Trading places
Overseas business missions were once little more than glorified junkets for the organisers, and cut-price holidays for their corporate customers.
But today the international jollies have been replaced with slickly organised trade visits, where every pound of subsidy is weighed against the likely outcomes. Delegates’ days are crammed with high-level embassy functions, briefings by commercial attachés and meetings with potential clients.
Even if firms are eager to join one of the new-style ventures, they may still be advised against the trip, if it’s thought they won’t get maximum benefit.
One of UK Trade & Investment’s (UKTI) most experienced international advisers, Derby-based Tim Jolley, says the trade visit that left the East Midlands for Russia in early April 2008, exemplifies the way such ventures now work.
“We identified the BRIC countries (Brazil, Russia, India and China) as key markets for trading opportunities, so although this visit was funded by the East Midlands Development Agency (Emda), it did fit very much into the UKTI mould,” he says. Pleasingly for both UKTI and Emda, the Midlands delegation was the largest to visit Russia from the UK for more than a decade.
Twenty-five representatives from 18 companies took part, from a range of sectors spanning ICT, infrastructure, construction, automotive, consultancy, financial services, and environmental. “We vet every business wishing to go on the trade visits, especially for such challenging markets as Russia, and I visit every one,” says Jolley.
“If we thought they weren’t operating in the right sector, or that they weren‘t really experienced enough for a particular market, we would advise them not to take part.”
Each delegate had to attend a one-day workshop – Doing Business in Russia – and Jolley was delighted to discover that 75 people turned up for the event, who hadn’t even got places on the four-day visit. “The attendance emphasised the enormous interest in Russia from Midlands firms and the presence of the head of commercial trade from the Russian Federation showed just how well the event was regarded,” he says.
“Investment by UK firms in Russia was up 40 per cent year-on-year, which reveals just how much commercial activity is going on, behind all the politicking.”
Each of the firms had to pay £450 for a basic Overseas Market Introduction Service (OMIS) report from UKTI. Most chose to pay £900 for a more sophisticated version, so they had a guaranteed schedule of meetings, with senior managers from their target companies.
Thanks to a new BMI service, the return flights from Heathrow to Domodeovo – Moscow’s biggest passenger airport – cost just £285 and, even though hotels in Russia’s capital rival Tokyo in terms of price, the final cost per delegate was only around £2,000.
Every element of the visit, including the acquisition of business visas, was organised through Emda, UKTI or the London arm of the Russian National Tourism office. The Emda subsidy, of £250 per company, then made the cost even more of a bargain.
“There was a time, when some companies thought OMIS reports, and travel costs, were prohibitive, but we had no complaints about the Russian visit,” says Jolley.
It would certainly have taken an ingrate to object, particularly as delegates were also given an embassy briefing by the British Ambassador, Sir Anthony Russell Brenton, and subsequent detailed guidance from his commercial attachés. Follow-up meetings with each company on their return are equally important, to ensure they gain commercial benefits from their investment.
The most recent overseas trade visit from the region, before the Russian trip, went to another of the BRIC countries, China, organised by the Emda-backed East Midlands China Business Bureau.
For Heath Walker, corporate finance partner with accountancy Cooper Parry, it was his first such visit, but he was so pleased with the results that he has already booked his second. “We have a fair number of clients who are looking at China, either for manufacturing or outsourcing. We wanted to develop first-hand knowledge of the market,” he says.
“We also wanted to assess the scope for future corporate finance deals, as we believe China will have significant cross-border opportunities.”
Walker was impressed by the pre-visit planning, particularly a half-day session on cultural awareness. He was delighted when the bureau and UKTI set up two days of high-level meetings with other advisers in Sichuan’s two main cities, via a full OMIS report.
Another regional business adviser impressed by the new-style trade visits is Birmingham-based KPMG partner Ian Greaves. “If an organisation had sufficient in-house resources, it might well wish to go alone. However, for the vast majority of companies trade visits must be the way forward,” says Greaves.
He believes Midlands manufacturers would be particularly well-advised to consider trade visits. “There may have been much debate about outsourcing, but I still find that all too often companies are just reacting to their international competitors, and not focusing on innovation,” he says.
However, Greaves equally counsels that any business looking overseas shouldn’t simply be seduced by the glamour of foreign climes. “Often people underestimate the amount of management time and effort which such trips consume,” he says. “Firms have to do their own research, and to know exactly what they hope to achieve from a visit.”
It is possible to fly solo overseas, like Wragge & Co’s Paul Howard. The firm’s London managing partner until last December he is now Wragge’s general counsel and remains in charge of its Northern Europe desk. The latter was created through Howard’s efforts, particularly in Finland. “We don’t particularly avoid trade visits, although I’ve never been on one, but I thought the best way into the Baltic was at an individual level,” recalls Howard.
His first visit to Finland came ten years back, when a local company acquired one of Wragge’s West Midlands clients. “I was the relationship partner, so thought I should visit their Finnish factory, look at the country and consider the wider prospects for business,” says Howard.
Wragge’s now has a solid client base in Finland and other Baltic countries but Howard concedes that the solo approach wasn’t easy. “It was tough, it was sometimes lonely and frustrating, and you do need immense patience, because building confidence and trust in a new country can take years,” he says.
“However, there is a great deal of satisfaction when a relationship is finally established, and there is an advantage in then being seeing as an individual, and not simply as part of a pack.”
