roundtable
BPC Energy exports around half its power protection products, mainly to the Middle East and Africa. Malcolm Henley said: “A large majority of our projects and contracts have slowed down. I think that’s probably due to negative thinking or a lack of understanding about what is going to happen about Brexit. As a UK exporter we are also caught up in a world economy suffering from the low price of oil.”
TW Metals is a specialty metals distributor and processor that runs nine subsidiary companies around the world with about 80% of its products exported from the UK. Gail Thomas commented: “We are seeing a change in what are considered low-cost countries, or more rightly best cost countries for manufacturing. Previously the focus was on China, India and southern Asia; now we note that Morocco, Turkey, and some eastern European countries such as Romania and Serbia are emerging.”
Griffon Hoverwork exports most of its hovercraft and marine product to 42 countries. Adrian Went was concerned about technology transfer. “Increasingly winning overseas contracts requires some manufacturing to take place in that country. Although that country’s labour costs may be a lot lower than in the UK, they need more people to carry out the work because they are less experienced and so, surprisingly, our manufacturing costs are lower. However there is a political drive to move the jobs into the customer country.”
Sterling efforts
The value of sterling as an inhibitor to international trade was discussed. HiFX carries out transactions for around 7,000 businesses in nearly 150 currencies. Chris Towner believed this made the company a fairly good barometer about sentiment on sterling. He said: “We use a broad range of currencies, with about 80% in euros and the US dollar. But we are seeing increasing demand for emerging market currencies. People are looking more broadly and calling us about currencies they haven’t looked at before.
“Foreign exchange activity is down this year compared to last year. People are being more defensive and cautious, especially where sterling is trading at, and thinking it will perhaps get better in six or 12 months.”
Is the Government supportive enough?
Went: “A number of national governments are willing to weigh into the thick of it to promote their exports. We experienced this with the US Government’s support of a defence sales bid in South America. Although we won the contract, the UK Government didn’t get involved on our behalf. They tend to say it is a commercial thing.”
Sunderland: “We sit in the middle of the supply chain, helping importers and exporters to grow their businesses. There are a lot of opportunities for companies, but they have to look at the right areas. One challenge is knowing where to get the information they need. The UK Government says it provides £1.9 billion to support exports into new markets, but companies don’t know where to find this help.”
Henley: “There is a lack of export incentives and support. We go to exhibitions independently and see other companies with stands paid for by their governments.”
Went: “I’d like to see trade missions, government departments and the Foreign Office allowed to be more partial. Other countries are completely partisan about their businesses.”
Thomas: “The Government could do more to make it easier setting up a company overseas. The cost can be prohibitive, but would reduce if we could send out UK staff and pay them from the UK until the venture became profitable.”
Went: “It can be a tough choice for the Government to decide which countries to send powerful trade mission teams. I think the Government has made some good calls in this respect by selecting good locations.”
Don’t bank on it
It appeared that financial challenges to exporting and operating overseas weren’t always being helped by the UK’s financial services sector.
Continued overleaf ... THE BUSINESS MAGAZINE – NOVEMBER 2017
businessmag.co.uk 61 Malcolm Henley Gail Thomas
Chris Towner
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