Speaking at last month’s EEF National Manufacturing Conference, opposition leader Ed Miliband declared, ‘We don’t celebrate manufacturing enough in Britain.’ In an attempt to redress this, the annual conference saw a host of delegates from different manufacturing businesses all over the UK descend on London, hoping to recognise successes, tackle burning issues and foster a can-do attitude, particularly when it comes to exporting.
The UK is the ninth-largest manufacturer in the world. For all the fuss about financial services, manufacturing accounts for almost half (46 per cent) of UK exports. Total sales to emerging markets have grown 34 per cent from 2006 to 2011. It’s little wonder that more UK manufacturers – small, medium, and large – are attempting to break into new markets. But another theme coming out of the conference was the importance of having a strategy and knowing how to tap into export funding, advice and guidance.
As a government body, UK Trade & Investment (UKTI) aims to support the expansion of British manufacturers overseas. It does this through its international advisers, funding programmes and offerings such as its Overseas Market Introduction Service (OMIS), which provides help such as initial research and arranged market visits.
Businesses have praised the help that UKTI can offer and advise other firms thinking of exporting not to ignore it as a point of call. One manufacturer that made use of OMIS was Poole-based TDSi. Managing director John Davies comments, ‘We went to a trade event in Vietnam, and before we went we commissioned an OMIS report, which was hugely rewarding and cost-effective. It cost £1,500 and before I even left the UK I had 12 appointments set up with potential partners, three of which we are now doing business with.’
But Craig Naylor, MD of tool engineers NTR, warns, ‘UKTI is not bad at all as someone to go to, but companies must be aware that they have to do the hard graft themselves.’
Hard graft is certainly inescapable when it comes to building an export business, but the rewards can be well worth it. In the following pages, six different manufacturers explain how they have exploited and built on lucrative overseas opportunities.
Arnab Dutt, managing director, Texane
Leicestershire-based Texane, which manufactures travelator and escalator wheels, exports between 25 and 30 per cent of its products to France, Germany, the United States and Australia. After finding success abroad, the company is now confident about tackling emerging markets such as the Middle East.
Managing director Arnab Dutt insists that Texane’s overseas growth is rooted in its operations in the UK: ‘To win business in a new foreign market you must have a solid track record in your country – we did. Our success at home is our biggest asset.’
The firm boasts clients such as the French transport system, the Paris Metro and the Washington Metro in the USA. Dutt acknowledges that none of these contracts would have been possible had Texane not built a strong reputation working with the London Underground. ‘Our strong relationship with London Underground enables us to say to people, “We are not a cheap product – we are proven.”’
Revealing that Texane has spent 15 years developing its product, Dutt warns that companies should not even consider entering new markets until they have a solid business on home soil and a ‘damn good product’. Once you’re in that position, ‘Your product has already proven itself and you have all the answers to questions that could arise from buyers.’
John Davies, managing director, TDSi
Since John Davies took over security systems manufacturer TDSi seven years ago, he has doubled its exports from 25 to 50 per cent of turnover. ‘It’s been about taking more of an interest in markets that the company was already involved in, but didn’t really know about the culture,’ he explains.
For example, TDSi began to translate its software into foreign languages, launching a Chinese version six years ago and then one in Arabic four years later. ‘It really helps us to get ahead because it shows people that we are interested in their market and their culture. They very much appreciate that,’ says Davies.
The company took its time over the translations, spending two years working on the Arabic product. ‘We looked around at who was best to work with and get it done correctly,’ Davies notes. ‘We settled on a translation agency in Cairo but then used our resellers in the Middle East to re-check and make sure that all the technical terms made sense in the language.’
Davies hasn’t stopped at translating the software, however. He notes that, increasingly, his clients expect phone support in their native language. As a result, TDSi has had an office in Paris for 13 years and is about to set one up in China, which will also spearhead marketing efforts in the country.
Martin Ruda, managing director, Tall Group
Over the past five years, the three manufacturing companies that make up Tall Group have stepped up their global game. ‘Exports have grown between 25 and 30 per cent in the past five years,’ remarks Martin Ruda.
Security Print, Checkprint and ID Data, which boast annual sales of £10 million between them, specialise in secure payment tools, both paper-based and digital. Ruda attributes the group’s rising export success to its identification of markets where alternative manufacturing facilities are not readily available locally.
‘We have made a deliberate effort to target those markets,’ he comments. ‘Our focus is on countries where local manufacturing is weak or non-existent.
‘That includes certain emerging markets, where you also find that the reputation of British manufacturing is very strong.’
Among the developing regions where Tall Group has recently found favour is Africa. It shipped two million bank cards to the continent during the second half of last year.
‘Both western and eastern Africa are very interesting to us,’ says Ruda. ‘Many of the emerging democracies there work closely with the United Nations (UN) and its development programme, so we make sure we work very hard building a relationship with the UN.’
Craig Naylor, managing director, NTR
Tooling engineer NTR has more experience in foreign trade than many, having served overseas clients for around 25 years.
Naylor, whose father and grandfather ran the company before him, believes staying close to your partners or resellers overseas is the key to successful growth in foreign markets. He remarks, ‘Once you have established the trust and relationships and keep on top of them, I won’t say it’s easy, but it helps you succeed.’
The Yorkshire-based firm aims to target a new export market every 12 to 18 months, and currently 40 per cent of what it sells goes abroad. Naylor says NTR has worked hard and invested heavily in striking up the right partnerships overseas. ‘Take Italy, a market that has been very good for us,’ he explains. ‘Because of the nature of the Italians and the way they do business, we invested in employing an Italian in the UK. So all the dialogue takes place in Italian and the account is managed that way, and as a result we have seen a great return.’
When looking for an overseas partner or reseller, Naylor cautions businesses to be clear about the sort of partner they want. ‘It’s all about staying close to understand them and their motives,’ he advises. ‘Treat them as you would your own sales force or business. They need to be feeding you back information and you need to stay on top of what they are giving you.’
John Lines, director, Hill Engineering
Innovation has been the key to international growth for Northern Ireland-based Hill Engineering. The construction equipment maker launched its Tefra product, a safer coupling device for excavators, in January 2011, and within a year the company’s exports are up from 11 to 25 per cent of turnover.
‘We are working with construction equipment distributors and users,’ explains John Lines, who adds that Tefra was launched following changes in legislation that meant ‘we had to look very hard at our product offering’.
Lines says the product represented a total revamping of the company’s existing offering, but timing was of the essence in capturing the opportunity. ‘We’re now able to demonstrate a market-leading product that is fully compliant with legislation that is soon to come into play. A product like this at the exact right time has helped us to establish ourselves in new markets.’
The company has won contracts in France and the United States and is currently in talks with distributors in Poland and India. Lines comments, ‘Of course, being in the industry we are in, our aim is to look at markets where construction is really happening and major work is going on. Therefore, many established markets and places like Poland are our potential growth markets.’
Grant Notman, director, Wood & Douglas
Wireless technology for utility companies, emergency services and homeland security is the business of Wood & Douglas, which generates more than half its sales overseas.
‘It is all about knowing who and what to target,’ says director Grant Notman. ‘We go and find companies that need or could use wireless radio in their products. For this reason, it is usually the manufacturers we go to directly. We find a part of their service that is weak and approach them to show how we could help.’
The business has a significant contract in China and has defended this against growing local competition. Notman again attributes this to the company’s careful targeting of clients that are more likely to stay loyal. ‘Companies making radios in China – there’s an awful lot of them,’ he observes. ‘But our experience is that if a Chinese company has all of its parts coming from China, you will lose them. If some of its parts are coming from outside China, you have a better chance of keeping them as they will be more open to your product.’
He believes that firms do not need to travel the world, spending lots of money looking for contracts. Instead, detailed research is the key, along with proper preparation before a pitch. ‘Trade shows are a great way to position yourself to meet a variety of companies from different countries,’ adds Notman.