Exporting our way out of recession

Philip Gilliland at the restored Artillary Chambers building.  (0604JB42)
Philip Gilliland at the restored Artillary Chambers building. (0604JB42)

Exporting has never been more important to our businesses. Despite what we all hope – and are determined – will be a great City of Culture 2013, the harsh reality is that our economy is smaller now than it was in 2007. And that truth applies in Northern Ireland, the Republic and the UK.

The Chamber of Commerce in Derry has helped to set up a North West Exporter’s Club. Chamber Vice President Philip Gilliland says the hard lessons already learned by local exporters can help others gain a foothold in new markets.

Exporting has never been more important to our businesses. Despite what we all hope – and are determined – will be a great City of Culture 2013, the harsh reality is that our economy is smaller now than it was in 2007. And that truth applies in Northern Ireland, the Republic and the UK.

It may be several years, or even decades, before our economy recovers. Yet while our economy is now smaller than it was, other countries’ economic growth continues. Yes, China is no longer growing at 13% a year, but it is still growing at over 7% a year. Most businesses in Derry would happily accept that!

But it is all very well aspiring to export to China, India, Brazil, Turkey and the other countries showing high rates of growth. How can this hope be turned into reality? This is where the Londonderry Chamber of Commerce will provide practical support.

The Chamber in association with the Northern Bank – about to become Danske Bank – has formed the North West Exporters’ Club, which is already passing on the lessons hard learnt by those of us who have travelled to fast growth countries and are determined to increase our level of trade there.

It is very appropriate that we are doing this in partnership with one of Europe’s largest banks, as international trade finance is one of the key ingredients to doing business abroad. Redmond McFadden, head of the Northern Bank/Danske Bank Derry-Londonderry Business Centre, said that it shares our Chamber’s commitment to supporting local companies grow through export.

“With companies having to focus more on reviewing and optimising their finances, it has never been more important for them to avail of the expertise of their bank,” said Redmond. “Working closely in partnership with our customers, we are committed to helping local businesses in the North West rise to the challenges that lie ahead, steering Northern Ireland back on the road to sustainable economic recovery.”

One of our first exporters’ clubs was addressed by Philip O’Doherty, managing director of E&I Engineering, and by George Fleming, managing director of Fleming Agri-Products Ltd. These are two of the most successful local exporting businesses and both are members of the Chamber.

The advice from the two experienced exporters is that companies should look to increasing sales in near markets before embarking upon exporting, recognising that exporting is hard work and not for everyone. Any exporting business – indeed, any business – should constantly ask itself why customers should buy its goods or services and what its commercial advantage is. Are its products better than the competitors’, or is its knowledge better? Is it cheaper? Can it meet delivery dates more reliably?

Potential exporters should keep their ambitions under control. They should have a clear idea about which markets they want to enter, limit the number of these and research them in detail over the internet and by using the Invest NI library. It may be necessary to modify products to target other countries’ markets – Invest NI’s grant support for research and development can be very helpful in adding value to products sold domestically.

Exporters should make maximum use of Invest NI resources in target countries. Trade shows and trade missions are good, but consultants rarely justify their fees. Different branding may be required in different markets. Remember, too, that intellectual property is easier to protect in some countries than others.

A joint venture with another company is worth considering, for example to share marketing costs. Other advice included accepting that it is easier to trade in countries where English is widely spoken; to recognise cultural differences; and to choose agents and distributors with care, as it can be difficult and expensive to get out of a contract.

This may sound more like a warning than an endorsement of trading opportunities. But I can speak personally of the benefits of having international trade horizons, rather than limiting ourselves to local ones.

It is no coincidence that the most successful local businesses are those that trade internationally. Nor is it coincidence that the Eurozone country that has done best during the economic crisis is Germany, which has the clearest export focus. Exports make up a half of German economic output, compared to a third of the UK’s.)

In the coming decade, the size of the middle class, globally, will rise from under two billion people to over three billion people. That creates trade opportunities that simply cannot be matched in the home market – even with City of Culture next year!

Any businesses wishing to join the North West Exporters Club should contact the Chamber on 71 262 379.