federation – Amul Relief Trust (ART)

Commit to disaster relief and community redevelopment:Rs. 50 million collected for reconstructing schools after 2001 earthquake


Global 300

Where to now• Seeking (data) partnerships with:

– Co-op/mutual businesses

– National co-op apexes

– National/regional governments

• Seeking core and sponsorship funding and in-kind resources – a number of packages available

• Looking to work together on communications and advocacy highlighting the Global 300


Global 300

Conclusions

• Global 300 – exiting new ICA business oriented programme – received overwhelming endorsement from our members and others

• Signals a new direction and emphasis – the Global 300 programme repositioning the ICA as the global champion and major source of knowledge on the co-operative and mutual business model

• Project will help drive global, regional and national initiatives on data collection and evidence based policy and advocacy

• Provides a very powerful communications tool to advance the cause of co-operatives


Global 300

Thank you

Garry Cronan

Global 300 Director

[email protected]

www.global300.coop

international co-operative alliance1 co-operatives as global business enterprises garry cronan ica...

Documents

global listing of cooperative

global ica slide

benefits of global

business media international

project slide

cooperative legislation

business sense

outline of presentation