Some of the biggest opportunities for UK exporters are right on our doorstep

It is often said that familiarity breeds contempt, and for businesses in the UK, the very proximity of continental Europe can make it seem like a well-known neighbour we can take for granted.

However, despite the excitement surrounding the undoubted opportunities in the emerging markets of the BRIC countries - Brazil, Russia, India and China - British businesses hoping to maximise their export potential would be foolish to ignore established markets closer to home.

From the small principality of Monaco, with a population of just 30,000, to the huge economies of Germany, France, Spain and Italy, the cultural and geographical diversity of Europe is only matched by the range of opportunities for international trade.

There may be half-a-dozen languages to respect but the common tongue spoken by all is “business”. The nine countries detailed below have a combined GDP in excess of €5,600bn.

UKTI offers a number of schemes which will help relatively new exporters to gain a foothold in foreign markets - from the Export Market Research scheme which gives companies an insight into the opportunities within their sector in any given country to the Passport to Export scheme which actually helps new exporters to find business overseas.

The opportunities in continental Europe are immense. For instance, did you know that...

• Exports to France account for ten per cent of total UK visible exports and it is the UK’s third-largest export market for services. It is home to many of the world’s leading companies in many innovative industries and is open to foreign investors in all sectors.
• Tiny Liechtenstein has several companies of global importance including construction tool manufacturer Hilti, which is one of the principality’s many large investors in Britain.
• Belgium and UK companies are major investors in each other’s economies. Trade relations are further strengthened by the fact that more than 26,000 Brits live in Belgium.
• Germany is the UK’s second-largest global market and its largest European market. British exports of goods and services to Germany are worth more than £30bn and almost 1,000 British companies have subsidiaries there.
• Monaco has 4,000 businesses registered within its principality and its 30,000 population includes 1,300 UK nationals. Although not a member of the EU, it has adopted the euro. Along with bilateral and reciprocal agreements with France, this eases the trading path with Monaco.
• The UK is the second-largest investor into the Netherlands, which reexports 60-70 per cent of its imports, making it a dynamic trading centre and a useful springboard into other European markets.
• The English language is in common use in Swiss business. However, despite Switzerland’s geographical proximity and its position as the UK’s fourth largest non-EU market, exporters frequently overlook it.
• The UK is Spain’s fourth-largest supplier, after Germany, France and Italy. In 2005 exports to Spain were valued at £14.1bn, making Spain the UK’s seventh-largest export market worldwide.
• Style-conscious Austrians are increasingly looking to UK designs as demand within Austria for German and Italian goods decline. Mobile phone penetration in the country stands at 83 per cent and all five Austrian networks offer 3G services. Apart from having an eye on UK style, on average Austrians spend around £40 a month on gardening equipment and pet care products and there is a growing demand for imports of speciality, ethnic and convenience foods.

Trade between the UK and Germany remains buoyant - particularly in the vehicle and components, healthcare, aerospace, chemicals and creative industry sectors.

An indication of the growing links between this region and Germany can be gained from airline Lufthansa, which is enjoying record levels of business between Manchester and four of its hub airports in Germany. Passenger numbers for Lufthansa’s 85 flights per week - each with Business Class service - to and from Manchester hit a record high of approaching 580,000 last year.

For France, figures reveal the UK has a trading deficit but Britain has substantial surpluses in machinery, electrical machinery and in the energy equipment sectors.

Belgium is recognised as an open and highly competitive market, offering export opportunities in most sectors. This is especially the case for SMEs - particularly those that can deliver to Belgian’s exacting standards of quality, design, delivery and after-sales service. Fortunately, UK goods and services are held in high regard in the country, but the need for quality products and competitive pricing cannot be overstated. The most popular export sectors to Belgium include software and computer services, telecoms, chemicals, consumer goods, food and drink, pharmaceuticals, engineering and security.

Spain is a highly developed, competitive market, and almost anything sold in the UK is also likely to sell in Spain. The Spanish Government is committed to opening up its borders and has embarked on an extensive privatisation programme.

The UK is also the fourth-largest foreign investor in Spain. In 2004, the net value of investment in Spain stood at €1,126 million, and there are around 700 UK companies operating in Spain.

While Monaco’s reputation as a flourishing financial sector is widely known, its importance as a trading centre may not be. There are many import/export trading houses, agents and consultants selling to many of the former French colonial countries. Making contact with these businesses is a convenient way into the more distant but potentially rewarding markets.

The Netherlands’ highly-competitive economy offers substantial opportunities for trade across all sectors. The barriers to market entry are low and the country’s transparent legal framework and sophisticated financial services system makes it an attractive place for exporters - as does the fact that an estimated 75 per cent of the population speaks English.

Moreover, since the Netherlands is so geographically close to the UK and has excellent transport links to Britain’s regional airports, it makes exploring the market cost-effective and attractive to SMEs.

Success stories so far for UK exports to the Netherlands have included firms in the petroleum products, office equipment, data processing, pharmaceuticals and telecommunications sectors.

Telecoms firms will also find a welcome in Switzerland, along with manufacturers of electrical apparatus, non-ferrous metals and organic chemicals producers. In fact, Switzerland’s sophisticated and amenable business culture and wealthy discerning populace present a wide range of export opportunities.

Despite Switzerland not being a member of the EU, economic relations between the countries are healthy and there have been recent bilateral trade liberalisation agreements with the EU. Firm and predictable rules - often adapted to EU norms - make trading with Switzerland much more straightforward.

CASE STUDY - GAFOOR FOODS

A Lancashire-based poultry company has broken into the notoriously difficult European food market with its specialist halal products and is now tipped as one of the UK’s fastest growing food manufacturers.

Gafoor Poultry Products - set up in 1964 by three brothers who had emigrated from India - already counts Spain, France and the Far East among its export markets and has its sights set on further European exports.

The company has expanded rapidly over the past two years, from processing 80,000 birds per week to more than 220,000 for the halal market. It has invested £7million in a new processing factory in Deepdale, which is capable of handling 9,000 birds an hour.

As a result, the company demonstrated substantial growth in 2005, reporting increased sales of around 200 per cent.
Joint managing director Tahir Vaza says the business is continuing to expand, and increasing exports is one of the best ways to ensure growth is balanced. The company recently took part in UK Trade & Investment’s Passport to Export programme, which included an element of grant funding so that it could attend trade missions. This allowed it to meet relevant contacts within its industry and as a result it has established new trading routes to Spain and Thailand.

“That helped us to iron out many of the problems and get over the hurdles to breaking into new markets,” says Vaza.

“The Passport to Export programme provided an excellent grounding for us to explore our export potential.

“It helped greatly with the initial research and contacts, along with documentation, finance and, of course, security. We’ve increased exports by 15 per cent over the last two years and this year we aim to do even better.

“This has allowed us to grow and to create more local jobs. Now we have an established brand name and we’re looking to Belgium and perhaps other European markets as well as the Middle East.”

Mr Vaza and his co-managing director Maksud Patel believe that expansion of the company was necessary to cater for the growing Muslim community in the UK and abroad.

They have taken the opportunity created by expansion to raise the standard of halal processing and to ensure their products met the requirements of both the Meat Hygiene Service and the Halal Monitoring Committee (HMC).

In 2002, Vaza was named as North and West Lancashire Chambers of Commerce’s Young Entrepreneur Of The year and in 2005 his company collected its Outstanding Business Achievement Award.

For further information on UK Trade & Investment services, contact the North West International Trade Team
Tel: 0845 603 7053
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