international co-operative alliance1 co-operatives as global business enterprises garry cronan ica...
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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
2International Co-operative Alliance
Global 300
Are co-operatives really global business enterprises?
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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
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Global 300
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Global 300
Background and need for such a project
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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
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Global 300
Why the need for such a list?
• 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.
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Global 300
Why the need for such a list?
• 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
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Global 300
Why the need for such a list?
• 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
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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
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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
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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
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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.
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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
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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?
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Global 300
What have we learnt?
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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
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Global 300
www.global300.coop
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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
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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
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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%
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Global 300
Do co-operatives make economies more competitive?
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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
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Global 300
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Global 300
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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
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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
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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
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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
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Global 300
CSR today
• Widely used concept
• Various definitions
• Reporting important
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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
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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
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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
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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
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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
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Global 300
Thank you
Garry Cronan
Global 300 Director
www.global300.coop