Member Article

Rich new seam of potential North East exporters to bolster regional economy

A new wave of up to 1,000 exporters has the potential to trade successfully overseas and boost the North East’s growing export market, a major new report reveals.

Significant opportunities exist for small and medium-sized firms in the design, creative and digital sectors as well as engineering and technical services, report authors RTC North found in one of the largest surveys of North East exporting ever undertaken.

RTC North – headquartered in Sunderland – provides professional services in technology, innovation and business growth and delivers UK Trade and Investment services in the region along with the North East Process Industry Cluster and North East Chamber of Commerce

Based on the survey findings, the report estimates that between 800 and 1,000 North East firms that do not currently export have a realistic capability to do so.

The challenge now is for support specialists to reach these firms, tell them of the benefits of expanding their customer base outside the UK and tailor advice to meet their individual needs.

More than 600 SMEs responded to RTC North’s ‘What Industry Wants’ international trade research survey compiled in conjunction with Newcastle University Business School. A total of 400 companies surveyed are current exporters and 213 are not trading overseas, with 76% of the surveyed businesses employing less than 50 people.

The survey provided an objective study of export behaviour and current trade performance among smaller businesses in the North East.

Gordon Ollivere MBE, CEO of RTC North, said: “One of the objectives of this study was to estimate the current number of North East SMEs with realistic and short term export potential – and that figure is likely to be between 800 and 1,000 companies.

“The challenge we have taken up now at RTC North as a result of this survey is to work with these firms thinking about exporting, to use our extensive skills and networks to convince companies of the benefits of trading overseas and help them take the first steps to access the huge number of opportunities that these markets offer.”

The report’s other key findings are:

More than 88% of existing exporters intend to expand overseas trade in the next five years

The average contribution of exports to company turnover was 38%

Forty-four firms who were not exporting had previously done so and a further 88 had looked into it

Non-exporting firms cited lack of management time as the largest obstacle to trading overseas and feared exporting could adversely impact their UK business

Europe was the single most important trading block for exporting companies, with the United States the single most important nation accounting for nearly half of trading outside Europe

Companies predict by 2020 that trade with Brazil, India and Russia will increase dramatically.

The survey revealed a high level of satisfaction with UKTI export services but exporters expressed demand for more specialised ‘in country’ support and for joint ventures

Geoff Turnbull, Chairman of GT Group, the Peterlee-based engineering and environmental product development firm, said: “As chairman of a group of high tech companies that has enjoyed rapid growth in recent years, I have seen the positive effects of export success.

“This is not just in terms of business growth but also in the way that it has stimulated internal innovation, investment in R&D, manufacturing and quality.”

The North East will need to create around 500 new exporters and earn an estimated £20bn from these exports if it is to help the Government achieve its target of doubling the value of UK exports to one trillion pounds by 2020.

Rob Nirsimloo, Chief Executive of Hexham-based Multichem, is a highly experienced exporter, supplying inks to more than 30 countries, exporting over 99% of the inks they make in Northumberland. He worked closely with RTC North to establish a manufacturing base in Shanghai to service their Chinese marketplace.

He recognises the importance of specialist support to access far-flung marketplaces. “Instead of spending one to two years finding premises and equipping them, we were able to take a shortcut through all that with RTC North’s support.

“We travelled quite extensively through China, looking at various locations to meet up with local partners, lawyers and entrepreneurs. They had done all that before and were highly experienced in setting up new enterprises in China and helping businesses navigate through the extensive red tape.”

For more information on RTC North’s North East export support services visit http://www.rtcnorth.co.uk/services/business/international_growth.asp

This was posted in Bdaily's Members' News section by Gordon Arnott .