Northern Ireland must spread its business wings and start exporting globally to boost its economy, and Invest NI is on hand to help firms branch out, writes Jenny Burnside
With the economy stuttering at home and in dire straits in the United States and the eurozone, are there ways in which we can seek to bolster Northern Ireland's balance sheet by exporting our produce further afield? Although the financial crisis has been a global one, parts of Asia and the Bric economies — Brazil, Russia, India and China — are, relative to their Western counterparts, growing rapidly.
Just a few weeks ago, Invest NI hosted a series of free seminars for local companies providing direct access to trade experts based in new and established export markets. Speaking at the time, Enterprise Minister Arlene Foster emphasised the importance of looking outside of the traditional export markets of the Republic and Great Britain, saying, “there are many new rapidly growing markets which offer significant opportunities to Northern Ireland businesses across a range of industry sectors, from life sciences and professional services, to construction and manufacturing”.
“These countries include Brazil, Russia, India and China, which have growth rates predicted at 4%, 5%, 8% and 10% respectively this year, far outstripping growth rates in established economies,” said the minister. In 2009/10, exports to the rest of the world were worth £2.7 billion, up £17 million, 0.7%, on the previous year. However, as revealed in the last Northern Ireland Manufacturing Sales and Exports survey, this rate of growth was much lower than the previous year, down sharply from 2008/09’s £192 million, 7.9%, reflecting the broader global economic environment.
Yet although export growth has slowed, in 2010, almost 200 Northern Ireland businesses took their first venture into markets outside Northern Ireland, while almost 600 existing exporters diversified into new markets. A lot of these businesses have already reported winning firm orders.
Tracey Newman, director of customer services at locally owned freight forwarder Hamilton Shipping, said: “Many of our customers have responded very positively to the local challenges by exploring opportunities in Asia, the Middle East, Russia and South America. More and more we are being asked to advise and assist small and medium-sized exporters to tackle the documentary and logistical requirements these new and emerging markets require.”
In addition to providing workshops, Invest NI work hard to develop international business relationships across countries which are culturally diverse.
Dr Vicky Kell, Director of Trade at Invest NI, explained that as well as the Bric markets, Invest NI has also focused its resources on assisting construction and building companies to develop business in regions with substantial amounts of infrastructure, such as Saudi Arabia.
Dr Kell said: “Northern Ireland companies have been assisted by relationships that we have fostered in Saudi Arabia with major contractors such as Saudi Binladin Group and Emaar. This approach has benefited both large companies, such as Terex Finlay, Omagh, and smaller businesses including SRS, Ballygawley. Other companies benefiting from our focus on Saudi Arabia include Ulster Carpets in Craigavon and CEM Systems, Belfast.”
Hamilton Shipping has also observed new players in Northern Ireland emerging from outside the confines of the traditional exporting sectors such as construction and manufacturing. “While our traditional and long-established exporters continue to do well overseas, we have seen new players emerge in the renewables, food and drink, and recycling sectors. The sense of entrepreneurship among local firms is flourishing as they seek new markets overseas in an attempt to defray the economic pressures being experienced closer to home,” said Ms Newman.
Yet, while it is only natural to look beyond the trouble-spots when the economic outlook at home is bleak, the export market is fraught with challenge. In particular, there will always be issues around the rate of exchange, and, more recently, supply and demand issues have been volatile, affecting transport costs across industries.
For the meat export market, many of the top companies of which dominate Northern Ireland’s list of top 50 exporters, it continues to deal with challenging legacy issues stemming from foot and mouth outbreaks. A staggering 75% of the beef and lamb produced in Northern Ireland is exported, the vast majority to Great Britain, with exports to Europe and the rest of the world now representing up to one third of sales.
Phelim O'Neill, of the Northern Ireland Meat Exports Association (NIMEA), said: “The overhang of the beef export ban for the decade between 1996 and 2006 is still with us. In 2006 we got back into EU member states but outside of the EU it has been a slow process with many lucrative markets still closed to us. However, some progress has been made in African and Asian countries, particularly over the past year, and we have noticed a growth in offal and by-products to these regions.”
Despite the numerous logistical, exchange rate and not to mention cultural factors involved in the export trade, it is crucial to growth and an economic recovery.
With our biggest exporting partners the Republic and the eurozone facing significant — perhaps unprecedented — challenges as a Greek default looms, it makes very good busi
ness sense for Northern Ireland to spread its trading risk more widely. Exploiting the opportunities and growth areas now afforded by working in an interconnected, globalised environment may prove to be a sound investment decision, and the tools and support provided by Invest NI and the Northern Ireland Government will be a valuable resource for those companies that make use of it.
Ms Forster reinforced the message for companies to seek opportunities from further afield to fuel growth at home, seeing it as key to Northern Ireland’s domestic growth: “Exporting is a prerequisite to business growth and it is well recognised that with a very small domestic market, those companies which only trade locally will find their growth restricted. As the global economic recovery continues, it is essential that companies look to new export markets to support growth.”