Belfast Telegraph

X-port factor's a winner

The CBI is urging the government to 'reorientate' the UK economy towards exports which it believes could add another £20bn to the bottom line. Jenny Burnside finds out how Northern Ireland is faring when it comes to selling to overseas markets

As the knock-on effect of pressures in the eurozone filters down into the economy, the overseas trade that many have lauded as the answer to domestic economic problems looks increasingly uncertain, and Northern Ireland is not immune.

“With only modest growth projected across the euro area our exports are likely to be affected by muted domestic demand for our goods and services within the eurozone,” says Dr Vicky Kell, director of trade at Invest Northern Ireland (NI).

Although NI has typically been defined as a ‘small open economy’, Bank of Ireland chief economist Alan Bridle explains that the reality is somewhat different and slightly more complex.

‘Exports’ account for only about 20% of the region's gross value added (GVA).

While this rises to circa 45% when the broader measure of ‘external sales’ is used, the comparative figure for exports/GDP in the Republic is close to 100%,” says Mr Bridle.

To bolster the figures, Dr Kell’s team have been organising trade missions and attending trade exhibitions to fuel interest in NI’s goods and services. Invest NI have focused on high-growth emerging markets with the missions providing companies with direct access to key decision makers — cutting straight to the deal-makers.

In addition to the BRIC economies (Brazil, Russia, India and China), the team have visited the Baltics, Hungary, Kurdistan, the Nordics, Slovenia, the United Arab Emirates, Saudi Arabia, South Africa and Turkey with companies from various sectors such as construction, electronics, life sciences and renewables.

One renewables success story is Belfast’s Harland & Wolff. “Since entering the market in 2004, nearly 80% of our turnover is now in offshore renewable energy,” says sales manager David McVeigh. Its sales markets are outside NI, mainly the UK and Europe, with some exports to the Middle and Far East.

If the renewables sector is to succeed in the long term it has to cut costs for the consumer. It does, however, have a trump card. “We can all appreciate the potential for this industry over the next decade and beyond. The political will is there, security of supply is of national importance and with climate change the necessity is obvious,” adds Mr McVeigh.

Invest NI have more trade missions planned, including a trip to Singapore. While Dr Kell acknowledges that establishing how successful the trade visits are will require a long-term view, many companies have already won new business and others have indicated areas of potential and a desire to return to the markets for further promotion.

Dr Kell also points out that a number of local companies are exploring the emerging opportunities from Libya as it returns to normality, and are wishing to re-establish contacts that were made during the last Invest NI mission there in 2010.

Other companies are examining opportunities beginning to emerge from Pakistan, Australia and others parts of Asia Pacific.

There are many diverse success stories that result from these missions. They include Boomer Industries, Lisburn; Greenfields, Belfast; Bubble NI, Belfast; and Rapid International, Tandragee, while have all recently secured substantial business in Saudi Arabia. Henning Brothers in Kilkeel has won its first export business in Europe for frozen crab products. Belfast-based Simple Steps has announced winning contracts for business in Portugal for pioneering multimedia technology.

BRC Partnership in Carrickfergus has announced a joint venture to provide management training and coaching in Sri Lanka, following an Invest NI trade mission to India and Sri Lanka.

And Belfast-based Action Renewables secured a contract in Azerbaijan to develop an energy strategy without oil, following the company’s participation in an Invest NI organised visit to a UN agency in Vienna. Quite a list, and these are only a few of the examples Dr Kell cited.

He says that NI exporters can compete with the world’s best — and our personality travels well. And Ron Immink, founder of Small Business Can, agrees. Writing in the Belfast Telegraph last month, Mr Immink went even further, saying that he finds it a conundrum that more SMEs are not involved in exporting given the natural charm and sales patter of many of our business leaders.

Mr Immink’s Small Business Can does exactly what it says on the tin; it is an initiative to support small businesses and build their confidence and willingness to seek and engage in overseas trade.

Mr Bridle believes that the much-changed circumstances and constraints on domestic spending have now turned what was an option for some companies into an imperative. He foresees many companies, having to go in search of more markets to do business with in coming months.

To encourage this, Small Business Can hosted a range of panels around NI last month, designed to facilitate direct conversations between small businesses who had successfully branched out into new export markets and would-be exporters.

No speeches, academics or lectures. Just the opportunity to hear directly from people about how they had dealt with selling abroad, how they tackled challenges such as distribution and their relationships with stakeholders spread across the world.

There is great potential and opportunity for the expansion of NI’s narrow export base, says Mr Bridle. “Our scale means that capturing a fraction of a percent of a large market can benefit the local economy to the tune of tens of millions of pounds — but it will not be easy in the near-term to achieve traction.”

While support programmes are in place and risks can be managed and mitigated, Mr Bridle highlights a key policy dilemma for Arlene Foster’s Department of Enterprise and Invest NI to get to grips with.

“Do they prioritise increasingly limited resources to support a relatively small number of larger companies who are already doing it, with some success, to push further and deeper into the so-called ‘deep blue water’ markets of Asia, Latin America and Russia; or to assist smaller companies taking their first tentative steps?”

As Mr Bridle says, the answer is invariably a compromise. He, however, argues that export focus should not overlook what is on our doorstep. Concentration should be placed on overall “external” sales in total, rather than on the more purist “export” sales.

“Despite the weak recovery, the Great Britain market and over 60 million population on our doorstep still presents significant growth headroom for local businesses and SMEs in particular, easily accessible and without currency and language barriers.”

With wide spread agreement of the strategic imperative to export generally accepted, and the support of Invest NI, DETI and Small Business Can, business owners can seize these support mechanisms and forge ahead.

In the meantime, the world waits with bated breath for the outcome of eurozone and global economic developments, in the hope that the high-growth emerging markets are not affected by the same contagion stifling our own growth forecasts at home.

Belfast Telegraph