British manufacturers eye off emerging export markets

Posted on 10 Feb 2014 by Callum Bentley

Emerging markets are becoming the main target for British manufacturers looking to export, with a range of tactics being used to get a slice of the pie.

Britain’s manufacturers are adopting a wide range of strategies to take advantage of escalating demand in emerging markets, on the back of new analysis showing the potential rewards on offer according to a report published today.

The report and analysis of data, which includes a number of high performing exporter case studies exploring how best to enter new markets and increase exports is published by EEF, and Barclays. The report highlights that while many commentators have lamented the UK’s export performance, companies are moving from ad-hoc exploitation to implementing sophisticated strategies to boost exports.

The report shows that some manufacturers looking for future growth are becoming more strategic in their pursuit of new customers by proactively targeting markets rather than reacting to potential opportunities.  Others are building greater resilience by expanding the number and range of markets they sell to.

According to the report, the developed economies remain the top destination for UK goods with the US the biggest. However, the increasing importance of emerging markets is highlighted by the fact China has moved from being the UK’s 11th largest market in 2007 to 7th last year with Russia and India (12th and 14th respectively) likely to enter the top ten in the next few years.

Furthermore, the report shows half the countries in the top ten priorities for manufacturers were emerging markets with Brazil at the top with just under one third of companies planning to export there in the next twelve months.

Whilst the Eurozone remained the top destination for market involvement in 2013, almost two thirds of companies were planning to increase their involvement in Asia, just over half in the Middle East and just over one third in both Africa and South America.

Top 10 markets by value, Jan-Oct, 2013

The report also highlights that whilst companies are making use of government support, and rate it highly when they use it, there is continued lack of awareness of the breadth of expertise and help available.

Commenting, Ms Lee Hopley, Chief Economist at EEF said: “There are no hard and fast rules about the best way to enter new markets. But what is clear is that it demands considerable time and commitment,” she said. “However, those companies who generate results are ultimately rewarded with better performance and a diverse and resilient customer base. If we are to double our exports by 2020 then we simply have to get more and more companies exporting, helped by a government led crusade highlighting the benefits of UKTI.”

Mike Rigby, Head of Manufacturing at Barclays also commented, saying: “It is encouraging to see an increasing appetite amongst manufacturers to invest, export and grow their international footprint. If the sector is to be at the forefront of an export-led recovery, it appears manufacturers are up to the challenge.

“They not only realise the benefits of exporting to markets nearer home but also of taking their goods further afield to faster growing emerging market economies where the export sales potential is far greater. This does require a lot of preparation and know-how but fortunately there is plenty of help around so they won’t have to embark on their export journey alone.”