A Retiring Glance At Trade – Past, Present And Future
As my tenure at UK Trade & Investment draws to a close, it’s time for a little reflection…
12 September 2011
This is Derbyshire
There are both pros and cons about being an island.
On the plus side, historically it has helped to keep marauding invaders at bay – although admittedly that has not stopped the Germans from recently plucking a rather large rail contract from under the nose of Derby train-maker Bombardier.
On the downside, when it comes to selling our wares, some British companies could be accused of only thinking of solutions within our borders.
When the UK market falls flat, some firms do not consider trying to export their way out of the downturn.
Then there are others who see the world as one large market place.
For a company that has always seen the UK as its sole market, turning its hand to exporting can seem pretty daunting.
But there are those that have done so – and succeeded.
Figures recently released by Derbyshire and Nottinghamshire Chamber show that firms in the county are exporting goods and services worth millions of pounds a month.
In July alone, more than £40 million of exports were achieved.
And since the start of the year more than £150 million worth of British products and know-how has been sold overseas.
It is interesting to see where the bulk of the county's exports go.
The Middle East, the Gulf states, China and Russia head the list.
Getting a foot in the international door is by no means easy. It takes time, effort and, initially, money.
But according to UK Trade and Investment, the government-backed body responsible for encouraging British firms to export, the returns can be well worth it.
In the past, it has helped numerous Derbyshire companies get a foothold in foreign markets.
Among the success stories is AceCade Software, which is based at the Wyvern Business Park.
The firm provides structural steel software design, which is used to help construct a range of different buildings, from power stations to stadia.
As well as its Derby site, the firm has established offices in Australia, France, Italy, the Middle East, South Africa, Peru, Spain, America, India, Malaysia, China and Mexico.
While the market in the UK has remained sluggish, AceCad has been successful in winning work abroad, with South Africa, America, Australia, China and the Middle East all proving fruitful.
Some of the stadia which will be used for the forthcoming Rugby World Cup in New Zealand have been constructed with the help of AceCad.
Another of Derby's exporting success stories is Team Telecom Group, which has been nominated in the Achievement in International Business category in this year's Derbyshire's Best Business Awards at the end of the month.
The radio communications firm, in Uttoxeter Old Road, has increased its exports, particularly to Australia, which accounts for 30% of its business.
Last year, the company had a turnover of £46 million – 51% of which was made up from overseas business.
Chief executive Mike Norfield said: "There are a few golden rules before you start exporting.
"Market intelligence is key. You need to find out first of all if there is a market for your product, who are the competition and how much are they selling it for?
"The next step is to get some good export advice and get out there so you can understand the market first hand.
"Some of the things you see will surprise you.
"For example in China, you would have thought they would be driving around in Chinese cars. But they're all in Audis. They want cars from Europe.
"Find out whether you need to sell through dealers or direct to market.
"In order to get a proper foothold in a country, you should consider setting up an office there, employing local people who know the culture and how people in that country like to do business.
"It takes time and money to begin with. Only then will you reap the rewards."
Another Derby firm making a big noise overseas is clock and architectural features manufacturer Smith of Derby.
Earlier this year, it launched the world's most exclusive Islamic prayer clock at an exhibition in the Middle East, where the firm has been doing business for the last 40 years.
The clock has been designed as a focal point for the interiors of mosques and other prestigious buildings, as well as "homes of distinction".
Kevin Lichfield, from Smith of Derby, said: "We've been on two UKTI trips to the Middle East.
"The first laid the foundations and the second saw us make around 150 contacts.
"We've also held exhibitions in Dubai and Abu Dhabi and they were both very successful.
"We're focusing on interior design-led features – things that you see when you walk into a building that have the 'wow' factor.
"Before you start exporting, there are a number of things you have to consider.
"First of all, you've got to have a pedigree.
"You've got to have been in business for a few years and be able to show what you've done in the past.
"Understanding the culture is also very important.
"In the Gulf, they like to do business in a traditional way.
"They will find you on the internet but they wont buy from you through the internet. You've got to go there in person. I fly out to the region every month. It's all about building up trust.
"You've got to put in the hours and you've got to show your face."
According to the latest research by Castle Donington accountants and business advisers PwC, exporting is becoming a "no-brainer" for Derbyshire companies.
In a report called Economic Views (Global) it forecast that the economies of Brazil, Russia, India and China will account for 40% of the world GDP growth this year and the next.
This is up on just 17% in 2010.
Meanwhile, back in Blighty, the Bank of England has cut its growth forecast to just 1.5% for this year.
Phil Harrold, partner and overseas investment expert at PwC, said: "With economic growth forecasts soaring away in those economies and UK growth forecasts coming down, it is becoming a no-brainer for more local businesses to focus on increasing their export activity.
"There will be some companies that are considering exporting their products and services to countries like China and India for the first time, as the prospects for boosting sales in the domestic market and in more traditional export markets like Ireland and the US dry up.
"Such a move to increase exports is not necessarily too late and the main message to local businesses is that there is little to lose and plenty to gain by acting now."
The key for any successful business is to have products and skills that the world wants.
And Phil believes that, with its make-up of top end engineering companies, Derbyshire is well placed to deliver on both.
He said: "In terms of the sectors most likely to export well, the high-end engineering sector is particularly well-placed, as is the construction and infrastructure design sector and other design-based companies that see an opportunity to market their products to the growing number of fashion-conscious, newly-rich consumers in China, Japan and India."
To find out more about the help that is available to exporters, go to the website www.ukti.gov.uk/export.html?guid=none