Widening your horizons

Posted on 3 Jun 2010 by The Manufacturer

With exports leading UK manufacturing’s revival, Mark Young considers the role of UK Trade & Investment in helping manufacturers taking advantage of opportunities abroad.

Countless caps have been doffed recently to manufacturing’s border-defying knights in shining armour. The low value of sterling might not be good for your summer jollies, but it is great for selling products overseas. Export opportunities are there for the taking, it seems.

Exchange rates aren’t the only thing that’s out there to help you export, though, and that’s good news because there’s a lot more you’ll need — especially if you don’t have a spare half a million pounds to wave under the Duchess of York’s nose.

There are also a raft of consultancy and support organisations to provide market analysis, strategy planning, cultural significance advice and networking.

Government’s UK Trade and Investment organisation (UKTI) is the largest. With over 1,300 advisers in more than 90 countries worldwide, it has a presence which covers 98% of global GDP and last year helped more than 23,000 companies across every sector of the economy in some aspect of international trade. For every one pound it spends, nineteen pounds are contributed to the UK economy, the organisation finds.

Its offerings cover a vast spread, both geographically and in services. Take its Passport to Export and Gateway for Global Growth programmes for starters. Delivered through UKTI’s regional teams, Passport is for new exporters while Gateway is for more experienced ones. Passport includes an International Business Review to assess capability to export; advice to help develop an export action plan; customised training; access to UKTI market research; and help in visiting potential markets. Matched funding of up to £1,500 is available.

Gateway, meanwhile, is for innovative companies with two to ten years exporting experience and seeks to engage companies with other specialist private and public sector providers, examples of which are noted below. It also includes training and has a specific focus on global value and supply chains.

A recent case study on the UKTI website tells the tale of one happy participant of the Passport programme. The organisation helped Truro-based tea maker Tregothnan Estate display its wares at the British Fair in Osaka, Japan, and meet with potential customers at the Embassy in Tokyo. As well as successfully finding stockists for its products, the company was then invited back to the Embassy to provide teas for the Queen’s Birthday celebrations.

“We have made some fantastic contacts and have some really exciting business opportunities about to take off,” says Tregothnan commercial director Jonathan Jones. “We simply couldn’t have achieved this without the face-to-face meetings that the UKTI market visit allowed us. There are so many openings in Japan and now we are well on the way to making a significant impact in the market.”

Show time
UKTI holds an array of events worldwide, including seminars, socials, conferences, courses and delegate trips. Brazil played host in October last year when more than 40 UK manufacturers, chaperoned by UKTI and British manufacturing heavyweights BAE Systems, JCB and Rolls-Royce, met with over 100 Brazilian firms to seek partnerships in advanced manufacturing ventures.

One Leicester-based polymer company, Nylacast, expects to gain £1m worth of business through companies that it established relationships with.

Next, over June 23-24 the organisation will host a showcase of UK Advanced Engineering capability in Shanghai at the same time as the Shanghai Expo 2010 Conference. Coinciding with this will be several business missions in the vain of the Brazil trip. One of these has been organised in partnership with the Society of Motor Manufacturers and Traders for the UK automotive supply chain to build relationships with Chinese car makers so that the former can provide the technology required for the latter’s shift towards electric vehicle production.

A recent UK Trade and Investment report highlighted extensive opportunities to this end. As well as pre-arranged meetings in Shenzhen and Shanghai through UKTI’s business matching service, companies will have a poster stand exhibit at a top Shanghai hotel to promote their expertise; will receive an invitation the UKTI VIP Gala networking; and will participate in interactive seminars covering key areas of UK expertise and cooperation.

In the UK, UKTI recently held an Achieving Your Goals in Africa conference at Wembley Stadium which saw over 250 firms that are established on the continent give advice to other companies that are looking to set up links there. In April, a Nordic & Baltic States Roadshow seminar took place at Haydock Park, St. Helens, where firms could explore opportunities and meet commercial directors from Denmark, Finland, Norway and more. UKTI will also be present at the MACH 2010 conference at the Birmingham NEC in early June where it will be arranging one-to-one meetings between UK and International delegates.

Other ways to roll?
UKTI’s work is generally regarded highly, though criticisms have been aimed at it. Many other organisations have taken up the challenge of aiding international exploits including trade associations, accountants, high street banks and private companies, and some contend that they are able to offer a more effective service given that they are not subject to administrative red tape.

Steve Parker now runs his own export consultancy – Steve Parker International Company Development – following a 20 year career in export director roles for manufacturers, specialising in the Middle East and Asia, followed by a five year stint as a senior international sales adviser for UKTI. Parker acts on behalf of companies, using the extensive contacts he has built up and the market idiosyncrasies he has learned to find customers, create sales and ensure the companies he looks after get paid afterwards. His niche, he says, is that he is able to truly get to grips with a company’s products and culture and can therefore act decisively on their behalf when he represents them. While UKTI has some very talented people that are capable of adding value to a business’ export proposition, the organisation is bound by bureaucracy and this inhibits its ability to fulfil this same vocation, he contends.

“UKTI has a slightly prescriptive idea about whether a business is capable of exporting. It’s based on a checklist scoring system like the banks use for loans,” he says. “This is fundamentally flawed because whether you can export or not simply comes down to the attitude you adopt.” Furthermore, says Parker, because the organisation has targets to fulfil in terms of the number of companies it helps and the budget it uses, whether or not a company is granted support could essentially be a lottery, depending on when the company applies.

Jamie Clements, spokesperson for UKTI, says Parker’s analogy is misleading. “UK Trade & Investment offers help that is appropriate to the company,” he said. “We do not use a bank loantype scoring system to decide which companies are eligible. Generally we will assess what we can do to help a company on a bespoke basis.” Parker says that the UKTI also has targets for the number of Overseas Market Introduction Service reports (OMIS) it has to sell to companies, costing from around £600 to £1,200, which consist of contact details compiled by foreign embassies. “Firstly, any company director can usually find this information themselves,” says Parker. “Secondly, if they are pushed for the time and want UKTI to compile the report, they’ll receive it two to three months after they request it and will still have to make contact, send out literature, develop the relationship and work out how they are going to get paid at the end of it.” He also says certain ‘heavy duty civil servants’ within the organisation lack the industry experience that would help them succeed.

“All the evidence from companies is that OMIS reports are valued by the companies that ask for them,” responded Clements. On its advisers, “UK Trade & Investment’s staff are drawn from the civil service but there are many who also have a background in the private sector,” he says. “UKTI also employs a network of private sector specialists who bring industry experience.”

Perfect TEN?
Paul Gilbert is director of the Export Network Limited (TEN), a member of the national council at the Institute of Export and a director of three companies in all. TEN’s service goes above and beyond finding customers and clinching sales, as valuable as that is.

The company can set up distribution links, including sourcing trucks and drivers abroad, and set up sales offices and even factories anywhere in the world, sourcing both blue and white collar workers to operate them.

He believes UKTI is a valuable resource but agrees with Parker that its organisational structure restricts it. “You could argue it’s unfair that UKTI is heavily subsidised with government money while competing with companies in the private sector but, that aside, it does a good job. They have expanded into being more than just a network – instead of just supplying reports they’ll actively seek and arrange meetings and will go along.

“However, as a government organisation, they can’t risk doing anything which could go wrong and which they could subsequently be found at fault for.

We will because we’re confident of getting it right.” Jamie Clements says: “Staff abroad will lobby for UK companies and will do so to the best of their ability. Deals can benefit from high-level support but ultimately whether a business deal is concluded or not will be decided between the two parties.”

Ultimately, As Paul Gilbert points out, the organisation or service that’s best – public or private – depends entirely on the individual company’s needs. With major trade organisations including EEF, the Confederation of British Industry and the Food & Drink Federation united in endorsing exports as our best route to post-recession prosperity, it can only be a good thing that there’s a wealth of organisations with varied service offerings and differing expertise ready to steer manufacturers in the right direction. And – with a plethora of statistics from these same usual suspects already pointing to a marked rise in UK goods leaving for foreign shores – public, private or both, at least someone seems to be getting it right.