44 roundtable: manufacturing & engineering ... continued from previous page


“Right now, that ‘UK-made’ status doesn’t seem to exist strongly in our furniture markets. But, if you can do it in handbags, cars and fashion then maybe someone needs to plough a lone UK furrow for furniture. It might as well be us, and if we make it work there will be a very good story to write.”


Garratt accepted it might take several years to achieve, but highlighted how Italian and German manufacturers were already using a similar export strategy and making huge inroads internationally.


the British Grand Prix. “But, it can be somewhat fragmented and part of our ask of government has been for dedicated local resource so we can provide the whole lifecycle of support. UKTI’s offering is not bespoke and more flexibility would enable LEP moulding to make support more applicable to local business requirements.”


Garratt: “My message to government would be that export is a long-game and SMEs will need more support to make it stick.”


Can we bring manufacturing home?


Needham emphasised that UKTI was the primary government support for businesses wanting to grow internationally, but MAS did involve itself in ‘re-shoring and new-shoring’ projects where companies were aiming to bring their manufacturing back from foreign locations.


Are you getting the credit for your R&D?


Murray expressed surprise that the MHA Report had revealed a high percentage of businesses (86%) aiming to invest in R&D this year, yet almost 20% being unaware of R&D tax credits, and 56% not intending to claim back money on their R&D investment.


Tax specialist King shook his head in perplexed agreement: “R&D credits have been around 12 years and we are still finding people who haven’t heard of them. And, a lot of those who have heard, seem to have decided it is too complicated, or they won’t get it. Yet, there’s a huge opportunity to claim and it can be a very valuable tax relief, more than doubling your tax deductions for relevant costs, so it’s worth having.”


“We fully understand that not every


business can 100% manufacture its products in the UK, however many elements can now be made here at a competitive rate once the ‘total acquisition cost’ is taken into account.


For example, high-precision engineering has increased in quality and reduced lead times in recent years, whilst charge-out rates have often remained static.


Richard Harrington


Well done UKTI, but are businesses helped enough?


Needham said the Government’s UKTI service was providing valuable support to UK businesses looking to trade overseas, with its market reports and on-the-ground activities.


UKTI had involved Meechan’s company in trade missions to China, India and Mexico. “I say ‘Ra-Ra’ for UKTI. They are magnificent for setting up good ‘fishing for business’ in these emerging markets. They organise your visits, normally linked to a trade show, vet the people you meet. You almost get the Ferrero Rocher moment with the ambassador. It is all very well done, and you get more work.”


Garratt was equally praiseworthy of UKTI and also support from MAS in honing manufacturing efficiency. But, he emphasised that while UKTI could provide a good start internationally, businesses had to be prepared to think long- term and put in their own research and effort. “The export strategy is a very long game-plan – getting out there, establishing your name, product mix, logistics, selling infrastructure and marketing. We understand what we need to do, and see our export progress as year-on-year incremental growth.”


He mentioned UKTI’s successful Passport to Export and Gateway to Global Growth programmes, but suggested a third was required. “Unfortunately, once you have gone down those well-trodden paths, you probably still need your hand held a little.”


Harrington: “When it works, UKTI support works very well.” He highlighted UKTI activities linked to


www.businessmag.co.uk


Meechan: “We actually set it up in China, so we have never had volume manufacturing in the UK. I’d like to switch on the UK high-precision computer numerically controlled (CNC) machining industry to our product, but I haven’t yet completely figured out how to do that.


“It’s absolutely astonishing how little advertising and brand-pushing goes on here, yet our manufacturers make some fantastic stuff.” He exampled one excellent UK company he had recently discovered. “This is a world supplier of leading breathing apparatus precision machined parts and yet I had to dig very deep to find that they operate just 35 miles from my business. There’s just not enough ‘We are world- class’ promotion going on in the Thames Valley.”


Needham responded by explaining that MAS is increasingly looking at helping UK manufacturers develop their supply chains.


Garratt: “We have had to be pragmatic, smarter throughout our business operations, and that includes not manufacturing exclusively within the UK. Our business model has gone towards outsourcing and off-shoring in the past 10 years, and without this mixed business model we probably would not have survived.”


At the top end of the furniture market, Ercol was now leveraging its established trading reputation, its ‘Made in Britain’ heritage, product branding, proven design and quality standards, and this was producing valuable returns.


Harrington mentioned that the LEP’s growth hub Bucks Business First is holding a ‘Bringing Manufacturing Back to Britain’ morning seminar on reshoring on September 18 at Clare Charity Centre, Saunderton (www.bbf.uk.com/news- hub/events/view/)


Nick Jones


. . . or frustrated by the paperwork?


Meechan said his company was aware of the tax and grant benefits available, but complained about the paperwork involved – both information sent advising about different grants and reliefs, and multi-paged application forms. “You can get money from the Government for quite a few things, but you just have to fill the paperwork in, and that can take some doing.”


Needham stressed that form-filling did not have to be onerous. The vast majority of MAS applications for assistance are straightforward, with grant forms typically just five sections and most of these can be completed by the adviser. Additionally they also look for any other funding routes to help.


THE BUSINESS MAGAZINE – THAMES VALLEY – SEPTEMBER 2014


With the Government currently aiming for manufacturing growth “…now is a very good time for R&D and currently it seems easier to get approval for an R&D claim than it was say a few years ago*. I would encourage anyone interested in R&D investment or with innovation in their business – it doesn’t have to be groundbreaking – to have a fresh look at R&D credits.” (* The MHA Report revealed no unsuccessful applicants among its respondents).


Needham agreed that some businesses may have ruled out R&D tax credits and the Patent Box benefits too early, probably a decision made several years ago based on knowledge at that time. Always worth revisiting now.


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