David Atkinson, UK Head of Manufacturing SME & Mid Corporates, Lloyds Bank and colleague Ralph Edwards, Head of Trade Sales, discuss why the time is right for UK manufacturers to explore their export ambitions.
David Atkinson: “The UK is now the world’s fourth largest exporter, and it speaks volumes that, while fewer than one in ten UK businesses currently export, more than nine in ten UK manufacturers sell overseas.
“Yes, there are challenges, but manufacturers are adept in navigating them, and they have a vibrant support ecosystem to lean on too.
“Against this backdrop, Ralph, with your experience of helping manufacturers achieve their international ambitions, how do you view the current export environment?”
Ralph Edwards: “Manufacturers have been operating under some challenging conditions for many years now, but they are plainly thriving.
“Exporters tend to grow faster than those with a domestic focus, and they say it acts as a catalyst for greater innovation, recruitment, diversification and digitisation.
“And operating in multiple territories diversifies your customer base, helping protect your business from any domestic fluctuations.”
David Atkinson: “So, how can manufacturers best set themselves up to take the international opportunities that are out there?”
Ralph Edwards: “Manufacturers must act strategically. It’s important to make sure your finance team are fully plugged in with the commercial team and the operations team, so you’re thinking holistically.
“That can include everything from how much cash and inventory you hold, to how you negotiate payment terms. Some supply chains remain vulnerable, so consideration should be given to things like reshoring and diversifying suppliers, as well as the terms you agree with your suppliers and buyers.
“Trading internationally can mean longer sales and payables cycles, putting pressure on cash flow, so businesses need to be agile in order to optimise their working capital. That means continually reviewing inventory levels, lead times, payment terms and the potential for disruption.
“It’s also worth exploring how trade instruments can help mitigate risk if disruption does occur or trade finance to help with working capital.”
David Atkinson: “Still, it can be intimidating to enter new markets. What support is out there?”
Ralph Edwards: “The UK has an ambition to grow exports to a trillion pounds by 2030 and there have been some significant commitments to support exporting manufacturers.
“We work closely with the Department for Business and Trade for example, which offers a range of free training courses and has a team of experts who are on hand to answer practical questions on anything from customs rules to taxes and tariffs.
“And we partner with UK Export Finance to provide government-backed support to UK exporters, which can help free up working capital, ease cashflow constraints and scale up operations.”
David Atkinson: “And what about identifying the right markets and customers for your products?”
Ralph Edwards: “We’ve created an International Trade Portal, which is available for free to all manufacturers on our website; you don’t have to be a Lloyds Bank customer.
“It includes a database of more than a million buyers and suppliers around the world, as well as a live tender database. We’ve also compiled a library of more than 20,000 market reports and over 180 country profiles to help firms identify the best opportunities for their business.”
David Atkinson: “It seems like everyone is lining up behind manufacturers to give them the support they need. That should help overcome any anxieties they may have.“
Ralph Edwards: “I agree that there are some really good reasons to be positive at the moment. Products with a ‘made in UK’ badge rightly have a global reputation for quality, which gives British businesses a good start.
“It’s now about exploring the potential to diversify your markets, de-risking your business and improving your profitability.”
To find out more about the Lloyds Bank International Trade Portal visit https://www.lloydsbanktrade.com/
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