Home Industry Associations Brexit: A Time to Export?

Brexit: A Time to Export?

by Brian Sims
Dave Smith

Dave Smith

Having written about exporting for Risk UK back in 2014, Dave Smith observes that it’s interesting to note how much has stayed the same since that time, but also notably just how much has changed. The single biggest factor is, of course, Brexit. Nearly three years after the EU Referendum, Brexit still brings uncertainty even at its most fundamental level of the withdrawal agreement itself.

I’ll desist from commenting further on this on two grounds: the sheer complexity of the arguments and consequences surrounding Brexit and the fact that the way forward seems to change on a daily and even sometimes an hourly basis just now. Brexit has, however, highlighted the importance of UK exports to those that may not have given it any thought previously, while at the same time presenting huge challenges to those companies that do export, not just to Europe but the rest of the world, and imposing supply chain issues on those that import goods for manufacturing purposes.

Among the turbulent waters of this sea of uncertain tides, the Fire Industry Association’s (FIA) Export Council acts as a rock upon which our fire safety exporters may depend. It provides an environment of mutual support to maximise the collective export capabilities of companies large and small across the fire safety sector.

Already, our 60-plus FIA exporters have annual overseas sales of around £350 million for fire protection products and systems and at least £150 million accounted for relating to Fire and Rescue equipment. For many organisations, their export revenue exceeds that of their domestic sales.

Their influence by global region is widespread with many exporting to North, Central and Southern America and Oceania, but with the most prevalent markets being Western Europe, the Middle East and, increasingly, the Far East. All are looking to expand their interests, notably in the Middle East, the Far East, Eastern Europe and Asia.

Building overseas trade

Back in 2012, the Government stated an aspiration to double overseas trade to £1 trillion by 2020, an objective which lacked a substantive strategy. It failed miserably and was quietly dropped. In August last year, the Government published its new Export Strategy which has the headline ‘a new national ambition to transform our export performance, raising exports as a proportion of GDP from 30% to 35%’. It remains, however, purely an ambition and is linked not to absolute export values, but rather a percentage of GDP. Hence it’s subject to more than export performance alone.

There’s another feature notable by its absence, namely no timescale in which this target is to be attained.

The document itself states the UK’s export challenge and the role of Government in providing finance, connections, information and encouragement through a range of measures, focusing on a business-led approach and doing only what the Government can do to generate the largest or most strategic return. Its focus on SMEs is certainly welcome, although the role of Trade Associations is disappointingly underplayed.

Much of its content builds on existing initiatives such as the GREAT platform and UK Export Finance, although interesting new features include peer-to-peer learning and sharing of Best Practice. In other areas, the offer is less assured, referring for example to the need to ‘incentivise business to export’, but stating that ‘celebrating excellence and innovation in trade and investment’ is the means to do so which appears unlikely.

Also, we have the spectre of Government doing what it can and not what it perceives it cannot, and the prioritisation of markets and sectors offering the greatest returns. The danger here is that Government perpetuates its existing support mechanisms and reliance on Government-to-Government contacts which benefits sectors such as defence and homeland security, leaving more end user-oriented sectors less well served.

The strategy was generally welcomed by organisations including the Confederation of British Industry, the British Chambers of Commerce and the British Exporters Association. It’s true, however, that factors such as further global economic stagnation, the escalating trade war between the US and China and, of course, Brexit may undermine the export push from the UK.

Only part of the story

The overarching Government Export Strategy is only part of the story. The Department for International Trade’s (DIT) Defence and Security Organisation (DSO), of which fire is a part, is set to publish its own strategy document which effectively enacts the Government strategy from a DSO-specific perspective. The FIA and its member companies were involved in a number of workshops leading up to this which enabled us to speak directly on the issues that face us as active exporters.

This leads us to highlight another industry-led initiative. The UK Fire Sector, supported by the Department for International Trade, has formed the Joint International Fire Board (JIFB) chaired initially by CFO Lee Howell and now by the FIA’s chairman Derek Gotts and managed by its Strategic Steering Group. Active since mid-2016, a number of dedicated volunteers have given time to developing what is termed the ‘UK Fire and Resilience Offer’ with key contributors including the FIA, the National Fire Chiefs Council, the Fire Sector Federation and several Fire and Rescue trading companies as well as the British Standards Institution and a number of training providers, exhibition organisers and other trade bodies.

Its initial work has focused on promoting UK Fire capability through Department for International Trade commercial officers worldwide in order to bring commercial opportunities to the domestic supply base and support the UK’s response where and when appropriate. The JIFB acts not as a project manager or contractor, however, but rather enables a free market response from UK companies or consortia.

Already, we have a promotional brochure, a website and an online community and have highlighted many project opportunities overseas. There have also been useful discussions with prime contractors, a number of overseas visits involving key industry figures and a presence at relevant UK exhibitions.

We fully expect to build on these foundations, better define and target high potential overseas markets and, hopefully, expand our presence into major exhibitions globally.

In what is an exciting development, the JIFB is now working to produce its own export strategy which aligns with that of Government and the DIT DSO and looks to take the fire safety industry to a higher and yet more strategic level in terms of delivering export opportunities for the sector.

Primary areas of activity

Meanwhile, the FIA’s Export Council has focused on two primary areas of activity in addition to its work with the JIFB. In the first of these, it has recently commissioned two fire-specific Market Reports on South Africa and Turkey which were financed from the FIA Research Fund. These assist our members in gaining an initial and actually quite detailed understanding of these overseas markets as a precursor to initiating or otherwise growing their export business in these territories.

The second involves overseas missions which are seen as among the flagship activities of our Council. Under the auspices of the JIFB, a visit to Brazil was undertaken in pursuit of a requirement from the Sao Paulo Fire Service for products and services potentially worth around £80 million. The opportunities cover a wide area of fire-fighting capability including fire appliances, underwater rescue equipment, Command Centres, IT and communications, breathing apparatus and personal protective equipment.

The visit began in Sao Paulo where the delegation met with senior figures from the Fire Service to showcase their product offering, build business relationships and explore partnering opportunities in-country. They then moved on to the capital Brasilia where, at the British Embassy, they met with decision-makers from the other 25 Fire Services in Brazil as well as representatives from the Ministry of Justice and those from local industry.

If there’s an awful lot of coffee in Brazil, there’s also an outstanding opportunity for UK Fire and Rescue suppliers that they continue to develop. Thanks for a hugely successful mission go to JIFB member Sarah Adamson and DIT personnel in London and Brazil who put together a superb programme that has placed UK suppliers in pole position to take advantage of significant sales opportunities.

Product showcase seminars

A further FIA mission took place in October last year and arose as a natural progression from the Market Report on South Africa. The programme featured table-top exhibition and product showcase seminars at prestigious locations in Johannesburg and Cape Town, the first at the residence of Her Majesty’s Trade Commissioner to Africa, while the second took place at the Radisson Blu Hotel. At both locations, our UK companies were able to link up with South African decision-makers, influencers, fire service professionals, those providing active fire protection products and services, as well as those directly responsible for fire safety in commercial premises.

Feedback has been highly positive and we’re delighted that we not only brought eleven companies to South Africa, but also attracted such fantastic numbers to both venues. It’s now up to the companies involved to progress their commercial openings in that country and for the FIA’s Export Council to look to offer further missions to priority countries in the coming years.

There’s much to be done to reinvigorate UK exports generally when its share of global exports fell from 5.3% in 2000 to 4.1% in 2010, while Germany’s share increased from 8.9% to 9.3% over the same period. One-in-five UK SMEs currently export compared with the EU average of one-in-four.

With UK exports almost halving as a percentage of the world market since 1980, renewed focus is essential especially as emerging markets are themselves increasingly bringing their own products to the world market, often with a lower cost base than their UK equivalents. The erosion of our manufacturing capability leaves us in an intrinsically weak position to capitalise on the industrial goods demand of the less well-developed world.

The FIA’s Export Council itself has enjoyed a period of significant membership growth and this provides us with a terrific opportunity to expand our field of experience and present the Council as a much more strongly-populated and, therefore, influential organisation than ever before. If we cannot solve all the problems of the UK’s export performance, we can certainly do our utmost for our fire safety exporters and assist them in expanding their already impressive performance in the global marketplace.

With the UK offer firmly recognised across the world for its quality products and engineering expertise, and armed with its historical pedigree augmented by modernistic and innovative approaches, the potential for maintaining an upward trajectory can surely be realised.

Dave Smith is Export Manager at the Fire Industry Association

*For more details on the FIA’s Export Council visit www.fia.uk.com

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