Insider Events

South East International Round Table

Insider gathered some of the best experts in international trade for a high level round table seminar held at the Apex Plaza in Reading this week. The key comments and pieces of advice from the panel are included here.

Speakers Key Thoughts & Biographies 

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Jeremy Newman, Wilkins Kennedy

I specialise in international taxation and advise UK businesses who are exporting on their international strategy, but also international companies looking at setting up in the UK.

Key comments: "There is a great opportunity in China for UK design skills. We have a particular skill in that area – something that Chinese know they need."

"The area I get involved in most is the Middle East which is quite a strange place to operate in, certainly compared to the UK. We have a number of clients from the UK who are doing joint ventures or local partnerships with established businesses as a good way of gaining a toehold. They get a local partner who knows the culture and then find they get round some of the problems with the UK regulatory framework, particularly the Bribery Act. It can be phenomenally difficult."

"We advised on a deal in Barbados and quite simply the other side weren't used to the standards of due diligence that we expected. You ask them to complete a 28 page questionnaire and they just won't do it."

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Anne White, head of international trade and compliance, Thames Valley Chamber

Our dealings are for practically assisting businesses in the Thames Valley whether they are experienced exporters, or are just starting to look at overseas markets.

Key comments: "The Thames Valley Chamber Exporters Survey recently saw the lowest level since 2009. I think that's because the crisis in the Eurozone is starting to knock confidence. Yet we are getting new companies to start exporting, which is encouraging."

"A lot of business fall into exporting. I have dealt with clients who can end up having 20 conversations before they get assistance. The message isn't getting through to the grass roots."

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David Squibb, regional trade director, Lloyds Bank

I've been with the bank for 27 years and for 25 of those I've been working with SME businesses on international trade and helping them to export all around the world.

Key comments: "We shouldn't lose sight of the fact that exporting isn't for everyone. A licence arrangement or a joint venture might be a better way forward. Businesses need to think very carefully before they export. It's not just about the replicating how they market a product in a domestic market, but considering how that is tailored in each territory. It is also about how you adapt your business to ensure you are able to collect the money in an overseas market. I've been involved in many cases like this where I've been able to help businesses who don't understand how things are done in different territories."

"Acquiring companies from abroad can phenomenally difficult. You can enter into a deal for all the right strategic reasons but if you don't execute it in the right way and you don't deliver shareholder."

"There is an awful lot of help and support out there from UKTI, the Chambers and they have a resource that can provide intelligence and evidence to back up a business with international ambitions."

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Mark Riches, national sales director, Bibby Financial

We fund SME owner managers for international trade, either through invoice discounting facilities or through a trade finance.

Key comments: "To be able to finance sales abroad, but to be able to give advice in those overseas markets is important. It's why we have the network of offices in 14 countries. We've had group companies set up in different countries with new companies. How do we get the message out to companies that there is help available for them from people like us who know what we're doing."

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Linda Penny, partner, Wilkins Kennedy

I have worked with international global businesses for many years, Wilkins Kennedy are also the national strategic partner to the British Chambers of Commerce Link to China Programme and I head that up at Wilkins Kennedy.

Key comments: "The fact is that the UK's traditional export markets have been in a shaky state. Companies need to be looking to the developing economies. The Chinese 5 year plan issued in 2011 is that they are looking for a more balanced economy and it is a policy point to actively encouraging imports for their domestic market and for the Chinese to invest outside. Given that China has only really been open for twenty years, that next phase is well and truly upon us. The impact of that policy decision, will play well into the hands of UK exporters.

"The markets where British skills and expertise should do particularly well are high tech goods, aviation, anything to do with green energy, such as our thriving eco vehicle industry. That is in great demand in China. At the moment we have the edge in some key industries.

"China is also desperate for skills so the country, the economy, can upskill. The Chinese government are quite smart, there's a realisation that the days of being a low cost manufacturer are numbered. Chinese manufacturing prices are being undercut from Cambodia and Vietnam so as part of the move to the next phase, they are looking quality products, but also services too."

On mergers and acquisition activity: "I'm going out to China as part of the annual Chinese outbound investment conference which will be attended by something like 1600 delegates. It is the annual event to encourage Chinese companies to invest in companies outside of China. The UK has a slot and I am honoured to have a half hour speaking slot at that conference. There are a number of UK companies owned by people in the late 50s for whom succession planning has become quite an issue. They have been hanging on through the downturn in the UK hoping they can sell when things get a bit better. But those thoughts recede into the background with every bit of economic bad news.

"Introducing Chinese businesses into this becomes more attractive. The fact is that the Chinese will pay good prices for good businesses. I know there has been this attitude that they'll own everything, but they own a tiny part of the economy at the moment. They are ambitious and are interested in the UK."

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Mark Webber, partner, Osborne Clarke

I head the technology group and have worked on exports for many years. I worked in the firm's Silicon Valley office for three years.

Key comments: You need a strong domestic economy – very few businesses are truly export led, one of the problems is a struggling native economy. There's a definite balance there. In the US we see business doing well then they secure another round of finance in order to expand. That's where we'll tend to get involved. One is to localise a product, the other is to ensure that software products are available in local languages. The west coast of the US has really learned that standard pattern of expansion.

"What we have in contrast is a lot of good technology ideas, but the scale of the domestic market means our businesses tend to be more tentative when they go to the US. While a trade mission is a good start, it's not enough to think that will do it for a company. You have to take the opportunity really seriously and keep going back again and again. That's where there's a struggle."

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Tony Warwick, international trade adviser, UK Trade and Investment

We're a government organisation and my remit is to advise companies who are experienced exporters, changing the way they export and, increasingly and importantly, those who are just on the cusp of beginning to export for the first time.

Key comments: "It is possible to overdo the analysis. Leaping forward it may make a sensible equation to say we export more to a small market like Belgium than a massive market like China, but the truth is there are people who want what we produce in Belgium. Also, while we see evidence that exporters target countries where it is easier to do business – Chile is more accessible than Brazil, for example - which is a good sign that we follow accessible markets before bashing our heads against a wall. There is a lot of good promise for the future."

"There are two types of exporting, reactive and proactive. There's nothing wrong with reactive, it's just that a lot of companies don't realise they're doing it and so they react badly, worth incomplete information and too instinctively."

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Lisa Harvey, director of supply chain finance, Bibby Financial Services

My remit is global, we fund SMEs and we have 44 offices in 14 different markets and my role is to promote international import and export trade in those markets.

Key comments: "The changing environment in China and in India is the growth of the middle classes. The two key elements that we are finding is that there is a real appetite for British goods. There is real love for buying British. But there's also a real growth in the luxury goods market. It's not just big brands like Burberry, but quality products that SMEs can develop and use their Britishness as a key brand value."

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James Massey-Collier, partner, Osborne Clarke

I have clients of varying sizes who export a lot, and some other clients who finance projects abroad. These are often M&A transactions where we work very closely with overseas advisers.

Key comments: "The Osborne Clarke South East Export Barometer and the Thames Valley Export Barometer reports are both quite significant. There is a real appetite for export and there is also a real confidence about exporting.

"The US is very dominant, from the South East to the Thames Valley. Eurozone and Europe. With South America, we assume Brazil is the main country, but it appears that the far greater export country is in fact Chile. Maybe they are driven to it by necessity, but there is a brave outlook regarding exports."

On mergers and acquisition activity: "As a firm we noticed we were having quite a crisp 2011, even though all the signs were that there was little activity in traditional corporate finance markets like debt finance, equity capital. The pan-European md-market M&A market was doing well. You buy a ready made presence in a market and a jurisdiction at a time when prices aren't that high. It is a strong area. The one caveat is that it can't be for everyone as you need a strong balance sheet and won't be raising a lot of equity."

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Businessmen meeting The round table discussion Businesspersons in mid-discussion
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South East International Round Table

Date: Tue 14th February, 2012
Location: Osborne Clarke Office, Apex Plaza, Forbury Road, Reading, RG1 1AX

To find out how you can get involved in an Insider round table, email Rebecca Baron or call her on 0161 907 9718.

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