BQ2 Scotland Issue 14

SPECIAL REPORT: EXPORTING FOR SCOTLAND PANEL GAME Perseverance pay off in cracking German market Global mindSET We all need to think about exporting BQ2 live debate The experts’ view from Royal Yacht Britannia

Scottish

EXPORT awards

2014

Wednesday 28th May 2014 Glasgow Science Centre

To enter The Scottish Export Awards 2014 visit www.bq-magazine.co.uk/export-awards For further information on the event or to book tickets please contact Jackie Malloy on 07968 146605 or email Jackie@blackpearluk.co.uk.

For sponsorship and BQ advertising please contact David Hughes on 07789 397526 or email davidh@room501.co.uk In association with

CONTENTS

CONTACTS

04 On the record

room501 ltd Christopher March Managing Director e: chris@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk

10 tips to start your export journey

05 News The latest from Scotland’s exporters

12 All in the mind Anne MacColl talks about thinking export

17 Fashionista How Bebaroque is adorning the international scene

22 World at your fingertip Increasing exports with a click

26 Get Smart Taking a uniform approach to export success

28 BQ2 Live debate What are the barriers to export and how do you surmount them?

34 They’re not fairweather friends How a worldwide network of Scots can help

40 Our man in…

Profiling SDI’s directors overseas

43 Mind your language Mixing Scotch with English and golf

44 Secret of German success The magic of the Mittelstand companies

45 Scotching World Cup hopes How Scotland will be present at Brazil in spirit

EXPORTING FOR SCOTLAND

SPECIAL REPORT:

EXPORTING FOR SCOTLAND

WELCOME

Welcome to Business Quarter’s special report on exporting and internationalisation. If your business isn’t already exporting, then we hope you will now consider it seriously after reading this magazine. Scotland’s future - whether as an independent nation or remaining within the United Kingdom - depends on what we make and sell to the rest of the world. It’s that simple.

We’ve a distinguished history of exporting but there is no room for complacency in today’s world: competition is fierce. This report will show that exporting requires planning, proper homework and a commitment to new markets.

In our major interview, Anne MacColl, the chief executive of Scottish Development International, the international arm of Scottish Enterprise, explains why creating a ‘global mindset’ must be at the forefront of everything we do in Scotland. To celebrate this mindset, BQ Scotland is delighted to announce the inaugural Scottish Export Awards, launching in the spring of 2014.

We think this is a fantastic way to showcase the strength and depth of Scotland’s exporters. Please put the date of these new awards - 28th May 2014 - at the Glasgow Science Centre, in your diary. There are seven categories, including Scottish Exporter of the Year. We hope you enjoy reading more about exporting – and being a part of the success.

Kenny Kemp, Editor of BQ Scotland

EditorIAL Kenny Kemp Editor e: editor@bq-scotland.co.uk Nick Terry e: editor@bq-scotland.co.uk Karen Peattie e: k.peattie@btopenworld.com Design & production room501 e: studio@room501.co.uk Photography KG Photography e: info@kgphotography.co.uk advertising David Hughes e: davidh@room501.co.uk t: 07789 397 526 Michelle Farquhar e: michelle@room501.co.uk t: 07551 171 211

room501 Publishing Ltd, Spectrum 6, Spectrum Business Park, Seaham, SR7 7TT www.room501.co.uk room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements.

All contents copyright © 2013 room501 Ltd. All rights reserved.

While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, December 2013. room501 Publishing Ltd is part of BE Group, the UK’s market leading business improvement specialists. www.be-group.co.uk

in association with

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BQ Magazine is published quarterly by room501 Ltd.

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ON THE RECORD

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The Export Factor: How to start a journey

Your company’s export journey has to start somewhere.

Here are the ten things to do to help make that first overseas sale 1. Take the export challenge: You can get a free evaluation report from Scottish Enterprise’s Smart Exporter site to see if your business is ready to trade in overseas markets.

2. Prepare to export online: This is the starting point of your e-commerce strategy. You will already have a website, so help is on hand to make the necessary steps. It’s an easy and low-cost way to test the water.

3. Get out and go to a workshop: There is a host of free, year-round events, forums and workshops where you can gain an insight into the opportunities.

Speak to people and find out how they’ve been doing.

4. Hone your international skills: It’s as simple as enrolling for a Preparing for Export programme. Again, it’s about building your knowledge on exporting.

It might mean you learn to say a few words in another language too.

5. Prepare for growth: What do you do if you suddenly get an order? Gulp! Do you have the capacity to meet the demand?

Don’t panic.That is a big topic and requires some planning.

6. Hire an expert who’s got the T-shirt: Bring in a consultant who can help your team. It’s best if it’s someone who has done the practical things to win export business.

7. Seek funding for an export manager: There is money available to hire an export manger – so there are no excuses.

8. Research, research, research: Get a proper handle on the market you’re in and research it to death.

Find out if it really is the gold mine you think it is.

9. Get funding to go to a trade show: Your business could be eligible for financial support.

But you won’t know until you ask. So get asking.

10. Join a trade mission to your target market: China, Brazil, the Gulf states, where do you want to sell your goods, because there is likely to be a mission that’s heading out there from Scotland. This is a great way to get your business moving abroad.

Help is out there.

Check it out on www.scottish-enterprise.com or phone 0845 607 8787, or Highland & Islands Enterprise on 01463 234 171

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NEWS

From gas turbines to textiles and from Normandy to India, we bring you the latest Scottish exporting success stories >> Entente Cordiale Scotland has signed an international co-operation agreement with the BasseNormandie region in France, to develop closer working links in the field of wave and tidal energy. The agreement will increase the opportunity for Scottish companies to be involved in the supply chain of tidal energy projects in Normandy.

Laurent Beauvais, President of the BasseNormandie Region, JeanFrançois Le Grand, President of the Manche General Council, and André Rouxel, President of the Cherbourg Urban Community, signed the agreement at the Scottish Parliament on 29 October with Scottish Government Energy Minister Fergus Ewing.

Mr Ewing said: “I am delighted that the signing of this co-operation agreement will increase the opportunity for Scottish companies to be involved in the supply chain of future tidal energy projects in Normandy and will facilitate research between universities in Scotland and France.

‘It represents a genuine opportunity for greater partnership working with a French region which has a real interest in promoting tidal energy.”

The agreement was signed as the European Marine Energy Conference, held in Edinburgh.

>> Sitting pretty in the Far East Totseat, the portable, washable highchair for toddlers, has been enjoying international exposure in the Far East. Creator Rachel Jones and the team behind the Edinburgh brand, featured in Business Quarter as a new start-up, were thrilled to be one of 28 UK companies represented at British Brands Festival in China.

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I am delighted that the signing of this co-operation agreement will increase the opportunity for Scottish companies to be involved in the supply chain SPECIAL REPORT | WINTER 13

NEWS

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>> Closing the Gulf Scotland’s minister for external affairs and international development Humza Yousaf led the country’s biggest delegation to the ADIPEC exhibition in Abu Dhabi.

Scotland’s oil and gas sector exports to the Middle East have risen to £457m, up 82% since 2010, and a strong presence at the major exhibition is viewed as essential for exporting firms.

The minister also participated in a session on developing a global energy workforce, how it attracts young people and supports an increase in skills availability.

“The conference session’s focus on growth is key and Scotland has a wealth of expertise available to boost business.

Whether through direct trade, cuttingedge research or educational excellence, it is clear that the importance of the overseas market is growing and the Gulf States are right at the very heart of this,” he said.

Scotland’s industry-led oil and gas strategy, targeting higher recovery rates, greater exports and £30 billion of annual sales by 2020, was launched by first minister Alex Salmond in May 2012.

The region is a key global oil and gas hub and Abu Dhabi is the biggest oil producer in the United Arab Emirates, offering Scottish companies significant opportunities to collaborate with local partners.

it the capability to perform more powerful and sophisticated tasks.”

The investment will enable the company to take forward product development, targeting a turnover of £10m in year five.

Eleanor Mitchell, director of commercialisation at Scottish Enterprise, said: “We are pleased to see Sofant secure its investment, allowing it to take its ground-breaking technology to market. Scottish Enterprise has worked closely with the company on this project, providing an integrated package of support including Proof of Concept funding for the spin-out process, and assistance from our High Growth Start-Up, SMART, Scottish Investment Bank and international teams.”

>> Donachie heads Omega John Donachie has been appointed managing director of Omega Completion Technology as the company plans for growth in key oil and gas locations in the UK and overseas. Mr Donachie, who joined last year as corporate development manager, has set his sights on delivering turnover of £12 million next year. The company, set up in 1998, is an independent well completion and intervention equipment developer and manufacturer. The firm employs 60 people at its 21,000 sq ft office and workshop in Kirkhill Industrial Estate, Aberdeen, and plans to recruit a further 20 people in the next year.

>> Sofant, so good

>> Exhibition presence

Sofant Technologies, a smart antenna technology firm, has secured multiple investment from Kelvin Capital, Scottish Enterprise and the Old College Capital, the investment arm of the University of Edinburgh.

The firm has created Sofant’s SmartAntenna, used in mobile devices, which consumes less energy and doubles battery life, an important milestone in the evolution of the antenna.

Sergio Tansini, CEO of Sofant, says: “This investment is a huge endorsement of our plans for future growth and our technology.

Each generation of mobile device brings with

A host of export-focused Scottish companies took part in Scottish Development International’s stand in ADIPEC exhibition in Abu Dhabi. They were: AmpControl UK, ASET International Oil & Gas Training Academy, Aubin, Centrifuges Un-limited, Cyberhawk Innovations, EnergySys, Envitec International, Global Energy SCS, Global Pipe Components, High Voltage Instruments, Inspectahire Instruments, Institute of Petroleum Engineering, Heriot-Watt University, Intelligent Well Controls, MacDonald Energy, Maritime Craft Services (Clyde), Monitor Systems Scotland, Omni-Interconsult,

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Online Electronics, Online Valves, PEAK Global Consultancy, Pendrich Heights, Red-Services, Reactive Downhole Tools, Scotmas Group, Senergy, Solutions Driven, Specialised Oilfield Services, Survivex, University of Highlands and Islands and University of Strathclyde.

A further 13 Scottish companies also had a presence at the show, including: Aquaterra, Safehouse, Keltec People, Rubber Atkins, Opus Plus, Aggrekko, Atkins, Chalmit/Hawke International, Hydrasun, ICR Integrity, NSL Ltd (part of ASCO World), Scopus Engineering and Doosan Babcock.

The success of Scotland’s textiles sector is testament to its ambitious and innovative companies >> Textile targets beaten The textile sector in Scotland is finding a renewed sense of vigour, with industry growth targets already exceeding 2020 targets for turnover growth and research and development investment.

Figures released by the industry show the sector has increased turnover growth to £950 million, up 12%, and invested £2.02 million, up 96%, in R&D activity. The sector has revised its targets to achieve between £1.2 billion and £1.5 billion in turnover growth and £3.5 million in R&D expenditure by 2020.

Head of textiles at Scottish Enterprise, Cathy Black, said: “The success of Scotland’s textiles sector is testament to its ambitious and innovative companies, which have a strong appetite for growth.

In 2013 alone, we have supported over 40 companies to participate in leading international events such as CHIC in China, Decorex in London and in November, six rail interior companies will visit Cologne to exhibit at the Railway Interior Expo.

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Mark Hallan, senior director for Europe, Middle East and Africa for Scottish Development International, said: “Scotland has a strong reputation in education and this new venture further highlights the high value that other nations place on Scotland’s knowledge, skills and expertise as world leaders in education and academia.”

>> Hot stuff for document firm

>> Gulf tie-up for Heriot Watt Heriot-Watt University in Edinburgh has strengthened its educational ties in the Gulf states with a new PhD programme in Dubai.

Scotland’s minister of external affairs and international development Humza Yousaf, and Dr Ayoub Kazim, the Managing Director of the Education Cluster of TECOM Investments, made the announcement during the minister’s recent trade trip to the Middle East and India.

PhD programmes in the Dubai campus will be available from the University’s School of Management & Languages, School of Engineering & Physical Science and School of the Built Environment.

Humza Yousaf said: “Heriot-Watt’s new and extended PhD programme will offer graduates more opportunity to further their studies. The Dubai Campus, opened by the first minister in 2011, now has capacity for 4,500 students and over 100 staff – a testament to the quality of education offered at Heriot Watt and its ambitions as a truly international university.

“Scottish education is renowned for excellence across the world. We have a world-class infrastructure with 15 universities, five specialist higher education institutes and excellent teaching resources – it is a sector we are very proud of and a fantastic example of Scotland’s capabilities in delivering world class events which we’ll see again as we host the Ryder Cup and the Commonwealth Games in 2014.”

EXPORTING FOR SCOTLAND

HotDocs, a leader in document generation software, based in Edinburgh and Utah, has received the Queen’s Award for Enterprise 2013, for it exporting achievement and international trade.

The company provides document services, as a Software as a Service (SaaS) programme within a Cloud Store framework, where software and data are hosted on the cloud. HotDocs Document Services enables the automatic generation of documents, from complex legal texts to human resources documentation. The company now supplies the UK Governments G-Cloud IV programme, delivering ICT systems that are flexible and responsive and taking advantage of new technologies.

The North American market represents more than 70% of Hotdocs’ worldwide business, with revenues expected grow by 30% this year. The company has seen an increase of 255% in overseas sales in the past two years.

HotDocs is one of only 13 Scottish award winners in 2013, with 152 winners in across Britain.

>> MJBI export milestone Glasgow-based MJB International has secured a multi-million pound contract from Air Liquide to provide gas turbine maintenance support services for four gas turbines operating in Rozenburg and Pernis in the Netherlands.

“This contract award marks an important milestone for MJBI and is another example of MJBI’s capability to provide maintenance support services at the highest standards internationally” said Brian Waddell, MJBI general manager.

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NEWS

>> Cool switch for sale SOFTswitch, the technology named by Time Magazine as one of its Top 10 Coolest Inventions, is for sale following an instruction to Metis Partners, the Glasgowbased, internationally operating intellectual property specialist.

The technology, which has been used by global corporations and organisations such as Nike, NASA, Apple, Burton and BMW, is at the cutting edge of textilebased electronic switching and control system technology.

SOFTswitch can be used in ‘smart clothing’, in which electronic device controls are essentially woven into the fabric, doing away with the need for hard touch pads. The wearable electronics market was worth more than £1.6 billion last year. The brand was launched at the Tomorrow’s World Technology Fair in London 13 years ago to capitalise on the enormous global potential for textile switches.

Nat Baldwin, of Metis Partners, who is coordinating the sale, said: “The potential of SOFTswitch has already been recognised by some of the biggest corporations in the world as well as by technology commentators and the potential for exploitation is immense. We are fully anticipating keen interest in SOFTswitch from a wide spectrum of potential buyers including those it is most likely to appeal to in the wearable technology, smart clothing and interactive sensor environments.”

The potential of SOFTswitch has already been recognised by some of the biggest corporations in the world as well as by technology commentators SPECIAL REPORT | WINTER 13

NEWS

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>> Manufacturing growth Exporting is helping the UK and Scotland growth. The UK’s manufacturing sector is the strongest for 18 years according to the latest CBI Industrial Trends Survey. Both the size of total order books and the pace of output growth over the past three months were the highest recorded since 1995.

This shows the recovery in UK manufacturing is accelerating.

The survey of nearly 350 manufacturers found that total order books relative to normal levels were their strongest since March 1995.

Export order books were also very firmly above average. Output volumes over the three months to November rose at their fastest rate since January 1995.

Manufacturers expect output growth to continue at a robust pace over the coming three months.

>> £4.6m Indian deals Scottish technology companies Dryden Aqua and This-tel have signed agreements with Indian firms that will help improve the supply of clean drinking water as well as improve patient care in hospitals.

Edinburgh-based Dryden Aqua will work with Indian firm SVS Aqua to use its water cleaning technology across remote parts of India, where more than 250 million people are exposed to unclean water. Dryden Aqua’s Activated Filter Media is used in Bangladesh and some parts of India for drinking water. It will now work with SVS Aqua on the new Eco-India project, co-funded by the European Commission and the Indian Department of Science and Technology.

Perthshire-based This-tel has entered a distribution agreement with Indian-based IT company Crane Global Solutions for its digital pen and forms products, which scan information written by the user and transmit it to a central server. The contract will generate an additional £4.6 million of sales.

Professor Howard Dryden said: “We are delighted to be working with SVS. Both companies want to deliver clean water for both people and for the environment and SVS has already made a strong start with their existing client base. It makes all the difference when you can work with people who have the same mindset and everyone at Dryden Aqua is looking forward to supporting SVS in their endeavours over the coming months and years.”

Stephen Forsyth, chief executive officer at This-tel, said: “This unique partnership will put India at the leading edge of world e-health technology, allowing patient participation at every level and ensuring accurate clinical analysis, which is distributed to decision makers and e-health experts globally in seconds.

“The potential health care advantages to both urban and remote rural communities of India are not only enormous but life changing.”K Raghava Ram, Director of Crane Global Solutions Limited said: “The partnership between CGSL and This-tel will revolutionise the way data is captured, aggregated and reported in critical programmes being delivered across India.

“The complementary strengths of both of the organisations in terms of applications, business intelligence and mobility coupled with the unique digital writing solution will help our clients to deliver key services to existing and new communities.

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Manufacturers finally seem to be feeling the benefit of growing confidence Stephen Gifford, CBI Director of Economics, said: “This new evidence shows encouraging signs of a broadening and deepening recovery in the manufacturing sector. Manufacturers finally seem to be feeling the benefit of growing confidence and spending within the UK and globally.

“Both order books and the pace of output growth are the strongest they’ve been since 1995, and firms are expecting similar-paced growth over the coming three months as well. But challenges remain. UK exporters need government support to break into high-growth export markets to reduce their vulnerability to any further Eurozone flare-ups.”

One of the key finding was that 28% reported that export order books were above normal in November and 27% that they were below, giving a balance of +1%, well above the longrun average of -20%.

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CASE STUDY

Star rises with a little help Star Net Geomatics, based in Livingston, provides 3D asset scanning and data processing services to a large number of blue chip telecoms, utilities and oil and gas companies in the UK and overseas. The company employs over 50 people, with more than 40 located at the firm’s West Lothian headquarters. The company was purchased by UTEC International, who plan to make Star Net a Centre for Excellence in the UK. “We could not have taken our business to where it is today without the collective support of Scottish Enterprise and Scottish Development International,” says Douglas Brown, Star Net Geomatic's founder.

Scottish Enterprise provided financial assistance and Helen Lewis, one of SE’s sustainability specialists, helped the company design and implement a new integrated management system. The system has helped to optimise and standardise Star Net's internal processes and allowed the company to promote their environmental credentials. In 2012 Star Net achieved ISO 14001 and ISO 9001 Environmental and Quality Standards awards.

It has been a long journey to success. Scottish Enterprise has been working with Star Net since 2005. Early support included funding for a consultant to help the company manage their growth. The economic downturn in 2008 meant Star Net struggled to generate the funds required to support this growth. Working with West Lothian Council, Scottish Enterprise

We could not have taken our business to where it is today without the collective support of SE and SDI was able to help the company access finance in the form of grants and low-cost loans. In turn, Star Net secured various R&D and RSA funding to support job creation, as part of the Scottish Co-Invest programme and, more recently, to purchase scanning equipment to overcome production bottlenecks. As Star Net developed its technology there was a desire to explore new markets, particularly in the United States. For this to happen, Scottish Development International (SDI) helped the company develop a clear international strategy.

To enable the company to access the oil and gas market in Europe and Africa, support was provided to part-fund travel costs and hire an international manager. The major telecoms opportunity were in the US and additional advice and support was provided to enable Star Net to gain advice on shipping and legal issues from Global Scots. Douglas Brown is clear about this great level of support. "We could not have taken our business to where it is today without the collective support of SE and SDI. They helped us get our systems in place in the early years and they were there to support us and step up to the mark when the financial crisis took hold. They also gave us the support and introductions we needed to break into overseas markets."

Donald Campbell, Scottish Enterprise Account Manager, says "It was obvious that the company had a great product which could have global appeal. Myself, and my fellow account manager Julia Thomson, have been able to provide some of the infrastructural and financial support to enable the company to surpass its initial promise."

Blake Hutchison, SDI International senior executive: adds: "We worked with Star Net to develop an international strategy for the telecoms and oil and gas industries, followed by clear action plans for each market. The company stood out as having great potential and it’s been fantastic to see them grow and succeed." n

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VIEWPOINT

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Growing our own export success story

Lena Wilson, chief executive of Scottish Enterprise, sets the scene for Scotland’s exporting future

As the world becomes more connected and trade more open, lucrative opportunities are emerging for Scottish businesses. From the traditional markets of Europe and the United States of America, to the high-growth markets of India, China and Brazil, there’s increasing demand for Scotland’s products.

The most recent evidence suggests that Scotland’s economic recovery is gaining momentum and international trade is firmly playing a role in this. Scottish manufactured export sales volumes increased by 3.5% in quarter two of this year, while the recent Global Connections Survey highlighted that Scottish exports grew by 7% in 2011 and are now worth almost £24 billion.

High profile exporters such as Brewdog, Rockstar North and Sgurr Energy demonstrate the very real opportunities that exist for Scottish companies. Indeed, in August, Ernst & Young reported that exports of Scottish goods will outpace the rest of the UK over the next five years, set to jump from £18.2 billion in 2012 to £20.1 billion by 2017.

With strengths in sectors from chemicals to textiles, financial services to electronics,

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Scotland’s exports are wide and varied.

Our food and drink sector continues to perform particularly well – HMRC Regional Trade Statistics showed that last year, Scottish food and drink exports reached £5.31 billion – the second highest on record.

Meanwhile, companies operating in the oil and gas sector continue to enter new markets – with exports rising by 8.4% to £8.2 billion in 2011/12.

While we are undoubtedly on track to achieve the Scottish Government’s target of a 50% increase in international exports by 2017, there’s no room for complacency.

We continue to work hard with our partners to help more companies recognise the opportunities that exist for their business internationally.

Our 27 global offices play a key role in this; staffed with local experts ready to help Scottish companies

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EXPORTING FOR SCOTLAND

navigate new markets and help them establish the right contacts to successfully grow their business and international trade.

Our newly launched Knowledge for Growth campaign will also play a vital role in helping to equip more businesses in Scotland to take control of their future growth strategies.

You can read more about this and our overall support offering throughout this BQ magazine.

There is no doubt whatsoever that Scotland competes in a truly global economy, so raising international aspirations and adopting an international mindset is an absolute necessity.

Scottish companies won't be able to create a competitive future for their businesses without actively pursuing opportunities in key markets throughout the world.

Thinking and acting globally will drive Scotland’s economic growth and help to cement our place as one of the most ambitious, innovative and successful countries in the world. n

While we are undoubtedly on track to achieve the Scottish Government’s target of a 50% increase in international exports by 2017, there’s no room for complacency

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INTERVIEW

Anne MacColl is the global cheerleader for Scotland’s economic progress. While she is urging more Scottish companies to export – she also wants to attract more inward investors to bring jobs here.

Kenny Kemp found her in fine fettle at the headquarters of Scottish Development International in Glasgow

A global mindset is a passport to success She is an adventurer with an international mission. Anne MacColl has scaled heights and criss-crossed the globe for Scotland. Her remit is a mixture of long-term planning, clear-sighted strategy, and an imperative to deliver economic development opportunities for Scotland. However, there’s another more intangible, but equally necessary, element: her job requires a national pride and passion that would trump even the most die-hard Tartan Army football fan.

As chief executive officer of Scottish Development International (SDI), the international arm of Scottish Enterprise, she leads a team with 27 offices overseas and ambition to increase international sales by £1.7 billion by 2015 – and this involves helping more Scottish companies set off on their exporting adventure.

We meet in SDI’s head offices in Glasgow, as the First Minister sets off to lead a trade delegation to China. This time, she is not accompanying Alex Salmond. However, she is comfortable that all the preparation and planning have been undertaken by her team and that the First Minister and the Scottish companies are in good hands.

“We’ve got an outstanding team. Julian Taylor is based in Shanghai and he is one of our most senior people and we have a new head of

EXPORTING FOR SCOTLAND

China, Mark Dolan, who is one of our most experienced international people. So we've got great experience on the ground now in China, which gives us super confidence in this mission being a great success.”

It is usual for a Scottish minister to lead our trade missions. But Anne MacColl stepped in with aplomb earlier this year on a trip to Brazil.

How did she feel about being the leader?

“It is a different dynamic. I felt the responsibility very keenly because it's really important for me as leader of the group to be able to provide the maximum amount of access and acceleration into that market for every single company on that mission,” she says.

The best – and only measure – of success is being able to return to Scotland and hear how companies can convert this opportunity into actual export sales.

Anne MacColl is a rare beast: a Scot who is multilingual and fluent in French, Spanish and Portuguese. On the Brazilian mission, she delivered a seminar in Portuguese, which created a ‘Wow!’ factor.

“A few local people raised their eyebrows and said ‘a Scottish girl speaking Portuguese, that’s interesting’. But it worked well. Anything that provides an impactful step into a market for Scottish companies is good,” she says.

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It has become a national embarrassment that business people in Britain – and this includes too many Scots – presume that everyone is going to speak English. Yet making an effort to learn something about a language and culture is a clear sign of respect.

“It makes a huge difference. It really does. It's all about that global mindset, isn't it?”

For Anne MacColl, this ‘global mindset’ is a recurring and important theme. How does she define this?

“It's all about how do we help every single company in Scotland, every single business person in Scotland develop a global mindset so that they're automatically thinking what >>

A few local people raised their eyebrows and said ‘a Scottish girl speaking Portuguese, that’s interesting’. But it worked well SPECIAL REPORT | WINTER 13

INTERVIEW

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Anne MacColl: has the national pride and passion to fight for export success the opportunities are across the world for what they are delivering, rather than seeing it in a small Scottish context,” she explains.

This is about a passion for Scotland, with Anne saying: “I can bore for Scotland. I never tire of telling people about our great country and what we have achieved and can achieve.”

Obviously it’s a deep-rooted trait. Anne lived and worked for 12 years in continental Europe. And during her time in Madrid, she was doing her bit by politely correcting anyone who presumed she was English by saying ‘Escoces’. It was during her time in Spain that she heard about the chance to work with Scottish Development International. She joined in 2005, becoming SDI’s Europe, Middle East and Africa operations director, based in Paris.

“I kind of came in to SDI from the outside in.

Even though I was out and about overseas, I kept in touch with an awful lot of friends and colleagues back here in Scotland. I remember friends emailing me and saying, 'Do you know SDI are looking to expand their presence?'.”

Scottish Development International was looking for more people with international outlook and experience – and a touch of that Tartan Army wae’s-like-us.

“I’m passionate about what we have here in Scotland: we have an incredible mix of ingenuity, high-educational attainment, a real

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There is continual work to explain that Scotland is a small nation with big entrepreneurial talents, technological prowess and world-leading strength sense of pride and place and identity. I think all of those characteristics are things that we can shout about more on the world's stage,” she says, gesticulating with both hands.

She clearly wants to shift the international perception of Scotland beyond golf, tartan and haggis, while appreciating these have an iconic value. There is continual work to explain that Scotland is a small nation with big entrepreneurial talents, technological prowess and world-leading strength in sectors such as health care and life sciences.

“The message about Scotland is getting out much more. However, I don't think there's any need for complacency. I still think that we need to continue to voice our message very strongly all over the world and help companies, countries, sectors of industry, recognise what Scotland has got to offer.”

Anne MacColl points out that 99% of

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opportunities for Scottish companies with a global mindset are outside of Scotland, and this is where they should be looking.

For Scottish companies, the export journey begins by signing up for Scottish Enterprise’s Smart Exporter advice and can lead to an introduction in China involving a trade mission with the First Minister. Along the way there are steps that need to be taken to build the mindset.

“We will talk to any Scottish company with an ambition to export. The level and type of support will depend on where the company is on its journey. Support might be through a Smart Exporter workshop. They come along to a strategy day, bring their business plan and we say ‘Let's work through what that looks like’. Then, further down the line, you might want to join one of our missions. Or we might suggest talking to Business Gateway:

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it depends on where we can add value. It is an interesting journey, our job is to recognise where a business is on that journey.”

With finite resources, SDI cannot really be expected to be all things to all people, so how do they decide where to go and when and how to open an office?

“We talk to everyone in the organisation to get a picture. I'm part of the executive leadership team for Scottish Enterprise, so obviously all of my SE colleagues are part of this discussion. And, of course, Lena Wilson is the chief executive with her strategic view.

We take a very measured approach to where we think the opportunity is and we work on that basis. While we examine this from a Scottish perspective, we also, very importantly, look at it from an outsider’s perspective.”

This means consulting the regional office directors, their teams and the GlobalScots to get an in-depth view of global opportunities.

For example, looking at the prospects in the Americas over the next three to five years and deciding whether to open an office in Chicago, Calgary or Rio, all of which now have an SDI presence.

“We are looking at the balance of cost versus opportunity. We don't have a bottomless pit of money so we need to take very careful decisions about where we go. Like all businesses, we ask where will we invest and what's the return on that investment? One of the interesting things we've done over the last 18 months, which has worked really well, is to set up the Pioneer Programme.”

This involves three to six month assignments for those working in economic development in Scottish Enterprise or Highland & Islands Enterprise, where people are sent to explore a new market. It’s full immersion for a young ‘Pioneer Programmer’ who will live and work alongside the UK Trade and Investment department, UK embassies and the GlobalScot network to help make a recommendation about whether SDI should be in that market or not.

“The pioneer assignments are fantastic for two key reasons. They help us make those very measured business decisions about where we need to be and they provide an overseas development experience for individuals, which

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they might not otherwise get,” she says.

Not only does this bolster the global mindset among Scottish companies but it cultivates this mindset across all development agencies in Scotland.

“I think that's really important. Everyone should have a chance to live and work overseas. It means people can touch and feel what life is like. If we're not convinced about how important that is, then we're not able to convince our customers. I'm on a real mission to make this work.”

She says the Pioneer Programme is working effectively with the intelligence gathering fed back into SE’s strategic decision-making while it also helps the individuals out in the field grow in stature and self-confidence.

“We need to benchmark what the opportunities look like against everything else. What's the market opportunity, how do we scope and size that? Arguably there is opportunity in every corner of the world, but we help Scottish companies focus on the products and services they have and the specific market they ought to be pointing towards. Rather than saying the whole world is open: where do you want to go? We might say to a computer gaming company have you looked at the West Coast of the United States?”

It is a two-way street of exporting and also enticing inward investors to come to Scotland. So connections must remain alive.

An example is the Plexus Corporation, a software manufacturing and design business in Milwaukee, which has made a commitment to new inward investment in East Kilbride, creating more than 150 jobs.

It is also about playing to Scotland’s strengths and Anne MacColl points to Aberdeen and its dominant position in the oil and gas sector.

“Aberdeen is more than a Scottish city: it’s an international location for oil and gas business recognised throughout the world. Our oil and gas industry is worth shouting about: our levels of expertise in project management, down-hole drilling, subsea systems, development and infrastructure. We have skills that are transferrable into renewables and into an awful lot of other engineering projects across the world.”

Such offshore opportunities have encouraged

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INTERVIEW

SDI to open an office in Accra in Ghana, West Africa, to help serve the growing offshore oil and gas market, particularly in the sphere of training and operations. The office represents a foothold for SDI to explore all of Africa.

“We're opening an office in Ghana. I'm going out to Africa in February to have a look at East Africa too, to see the opportunities for Scottish companies in Kenya, Tanzania, and Mozambique, and how can we help accelerate those opportunities.”

What are the risks involved in opening offices in developing nations?

“We need to weigh up the market opportunity very carefully with the geopolitical risk of placing people in these offices and encouraging companies to go and work in these markets. We don't do any of those things with our eyes closed. We analyse very carefully. Our decision to open in Ghana is because there's a politically stable level of governance there.”

SDI’s offices in 27 countries around the world have become hubs to serve a particular region.

So the new office in Rio is an exploratory hub not just in Brazil but for the rest of South America.

“The Rio office is going to help us make some decisions in the future about what direction we take. For example, this could be in Chile, which is a fast-growing and vibrant economy.”

SDI will be measured on its return on investment in setting up a new office.

“We are investing in Ghana because we believe the return on that investment is a ratio of one to seven, one to ten in the next three to five years. So we will amortize that so those are the kind of business decisions that we need to take,” says Anne.

She also talks with great pride about the success of Scotland’s GlobalScot network, now with several hundred Scots pocketed around the world. For example, she name checks Ian Stevenson, the chief operating officer of Technip in Africa, a world leader in construction, engineering for the oil and gas industry, which supports the oil majors, but is based in Paris.

“Ian is one of many. He is an excellent GlobalScot, based in Paris, and he travels all over the world. Ian's got a massive role in Technip covering Africa, but he's >>

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an example of exactly the kind of expertise gained in the North Sea that moves from Scotland to another part of the world and delivers value to his company, but also to his country.”

With Alex Salmond’s recent visit to Beijing and Hong Kong we return to talking about China, a vast and complex place to do business with 200 cities of over a million people and megacities of up to 20 million, including Beijing and Shanghai. So where does a small Scottish company begin on such a daunting journey?

“I'd love a lot more companies to knock on our door; we have seen a massive increase in companies that we're helping into the Chinese market. That's increased by over 88% over the last five years.”

Scotland’s exports to China are worth £498 million of goods and services, which are shipped to the Far East, up from £295 million three years ago. There is definitely more that can be done.

“I still think there's a massive untapped market in China. However, it is all about the focus.

It's too nebulous for a company to say ‘Let's go to China’. Instead, we might say look at opportunities in Shanghai, or let us help you get in touch with a distributor in Beijing. Or why don't you come to our Asia food and drink event in Hong Kong because we think your product will work best if you take it to Hong Kong and then ship it from there into to China. So our job is to help companies to get that focus, the starting point has to be their products and service and our knowledge and intelligence of what will work in those markets.”

She says it is important not to be daunted by the macro economics of China.

“It's very easy to say China could eat us for breakfast, the size and scale does blow you away. I want companies to feel there are still opportunities for them, but I don't want them to lose time thinking about the vastness of it, I want them to gain time by understanding the focus and specific sub-sector that we can point them in the direction of. It can be overwhelming.”

While Scotland’s biggest companies, such as the Wood Group PSN, Weir Group, Aggreko and Clyde Bergemann Power Group are

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the exporting elites, along with our Scotch whisky and drinks industry, increasingly, the spotlight is shifting onto Scotland’s service industries. How do we encourage these types of companies to think about exporting?

“I think we need to provide great examples of companies that have been there and done it. We need to raise awareness and ambition. Helping them gain enough confidence and courage to make those steps into the market is really important. If I look at companies, such as RockStar North, it is an amazingly creative, fascinating story. In the first day of trading the new Grand Theft Auto game took $800million: that’s a success story for Scotland - devised in Scotland.”

She also singles out the ambitious Scottish fashion label, Bebaroque, set up in 2007, which makes creative body wear designs.

They have recently expanded to the US, China, France and Japan with the help of

agreement with SDI and the Scottish Government on marine energy, which was homing in on Scotland's growing expertise in wave and tidal renewables. It involved a trip to Orkney to see a demonstration of the tidal wave machines that are operating in the Moray Firth.

“There’s a real chemistry around what we can bring to Normandy and what Normandy can bring to Scotland. Opportunity for Scotland's supply chain companies to feed in their expertise into what Normandy is developing along their coastline in the marine energy space. I get a kick out of this kind of international co-operation and understanding.”

Anne MacColl obviously loves what she does.

Her work is vital to the future success of our nation, and she makes a final plea using a shocking statistic: only 13% of Scotland’s dominant SME sector is currently

Accelerate your growth through exporting and really take it seriously.

We want you to have that global mindset. I fear for SMEs in Scotland if they don’t do this Smart Exporter. Their designer, Mhairi McNicol, has been at London and Paris fashion weeks helped by SDI’s office in Paris.

It is not all about taking Transatlantic jets to California and flying to Hong Kong and the Far East. There is much to be done nearer to Scotland.

“Europe is still our biggest trading partner.

The United States are our top export destination, but after that France, Germany, the Netherlands and Belgium are next on the list. Last year we opened a new office in Stavanger, in Norway, in recognition of oil and gas, and the importance of companies such as Aker Solutions and Statoil. We're definitely not ignoring Europe.”

Earlier in the week of our interview, a delegation of 80 people from BasseNormandie, in France, signed a co-operation

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exporting. Ultimately, this is where Anne MacColl and every single member of her team see the biggest challenge.

“This is not enough. So my call to action is to say to Scottish firms, ‘If you're not thinking about it, let us help you put that on the map for you. Let us help you work that into your business plan. Accelerate your growth through exporting and really take it seriously. We want you to have that global mindset. I fear for SMEs in Scotland if they don't do this. I fear for their future growth and success if they're not considering it.”

The ball is now in the court of Scotland’s small and medium-sized companies. There are no excuses for you not trying to develop a global mindset and seriously consider selling your skills and services overseas. Anne MacColl and her team are waiting to assist. n

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CASE STUDY

A jewel in Scotland’s fashion crown With fans including Lady Gaga, Beyonce and Vogue magazine, Bebaroque has been winning plaudits as it goes global. Rachael Borthwick reports on an Edinburgh-based phenomenon that is adorning the international scene

Designers-cum-entrepreneurs Mhairi McNicol and Chloe Patience have created a world-wide buzz. Bebaroque, the fashion label that they launched in July 2007, has captured a popular market niche providing luxury hosiery and body-wear for top flight department stores and a string of celebrities.

McNicol and Patience, both Glasgow School of Art alumni, make elaborately embroidered,

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jewel-encrusted and inked clothing with intricate designs. It is a signature style that has wooed the likes of Lady Gaga, Beyonce and Katy Perry. Bebaroque creations now have a massive fan-base and this Scottish fashion label is expanding rapidly and globally.

Their growth is not only the result of their original and coveted designs; it is also due to their hard work. Initially, McNicol and

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Patience identified potential retailers in the UK and abroad. After thorough research, they would approach the top five stores most likely to stock their luxury goods and personally invite the buyers to a showing or send them examples of their products. Such methods have paid off and Bebaroque designs are now stocked domestically and internationally in Harrods and Liberty in London, in KaDeWe >>

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CASE STUDY in Germany, in Curve stores in New York, Miami and Los Angeles, and in Lane Crawford in Beijing.

Bebaroque has also exhibited at the twiceyearly fashion weeks. It is in these short, hectic weeks, when the fashion world converge on New York, London, Milan and Paris, that trends are decided and where new labels break through. Bebaroque initially exhibited in London, where they gained domestic interest over several years, however, it was their first show in Paris that propelled their label on to the international stage, with foreign buyers taking note of the duo’s innovative designs and ordering stock.

Launching a business on the international market is not without its challenges.

Bebaroque has been helped by Scottish Development International which assisted with those all-important first contacts with potential stockists. SDI’s offices in France gave Bebaroque the support to successfully manage its exhibition in Paris, while also

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providing it with an introduction to a leading French retailer. SDI offers long-term support and has, through a graduate scheme, enabled Bebaroque to employ a graduate whose focus is on overseas promotion. As a result, Bebaroque’s designs have featured in the Russian, Italian and British editions of Vogue, Swedish Elle and German Madame.

They are at the forefront of the Scottish fashion industry too, having won the Scottish Fashion Awards, in association with Vogue and Swarovski, Accessory Designer of the Year, both in 2008 and 2011. Bebaroque shows Scotland is capable of producing first-class companies and facilitating their international growth from home. Bebaroque is an example to other young businesses in Scotland that wish to expand overseas; McNicol and Patience show that with smart marketing and hard work, success is possible. Their work with SDI shows that a network of support is available to Scottish companies wishing to develop internationally.

It would be unpardonable to suggest that their success is due to business savvy alone: their designs are beautiful, intricate and daring; they capture a zeitgeist for the unusual yet glamorous. With their expansion overseas, they not only better themselves but enhance the growing reputation of the emerging Scottish fashion industry. n

Bebaroque shows Scotland is capable of producing firstclass companies and facilitating their international growth from home

>> Co-founder Chloe Patience explains how Bebaroque broke into the market. She was talking to Rachael Borthwick Why did you decide to expand internationally?

“We began to grow the business internationally because we wanted our products and designs to be sold worldwide in the best boutiques and department stores. There is only so much you can do within the UK as lots of stockists can be put off if you are selling to too many of their competitors. They often want exclusivity, especially well-known department stores.”

How did SDI help you expand into international markets?

“We received a lot of help and support from SDI including funding for trade shows such as Paris Fashion Week, which enabled us to meet international buyers and press.

They helped us beat the language barrier and sort out unpaid overseas invoices. There is fantastic help available from SDI.”

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How important is it to you to stay in Scotland and will there be any challenges you face in doing so?

“We are lucky enough to have our own business based in our home town – and don’t plan leaving soon! With travel to London and Paris so convenient and easy we don’t feel the need to be based elsewhere.

While it’s exciting to do London and Paris fashion weeks, it’s great to come home to friends and family.”

Do you have any advice for other Scottish companies seeking to export internationally?

“My advice would be to take your time and check out any retailer and make sure they are the right partners before doing anything.

It never hurts to contact other designers or companies to ask for their experience of working with this new account.

“We always ask our international accounts

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to agree our terms and conditions and to pay their full balance upfront before we ship.

Secure a good deal with a courier company and always make your international accounts cover the cost of delivery and customs.

“This can be included in your product costing or as an additional invoice charge. Find the right trade show or venue so that you can meet the right kind of partners. Don’t be afraid to stand your ground; a lot of buyers and international businesses will push small companies for the best deal possible.”

Have you enjoyed the exporting experience?

“Yes, very much. We have found working internationally to be a fairly smooth operation.

It was a little scary at first but it can be very similar to working with other UK-based companies. We have found that many of our international accounts have been loyal over the years.” n

EXPORTING FOR SCOTLAND

BQ Magazine are delighted to launch the inaugural Scottish Export Awards 2014

Scottish

EXPORT awards

2014 Wednesday 28th May 2014 Glasgow Science Centre In association with

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In association with Scottish Enterprise, the BQ Scottish Export Awards will take place on Wednesday 28 May 2014 at the prestigious surroundings of the Glasgow Science Centre, hosted by the glamorous awards host and television presenter Adrienne Lawler.

Exporting remains high on the Scottish Government’s economic growth agenda and these awards are about recognising excellence against rigorous performance measures and the achievements and export contribution of Scottish businesses. The black tie awards dinner will showcase success stories, but more importantly, through the programme build up, act as an exporting call to action to the Scottish business community.

The awards programme will make a positive impact through the profiling of winning businesses as BQ magazine reports on the event winners during their year of recognition, providing long term exposure and extended editorial coverage.

The Scottish export market is a vibrant sector and has a wide variety of highly successful businesses already, such as alternative beer brand, Brewdog.

Set up back in 2007 the company continues to dominate the craft beer market and in 2012 the business increased revenues by 95%.

Other export businesses with strong trading performance include Lingo24, the leading translation company, who both help exporters to generate and support business across the language barrier and export themselves.

Also Eteaket, leaf tea experts dedicated to ethically sourcing exceptional loose leaf teas and supplying to Michelin starred restaurants and five star hotels throughout the UK and beyond.

Lena Wilson, chief executive of Scottish Enterprise, comments: “We are delighted to support the inaugural BQ Scottish Export Awards. With ongoing economic challenges, the importance of trading internationally has never been more important for Scotland’s future economic success.

“By recognising successful Scottish exporters and highlighting the significant benefits international trade can bring, the event and its accompanying programme will play a key role in helping to inspire many more companies to realise their global ambitions and to act on opportunities in overseas markets.”

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For these inaugural awards, the categories which have been confirmed are:

E-Commerce Exporter of the Year

This award will recognise a company that through e-commerce has increased brand awareness and recognition, expanded into new markets, increased sales and efficiency and improved customer service.

Most Innovative Exporter of the Year

This award will recognise a company that has made an outstanding innovative contribution to the export market. The company should have added real value to some aspect of their current operations through the innovative process.

International Trade Best Professional Services Advisor

This award is for Scottish based professional service advisers who have provided the best products and services to encourage Scottish businesses to internationalise.

Best Start-up Exporter of the Year

This award recognises outstanding achievements by a company in any industry that is new to exporting. Businesses are expected to trade at/or above £70,000 turnover and employ staff within their first 12-18 months of trading.

Scottish Export Team of the Year

This award recognises a team who has added significant value to the business by implementing a strong and effective export sales strategy.

BQ Scottish Exporter of the Year

This award will be presented to a company that has made an outstanding contribution to Scotland’s export profile and success. Companies must have really demonstrated how they have overcome their barriers when entering new markets.

The specially selected judging panel for the awards will be looking for nominees to include and demonstrate a number of key elements, such as highlighting their export growth and how the business has managed to sustain that growth, the company’s overall commitment to international business, the key decisions that have been taken to make the company a successful exporter and what new markets and technologies the company have utilised to grow the business over the last 12 months.

The awards are open to all Scottish headquartered export companies and details of how you can nominate can be found on our website, www.bq-magazine.co.uk/export-awards. Entering into the Scottish Export Awards will benefit your business in a number of areas, such

as raising your brand profile, generating publicity, help attract new investors and allow you the opportunity to network with fellow business leaders at the black tie event should you be shortlisted for an award. This event is your opportunity to shout about your success and we encourage as many companies as possible to enter a nomination.

The awards dinner will be fabulous opportunity for the region’s exporters to join together to recognise and celebrate the fantastic achievements of the Scottish exporting community. The dinner allows plenty of time for influential guests to network freely and it will be a real opportunity for you to meet with the other key decision makers and influencers from within the region and from farther afield.

To enter The Scottish Export Awards 2014 visit www.bq-magazine.co.uk/export-awards For further information on the event or to book tickets please contact Jackie Malloy on 07968 146605 or email Jackie@blackpearluk.co.uk.

For sponsorship and BQ advertising please contact David Hughes on 07789 397526 or email davidh@room501.co.uk

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How to make your overseas business click Polly Purvis, the director of ScotlandIS, explains to Kenny Kemp how her organisation is working with Scottish Enterprise to increase exporting opportunities E-commerce is by far the easiest way to get into exporting. If you have something to sell, you can get started with a connected lap-top on your kitchen table. It’s that simple.

ScotlandIS, the trade body for Scotland’s businesses in software, IT and creative technology, knows that many businesses have started this way and are now working with Scottish Enterprise to raise the flag for e-commerce exporting.

Polly Purvis, director of ScotlandIS, says that e-commerce is an easy way to get going – however the technology platforms are changing so rapidly it is often hard to keep up with the emerging trends.

“We’ve set this partnership up with Scottish Enterprise and Smart Exporter around the opportunities that e-commerce provides for Scottish businesses. Clearly, the drive from

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SE’s point of view is to expand exports from Scottish businesses. E-commerce is one of the easiest ways for people to start exporting.

Once you are up on the web, your customers can see you from around the world.”

Companies that start to build e-commerce platforms for transactions are among those experiencing the highest growth in sales outside their local geography.

“This might start off with customers in the UK but it quickly becomes other parts of the world.”

This is the catalyst for ScotlandIS’ e-commerce programme, which is endeavouring to increase export sales from all sectors of the economy.

“We are not involved with any specific interventions on a company-by-company basis. We are trying to get the message out that we are open for business across

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all sectors,” she says.

“An early win has been with Scotland’s food and drink industry and the statistics suggest it is doing well on its export drive. However, we want to assure companies from all other sectors that they too can get involved,” says Polly Purvis.

The programme involves a number of industry briefings and a series of more in-depth masterclasses aimed at helping companies fine tune their e-commerce capabilities.

“The industry briefings have been on a taster basis up until now. Hopefully, with Scottish Enterprise’s support we will be running them over the next 18 months. The master-classes will run until early 2015.”

“E-commerce is a very fast moving market place. Everything is changing not necessarily day-to-day but certainly month-to-month.

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Keeping up-to-date about the wider market place and the trends is a challenge for smaller companies using e-commerce as a platform,” says Polly Purvis.

Smaller companies now have a great deal to keep in mind. It is about making sure the website is right with great content, that the search engine optimisation and social media, such as Twitter and Google Plus, are being properly exploited, and vital analytics tracked.

It is about making sure the fulfilment is in place, working with distribution partners, such as DHL. This is all part of a modern e-commerce company who has ambition to export.

“We recognise that all of this is hard to keep up with if you are a small team with only one, two or three people. It is difficult, so we are building up a team of specialist practitioners across Scotland who are involved with this.

We want to give companies an easy way to always be at the leading edge.”

ScotlandIS is working to help businesses plot the next stages in their e-commerce journey, helping build great capabilities and looking into new overseas market. A first step is finding the right e-commerce platform and this should have the ability to add functionality as the company expands.

“Our master-classes are extremely valuable because they are helping people share experience on this. It’s about knowledge and information to build capability in-house.

Companies need to appreciate they don’t need to take a huge bite when building their e-commerce platforms. They can simply get up and running with small bites and then add new chunks as they grow. Certainly an e-commerce event will be a must for next year.

“We are all used to Amazon and Google being some of the big players but when you go to other parts of the world then there are different players involved and lots of smaller companies. For example, selling on eBay doesn’t work if you are selling into China and some other parts of the world.”

ScotlandIS is also running a conference and award ceremony on 13 February 2014 to highlight and celebrate the best of breed in the e-commerce sphere. This will include the latest development on e-commerce and who is leading the pack, particularly internationally. n

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INTERVIEW

Sense and sensor-ability David Smith, of Scottish Enterprise’s director of technology, engineering and creative industies, says that finding the best technology platform can help companies with their e-commerce strategy. He speaks to Kenny Kemp.

The capability of our information and communication technologies has a strong bearing on how Scotland performs in the big global markets.

“The knowhow of those who are developing the IT solutions and the platform capabilities is going to help us seize markets,” says David Smith. He pinpoints two areas: sensors and digital imaging as key for expansion. The sensor is a smart device that connects the digital world to the real world. They are the interfaces that enable the real world to operate more effectively in our increasingly digital world. “Scotland is already strong in this space. Using 2010 figures, it is worth £2.4bn in terms of the collective companies. There is a pretty strong cluster of 150 firms, with major companies including Selex, based in Crewe Toll, in Edinburgh, and emerging firms such as Gas Sensing Solutions and Coherent, based in Glasgow. All of which are doing well. The growth rate of that market is exciting and we predict about 9% annual growth rates for the sensor market.”

Senors are also vital for subsea activity in the oil and gas industry – where humans cannot operate and measuring flow and pressure is vital - and there higher growth rates of around 40% are predicted. So Scottish Enterprise is focusing on this prize too.

“We have an action plan around this opportunity, working with other public sector partners and the private sector. It includes targeting some of the really big markets such as Japan, where a big chunk of the sensors manufacturing market already exists. Health care is another area that is growing and creates interest for Scottish Enterprise.

“There are a great number of sensors in that market. We are working with medics within a small company with applications in the wound area, about giving patients the ability to do their own testing of the level of moisture in the wound. And all the savings that go with the tele-health care enabling people to monitor in their own homes. This will enable considerable savings in health care,” he says. Scottish Enterprise is also aligned with the new Technology and Innovations Centre at Strathclyde University in Glasgow, where there will be a focus on sensors and imaging.

The technology advisory group (TAG), a high-level group of business people from the technology and engineering, is also advising on theses action plans. Funding for companies is now well developed too and there are several mechanisms. Scottish Enterprise is trying to identify companies that can grow to £5m within five years. The Scottish Investment Bank operates as a funder through the Scottish Co-Investment Fund, which can match fund up to £2m with Scotland’s vibrant angel investment network. The bank operates by getting alongside the private investors in the normal way and supporting their judgment and diligence. In the sphere of commercialisation function, David Smith’s colleague Eleanor Mitchell and her team of specialists are working closely with academia, and other parts of the private sector looking for opportunities that may emerge as a result of spin-outs from universities. While e-commerce is the starting point for many exporting businesses, it is not the complete answer and firms really have to understand their evolving relationship with customers.

“We see that ICT is enhancing the relationship with customers and this is why Scottish Enterprise supported 500 companies last year, a large part of this in sales and marketing strategy,” he says.

“My job is to provide the overall strategic direction and where we see the major opportunities and what direction Scottish Enterprise should give to the various support functions and mechanisms. It’s an unfinished task because technology is always moving – and that’s the way it should be.”

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Retail is for keeps Technology firm Clear Returns, based in Glasgow, uses analytics to help retailers handle the thorny issue of ‘returns’, ensuring more items are for ‘keeps’ - and making better margins. Kenny Kemp reports Vicky Brock knows about customer habits.

After all, she is a customer too. She says there is a new ‘point of sale’ when the purchase is made. And it’s not where you have your credit card swiped in the store, or even once an e-commerce transaction has been completed and you get the email confirmation. No, not at all.

It is when – in the privacy of your home – you actually decide to keep the product.

This is the bold assertion that Vicky Brock, chief executive officer of Clear Returns, made at an IBM Business Connect Conference, but she maintains it is absolutely true.

Clear Returns are experts in working out how to sort out the ‘returns’ of many major players, which is a fundamental pillar of customer service. If, as a customer, you are unhappy with what you’ve bought, then you simply send it or take it back. This is a ‘return’. And with e-commerce increasingly a major part of fashion retailing, more people are ordering online – and then finding out that the product doesn’t match their expectations or needs.

Vicky co-founded digital agency Highland Business Research, which went on to become Scotland’s first Google Analytic Certified partner and the first authorised trainer outside of the US, has been at the forefront of using data to provide actionable insight. She has taken this expertise into Clear Returns, now helping international clients save money by highlighting the processes and customer behaviour causing costly returns. The company is being helped by Scottish Development International to break into overseas markets.

The ‘returns’ question is a major issue for

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retailers, so anything that can be done to help this is welcome.

“At Clear Returns we have the data to prove that for several sizeable segments of online shoppers, the real shopping process actually starts post transaction – where the retailer’s influence is minimal at best. The sale is just the short list,” says Vicky Brock.

The whole retail experience is geared to enticing the shopper to buy more than they require. When you include the generous free delivery terms that customers now expect, then this can become a massive drain on resources.

“Many are aware of the marketing tactics encouraging them to buy more and buy more often, and they are fully aware of the discounting cycles of their preferred retailers.

When the goods arrive the tables turn. In their own home, with only minimal retailer influence, customers can then actually make the decision on what they’re going to keep, and if they’ve paid by credit card chances are a penny won’t even leave their account, so even cash flow is not a constraint.”

This is creating a huge amount of waste. She says ‘real satisfaction for customers is about keeps, not returns.”

“The shopper may assume the returned item goes straight back on sale (or as our research shows they have simply never thought about it) – but that is rarely the case. Goods have to get moved to central warehouses, they may require repacking and cleaning, they may simply not be worth selling again and go to outlet or disposal. Additionally, an item that has been returned is more likely

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to get returned again, so is less likely to keep its margin.

“The reason I founded Clear Returns and the rationale behind our technology is that I believe we should optimise for profit, not simply revenue. Let’s judge a sale and let’s judge product performance by when it is kept, not when it starts the fulfilment process,” she says.

Clear Returns’ technology includes Echo, which forecasts product returns and alerts retailers quickly to the most crucial issues, while Seer allows retailers to understand customers based on what they keep and tailor responses accordingly. Smart Exchange, which is in development, retains more spend post sale.

Because the sale is just the beginning.

Returns may be a headache for retailers so ‘keeps’ are in everyone’s interest. n

www.clearreturns.com

The whole retail experience is geared to enticing the shopper to buy more than they require

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CASE STUDY

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CASE STUDY

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A smart exporter in uniform Uniforms have become much more colourful and subtle, reflecting the changing positions of carers and health workers in our society. Scott Sharkey of Matrix Uniforms explains how this shift has meant new streams of international business Matrix Uniforms have supplied an extensive variety of customers in the Healthcare market for thirteen years now and we have seen various changes take place in this time. For many years, our customers ordered primarily ‘traditional’ healthcare styles, using different colours to identify staff in various positions, royal blue for care staff, navy blue for nurses and so on. Traditional colours were dominant for uniforms. The market has been changing though. In recent years, our healthcare customers have split into various ‘groups’ with the more classic styles still popular but many customers shifting to more modern styling and brighter colours for their staff uniforms.

In August 2006, one of our oldest customers, a care institution of over 100 years old, split their uniform ordering by department. They were extremely conventional and had only come out of the traditional nurses dresses,

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hats and belts a couple of years before. They made the decision that for their residential and palliative care units, they would continue with a classic uniform style, however they moved away from conventional nursing colours and personalised their own bespoke colour scheme to reflect their strong brand, visual look and feel over their home. In their dementia unit, they altered their uniforms completely. We designed them a uniform from scratch which was visually much softer; a wrap-over style tunic in a colourful fabric. From this area, they removed rank colours and issued only the one style of tunic. With a few tweaks, this has continued and it works extremely well for them and blends with the air of homeliness they have created.

Since then, the numbers of colourful and bespoke garments we produce continues to grow year on year along with demand. While

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this was primarily common among dementia and neuro-rehabilitation centres, this trend has continued to grow into nursing agencies, care homes and several of our largest public sector customers. Even certain branches of the NHS are changing with one large PCT in London dressed in our purple and black tunics. Staff are more involved than ever before in their own uniform selection.

Our company focus has always been on total customer satisfaction, both before during and after sale. We work hard to understand the demands our garments will face in the working environment. This has been key to our growth and our experiences reflect that customers want the right product, at the right price, right away.

E-commerce is ever expanding with customers increasingly expectant of fast deliveries and accurate communication. We have a unique

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ability to meet our customers’ demands both for bespoke orders and in supplying modern, consistent stock as we manufacture here, in the United Kingdom.

Having a tight control over our production means we can offer consistency of colours, sizing and styles in our range of garments. Our manufacturing base in the United Kingdom allows us to create a bespoke order in as little as ten working days, as opposed to the 10-14 weeks more commonly associated with imported garments. Rather than importing from the Far East we can restock quickly and effectively, ensuring our customers can receive orders when they need them. Demand has also rapidly grown for our bespoke uniform collection over the past four years.

Now we are building our expertise when it comes to exporting. What sparked our desire to export was the volume of orders and enquiries we received through our web store, despite stating clearly we did not ship overseas. Using Google Analytics, a free tool which shows in-depth information about people visiting your website, we were able to establish that approximately 20% of our web traffic came from international sources.

Ultimately we asked the question: ‘Well, why is it that we do not ship overseas?’

The inquiries were extremely interesting as it seems healthcare uniforms users around the world, especially in Scandinavia, Ireland, Australia and mainland Europe, were experiencing similar problems to our domestic users, with a limited colour range and longer lead times for bespoke uniforms.

The first step was a free tuition seminar from

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Putting international shipping information on our website was enough to get the ball rolling and within weeks we were shipping parcels all over the world

Scottish Development International, who provide a Smart Exporter course to get companies on the first step of the export ladder. This helped us understand if exporting was a viable option for us and if so, what timescales we would require to get up and running, what the costs involved were and which countries would be suitable for us to target.

Our SDI account manager spent time understanding our needs and the experts at

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CASE STUDY SDI undertook the research required to help us determine the answers to those key questions.

Less than nine months later we have clear goals for international expansion, a staged development strategy in place, and we supply over 30 countries worldwide and have our first international distributor. Our journey into exporting has been mind bogglingly fast, it has been an eye-opening experience.

Putting international shipping information on our website was enough to get the ball rolling and within weeks we were shipping parcels all over the world on a reactive basis, a great first step for any business looking to build an operation overseas as it is available 24 hours a day.

However, a complete redesign of our website allowed us to create a flexible ordering system that would take into account shipping cost, duties, taxes, VAT validation and multicurrency support. It now provides information to our customers all over the world.

The advice I would give any business looking to export is simply to take the first step, do not be daunted by the abundance of information which you will face both on and off line. It is about focusing your attention and creating an efficient solution, picking the product or products you feel most suited to fill an international gap. We continue to find that international business is not enormously different from domestic and have faced similar challenges. Having a team of experts at SDI is an enormous helping hand. Taking the plunge is definitely the key to success and we are now starting the second phase of our international strategy development. n

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in association with

The world is closer than we think

The issue: How can we help Scottish businesses to internationalise? What obstacles stand in their way and what support is available to overcome them?

With export volumes increasing and distinct opportunities in existing and emerging overseas markets for companies operating in all sectors, for many the time is ripe to explore and exploit these opportunities, and ensure that international trading features higher on their business’s agenda.

According to the Scottish Index of Manufactured Exports, published in October, export volumes rose by 3.5% in real terms during the second quarter of 2013 (April to June), the second consecutive quarter of positive growth. Certainly, the figures are encouraging and Scottish Development International (SDI), the international arm of Scottish Enterprise and Highlands & Islands Enterprise, is helping more Scottish companies than ever before branch into overseas trading markets.

Yet is there sufficient help and advice available? Last year, SDI worked with well over

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2,000 companies to develop their international business – an increase of 52%, according to SDI’s annual results for 2012/13. Support included a range of trade and investment activities such as trade missions, workshops and in-market support. As part of this, SDI worked with 229 companies on high-value international projects that are expected to lead to an increase in export sales of £818 million over the next three years – up from the £733 million achieved 2011/12.

The figures are impressive. Yet even Anne MacColl, chief executive of SDI, admits that there is still much work to be done. Kicking off our Live Debate, held amid the elegance of the Officers’ Wardroom on board the Royal Yacht Britannia in Edinburgh, MacColl said: “At SDI we are thinking very hard about not just where we are as a country regarding international trade but where we want to be.

“On exports, things are moving well but I want

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Taking part Ros Donaldson, client relationship director, Tidalfire Eamonn Doyle, vice-president of sales & marketing, Avvio David Grahame OBE, chief executive, LINC Scotland Jonathan Heap, owner and director, No Need 4 Mirrors Alison Grieve, chief executive, Safetray Products Anne MacColl, chief executive, Scottish Development International Alister MacDonald, group managing director, Barr & Wray Campbell McLundie, partner, Scott-Moncrieff Gareth Magee, partner, Scott-Moncrieff Alex Nicol, managing director, Spencerfield Spirit Company Sandy Rowan, chief executive, Pointer Iain Stirling, founder, Stirling & Stirling Charlotte Wright, director, business & sector development, Highlands and Islands Enterprise For BQ Scotland: Karen Peattie In the chair: Caroline Theobald BQ Live venue: The Royal Yacht Britannia, Edinburgh

BQ is a leading independent commentator on business issues, many of which have a bearing on the current and future success of the country’s business economy. BQ Live is a series of informative debates designed to further contribute to the success and prosperity of our economy through the debate, discussion and feedback of a range of key business topics and issues.

to see them moving faster. A lot of you round this table have international experience – you have travelled widely, you have lived overseas, you have touched it, felt it, smelled it, tasted it,” she said. “But I would like to see more of an international mindset across all our business sectors,” she continued. “There are stacks of opportunities for Scotland. We are a small country with a fantastic brand and a strong proposition but it is all about opportunity as well as challenge. And more than anything it is about mindset. How do we package that to the rest of the world in a way that has real resonance?”

It was significant that the Royal Yacht Britannia, steeped in history and patriotism, was the venue for a BQ Live Debate on internationalism given the grand old lady’s role in promoting Britain as she travelled

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the world on her Royal duties for over 40 years. And as this particular debate gathered momentum, there was discussion surrounding the challenges and barriers to trading overseas plus inspirational stories from those who have experienced trading in countries where the language, social culture and way of doing business is sometimes very different.

As delegates enjoyed their supper, chair Caroline Theobald, orchestrating proceedings from the helm in a style that surely would have impressed Britannia captains through the ages, asked delegates to introduce themselves and share their varied experiences.

What emerged was a menu overflowing with knowledge from individuals touching on issues such as not conducting sufficient research into a particular market, the importance of Intellectual Property (IP), not knowing where to go for help and advice, lack of funding and resources, utilising social media and simply not being brave enough to explore new markets overseas.

One of the best pieces of advice came from Eamonn Doyle, vice-president of sales & marketing, Avvio, a leading global provider of hotel booking engine technology with bases in London, New York, Dublin and Las Vegas.

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“If you are going to do business in the US, do your homework,” he warned.

“You need to have a website that is Americanized – I mean American English spelling and no UK case studies,” Doyle continued. “For young companies particularly, they need to understand that setting up an export opportunity is very different. It can be like a brand new start-up and needs your attention – it needs the owner or founder of the business to be there. Don’t send a lieutenant.”

Gareth Magee, partner at Scott-Moncrieff, echoed Doyle’s sentiments: “Too many people approach expanding into the US as a selling exercise,” he said. “You have to be aware that it is not just that – you also need to be thinking about distribution, staffing, finance

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and funding, all of those things and much more. You are effectively starting a whole new business and you need a skill set that is commensurate with that shopping list.”

One man who wholeheartedly agreed with Doyle and Magee is Jonathan Heap, owner and director of No Need 4 Mirrors, an awardwinning Edinburgh-based company that creates, designs and delivers mobile apps for the retail sector and whose customers include Debenhams, House of Fraser and Mothercare.

Striking a warning note, he said: “About two years ago, we won business with Saks Fifth Avenue but we have learned that our biggest challenge is what happens on day two.

“Getting that first overseas customer is tough but how do you move forward? We were not ready to internationalise but we did and >>

For young companies particularly, they need to understand that setting up an export opportunity is very different. It can be like a brand new start-up and needs your attention

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learned from it and have taken a step back until we are 100% ready to start again,” he pointed out. “You need to be really focused.

Saks Fifth Avenue is still a customer but we weren’t prepared for the differences in the way they do business. As others round this table have said, you need to do your homework and we have learned a lot of things we would not do again.”

Meanwhile, Pointer is one of the UK’s largest independent security companies in the UK, with established footholds in mainland Europe, the Middle East and Asia. So who better to offer advice than Sandy Rowan, chief executive? “I reiterate Eamonn’s advice on how important it is to do your homework,” he said. “We’ve been operating in Thailand for 12 years and are still learning. When you’re considering a new market overseas you need to know what resources are available when you get there,” he added. “You need to be confident and people you are dealing with also need to have a feeling of confidence in you.

I’m not an expert but I certainly know how not to do things now.”

As everyone sitting around the dining table in the Officers’ Wardroom finished their main course, the debate picked up pace.

Sandy Rowan: “Be aware of local practices.

If you are going to the Middle East, for example, don’t expect to be paid in 45 days.

You will always be paid but sometimes it can be months or longer – that is the type of cash you need to develop.”

David Grahame: “We are equity investors and we get people coming to us looking for working capital but that’s not what we do.

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You need to be confident and people you are dealing with also need to have a feeling of confidence in you.

I’m not an expert but I certainly know how not to do things now

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We twice lent to companies for this reason because we wanted to see them do well but that is not sustainable.”

Alison Grieve: “We started manufacturing in China and ended up with a good product but it was expensive for us. I would not deter people from manufacturing in China because it is such an important market but you need to be aware that outsourcing quality control can be quite expensive. Then you have the linguistic and cultural issues plus you have to be prepared to go over there yourself and be there on the ground.”

Anne MacColl: “We can help companies wanting to move into international markets through our 27 overseas offices staffed by our own people, local people and also ex-pats – so we can help you tap into new markets.

We have two of our best people in China: Mark Dolan is head of China and Julian Taylor, our Asia director, is out in Shanghai for two years so we have a combination of our own people, ex-pats who understand what it is like to live and work in these countries. The local people we employ know and understand these markets and can guide you through the cultural nuances.”

Gareth Magee: “We also have our own international network – over 600 offices in 100 countries – because it is essential that clients have access to the best local advice.

This is really important and we rely on our network to advise clients on local payroll, taxes, compliance and so on. You really do need to have the best local advice and I can’t stress how important that is.”

Alison Grieve: “We were originally set up

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as a manufacturing, distribution and design company, and make trays for iPads and tablets that don’t topple over. It’s as simple as that.

We export to the likes of Sydney, Beirut and Mexico, and have struck a lucrative licensing deal for North America which has put a lot of emphasise on IP. You must protect your IP. We have spoken to Finance Secretary John Swinney – and others – about setting up an IP insurance scheme.”

David Grahame: “As angel investors, our role in this area is very niche. At the time of engaging with a company, we will see that they are very small but with high potential. They are IP rich and are having to internationalise very, very early. And that does pose challenges.”

Alex Nicol: “We supply the likes of Waitrose and Sainsbury’s here in the UK but in fact 50% of our business is international. Our biggest challenge? The biggest challenge for us is funding and we have not been very brave – we have not gone to the bank. We used to take products around the country in a horsebox and for us the challenge is picking a market, picking the route to market and working hard with the right distributor. We don’t go everywhere.”

So what kind of help can Scottish firms expect when they decide to move into the exporting market?

Anne MacColl: “There is a before, during and after phase. We offer our International Business Manager for Hire service so for six months you can have a person out in the market working for you. A programme like this can speed things up. That is part of what we

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call our ‘before’ phase. Missions take place in the ‘during’ phase although you don’t have to join a mission – you can go to that market yourself and speak to our people. In the ‘after’ phase, you come back and do the follow through – we can help with that, too.”

Charlotte Wright, who has been working with Scottish companies in the Highlands, said: “A journey might take five to ten years and what is good about this discussion is that it exposes everything, warts and all. The business base in the Highlands and Islands is predominately small and micro-businesses and it is hard for them to get a toe in the water.”

But exporting is so much more than manufacturing – there are now increasing opportunities for e-commerce services companies, including those using the cloud.

Ros Donaldson: “eFormsFactory has been developed by our company, Tidalfire, which is a specialist technology company providing electronic business solutions online and

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mobile, from a need to take the business’s needs electronic. We are taking it global but we need some support. Here we’ve won a major contract with North Ayrshire Council to provide an eForms solution, to capture and analyse data online.”

Campbell McLundie: “It’s not just the private sector who are looking for help. We’re getting more involved with the public sector where they are being encouraged to go into international markets themselves – and where they are finding exactly the same challenges as the commercial sector. There’s no doubt that a lot of companies are looking for support from the likes of SDI, Chambers of Commerce and the British Council.”

Alister MacDonald: “Our business [swimming pool and spa specialist] is 50 years old but we’ve only been exporting for ten years. We have a presence in Dubai, Hong Kong and Beijing. You need to be enterprising but you need to have courage and a lot of cash.” >>

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Barr & Wray have developed a reputation for high quality service and delivery with some of the leading hotel chains in the world. They have exploited global connections to develop additional business opportunities in new locations which is particularly relevant in growth areas, such as China.

Iain Stirling: “Stirling & Stirling [hospitality company specialising in Scottish experiences] is involved in food and drink and travel. We are working in North America and Asia but you need to have an appetite for it. The challenge is growing and keeping a business of scale in Scotland.”

Anne MacColl: “There are other themes around companies of scale. Are we talking about Scottish businesses or global businesses? Look at Aggreko or Wood Group – both successful global businesses based here in Scotland and they don’t have tartan stamped on their heads.”

“For SMEs – that is companies with less than 250 employees – 13% export. But I think that is too low. If you look at Europe, it’s about 25% although that figure is a little bit skewed

are far more international in outlook for their business.”

Ros Donaldson: “I think that cash is a requirement but the way that technology is developing and the speed at which technology is developing is phenomenal – and that is an opportunity. The mind set is there. When we established Tidalfire 13 years ago we did not consider that we would just be UK-wide. It was never an option for us.”

Campbell McLundie asked Anne MacColl to explain how SDI balances its role of attracting inward investors with the wider economic development role of Scottish Enterprise. Anne commented that the attraction of larger inward investor employers, as a result of the skills available in Scotland, allows a greater number of these skills to be retained in Scotland for the wider benefit. However she accepted there is a fine balance to be maintained to ensure that indigenous businesses were not disadvantaged Iain Stirling: “No-one’s mentioned mentoring yet. I think a lot of large Scottish businesses could do more to mentor smaller businesses.

Look at social media, too. It’s about the hype and making people want what you have. There is quite a lot of work that could be done but the problem for SMEs is time because Germany does so much exporting but there is definitely something to aspire to for Scottish companies. Consider that 60% of our exports come from only 100 companies – that’s a very narrow base,” she says.

“And consider that our biggest trading partner is the rest of the UK – that’s worth £45 billion.

Exports to the rest of the world are about half of that - £23 billion. What would it take to flip that over? Does it help to have such a close trading neighbour or is it hindering us?”

David Grahame: “It takes time. LINC’s 20th anniversary is in December and we have assisted in helping companies set up in 23 countries.”

Eamonn Doyle: “I would say that the Irish

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When you’re already operating internationally and have an office and people on the ground, I think taking a little time to mentor someone would be really beneficial. But, having said that, we need to encourage a culture of people asking for advice.”

Anne MacColl: “I agree. The GlobalScot network now has 630 people around the world. They are professional, successful ex-pat Scots or people with an affinity for Scotland, someone who might have gone to university here, for example. We don’t pay them a fee – they just want to give something back to Scotland. How do you access this network?

You go to the GlobalScot website and anyone can do this and tap into it. It’s a bit like

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LinkedIn so you focus on the markets you are looking for and we will make sure you get that pull-through back. It’s very powerful when you think about the university network in Scotland and ex-alumni base all over the world.”

Iain Stirling: “Look at social media, too. It’s about the hype and making people want what you have. There is quite a lot of work that could be done but the problem for SMEs is time. Social media can work but it is trying to do that and get it right.”

Alison Grieve: “We’ve used social media a lot. You can keep in touch with people and put videos on YouTube. Facebook can also be really useful. For example, if you are going to be in a certain place you can ask friends if they will put you up and so on. A friendly face and someone who has local knowledge can really help you in business. We would never have been able to export in some of the countries we are in without personal connections and social media is important in helping you keep in touch with them and build relationships.”

Alex Nicol: “We’ve used Skype with one particular client and managed to get access to a party in the British Embassy in Greece.”

Alister MacDonald: “Something we’ve found works for us is to chase major international hotel groups. They can be very influential so rather than chasing countries, try to make inroads with a big group. For example, the Four Seasons has global central purchasing.”

Anne MacColl: “This is very true. John Beveridge of Hyatt, one of our GlobalScots, has helped some companies get into the Middle East and Asia. It’s all about thinking more creatively and not being afraid to approach someone you know. So if you know someone who is influential within an international hotel group or other organisation, approach them.”

Sandy Rowan: “There are definitely some straightforward lessons to be learned and a lot of common themes around the table.

But clearly doing your homework is a big, big tick. And we must tap into our Scottish diaspora. Don’t underestimate their size. Also, remember to focus on what you’re good at – don’t be distracted.”

Jonathan Heap: “I agree. If it’s not right for your business and you do go into that market

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then it will cause you problems in the longterm and you will waste a lot of time.”

Anne MacColl: “With so many business opportunities now lying outwith Scotland, it is about ambition, it is about commitment and it is about courage. Increasing our international business could be absolutely transformational for the Scottish economy if people can find a bit more courage.”

Iain Stirling: “Get a mentor and connect with people via social media which is a good way of getting to the people you need to get to.”

Gareth Magee: “I like Iain’s point about the role a large company can play. It chimes with a lot of what I hear from SMEs going to the US and dealing with large corporates. When an SME goes to the US and they suddenly find themselves dealing with large corporates, this is something they are not used to. They often struggle with finding the right people, being passed from department to department

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and coping with protracted decision making.

If larger companies here in Scotland can help, our growing companies will be better equipped and prepared when they go.”

Sandy Rowan: “Can I give you an alternative view? Sometimes there is more of an open mind in the US – they take us on what we can demonstrate we have done.

Campbell McLundie: “Much of the discussion tonight has been about people and I think that is very telling. Ultimately business is all about people and the relationships and connections we forge.”

There was much to be commended in encouraging more firms to export, but Jonathan Heap helped bring the event to a positive conclusion.

Jonathan Heap: “We don’t have an identity problem. Scotland has done a very good job of promoting itself so we are in a great position.

Let’s work on this!” n

Be prepared...

What is vital to all businesses looking abroad, it seems, are the requirements of commitment and preparation. However you plan to do it, expanding abroad will need your full attention and access to the best local advice; but the rewards can be significant.

Scott-Moncrieff works with many Scottish SMEs to help them realise their international plans.

From business planning and choosing the best structure at the outset to ensuring you comply fully with all the local tax, payroll, VAT and accounting regulations, we and our international network of specialists can help you to make it happen.

Scott-Moncrieff is a member of Moore Stephens International, a network with a total of 624 offices across 101 countries.

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INTERVIEW

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GlobalScots: our informed helpers who miss the Scottish weather Kenny Kemp caught up with three GlobalScots to hear more about their work Locally connected, well-informed and willing to help. That sums up the GlobalScot network - an astonishing success story in helping Scotland build its exporting prowess.

More than 600 executives around the globe make up this network, which links in to the highest levels of international business and economic development. In many cases, and to coin WB Yeats’s quote:'There are no strangers here; only friends in high places you haven’t yet met,' because the GlobalScots are able to help build valuable relationships for businesses keen to export.

Guy Crawford, based in the Gulf, has opened the doors for dozens of companies in the Middle East. He has been responsible for building the Jumeirah Group, the Dubai-based luxury hotel brand, into one of the most successful in the world. He recently retired

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from the 20-strong five-star hotel group, which includes the Burj Al Arab, Jumeirah Beach and Etihad Towers in Abu Dhabi, and the Emirates Academy of Hospitality Management.

Why does he do it? “Most of us are very proud of where we are from. We’ve been lucky and successful in our careers and it is a desire and wish to see what we can do in a commercial sense to help Scottish companies,” he says.

“We can assist in getting doors opened and explain the cultural challenges that exist in so many parts of world, which are important.

The GlobalScot can help people understand what these are and overcome them in a positive way.”

He says companies must have a compelling reason to be successful on the international stage. There is no room for being ‘wishy-washy’ and companies should be clear about their target markets.

GlobalScot Martin Oxley, who is the director of UKTI in Warsaw, was the chief executive of the British Polish Chamber of Commerce, and an expert in healthcare and life sciences. He has met a number of Scottish companies interested in moving into Poland in the IT sector, food and drink

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and renewables.

“Poland is growing and is the largest of Europe’s recent accession states and often an under-estimated opportunity. We can help them with signposts for distribution leads.

We have our office in Warsaw, where we are happy to meet Scottish companies,” says Martin, who is part of the Embassy team.

Martin, who has spent 15 years in Central Europe, has been involved in events, setting up a Polish-Scottish Association - with whisky tasting around the country, and building on existing relationships between Krakow and Edinburgh, to increase tourist opportunities and share trade missions.

He agrees with Guy Crawford that companies

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have to be as realistic and as clear as possible about what they are hoping to achieve.

“That will enable us to answer specific questions, which will help them move more quickly. We need a clear brief on what companies are trying to do, then we can help,” he says.

Gregor Mowat, who works for KPMG, is a more recent GlobalScot who has been one for around a year.

“I see the role of a Global Scot as helping Scottish businessmen and women do business around the globe,” he says.

What advice would he give to a Scottish company considering exporting to Kazakhstan and Russia?

“Make sure you understand the environment well before you start. There is a difficult bureaucracy, sometimes unclear regulations and tax rules and corruption issues in both countries. This makes the operating environment difficult. However, with the right partners and advice, these difficulties can be overcome. Take your time and try and get it right first time to avoid potentially expensive mistakes. Come and speak to us!”

While Gregor sees the most obvious opportunities in oil and gas, he says there is plenty of room for new products and

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services in most sector areas in both Russia and Kazakhstan. There are currency control regulations in both countries. However, these are not particularly onerous and can be comfortably managed through appropriate planning and advice.

“In terms of services, the things that Scotland does well, the export of well-educated human capital to help each country in areas where it does not have expertise, is a space that Scottish businesses can fill.”

There is room for business to flow back in the other direction towards Scotland too.

“There is significant liquidity in certain parts of the Russian and Kazakh economies.

Often businesses will want to diversify their investments outside of the CIS and this creates opportunities for strategic partnerships and investments in Scotland by Russian businesses.”

High-quality brands and trophy assets are on the list of possible buys by businesses from Russia and Kazakhstan.

How do you think Scots are viewed in Russia and Kazakhstan?

“Where people have a view, typically Scots are viewed as trustworthy and straightforward.

Braveheart was very popular in the CIS and so Russians are familiar with Scotland’s

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INTERVIEW

sometimes tempestuous relationship with its southern neighbour! This can sometimes form Russian and Kazakh views about Scots.”

Gregor says that being a GlobalScot is very compatible with his work at KPMG. “I can begin by providing another GlobalScot with some background on doing business. If he or she decides to go ahead with an investment, KPMG can help through the provision of tax advice or other services.”

What does he miss most about Scotland?

“The weather!”

Perhaps he should have added – our wry sense of humour. n

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Whoever said exporting from Scotland is a piece of cake? It isn't. Don't expect your exporting journey to be an overnight success.

Just ask Nigel Patch, who has been building a successful UK business in Edinburgh. He is the managing director of Edinburgh-based Grant Westfield, an 'M' in the SME of small, medium-sized enterprises, with a modern office and manufacturing headquarters, a kick or two from Tynecastle Park, home of Hearts football club, and Murrayfield Stadium, where the dressing rooms were fitted out by Grant Westfield.

Nigel, a gently-spoken Englishman who is an adopted Scot, has grown a traditional

elegant department stores such as Jenners, Forsyth’s and Patrick Thomson, and then later the solid furniture and fittings for Edinburgh’s banks and building societies.

“It was traditional fittings and classic joinery work. Beautiful stuff that is too expensive these days and is rarely used anymore except perhaps in places such as Dubai,” says Nigel, sitting in an upstairs meeting room with the whine of the factory audible in the background.

The firm’s fortunes waxed and waned and during the war the company even ran a Leith shipyard that produced parts for minesweepers. In 1975, the name was

INTERVIEW

management science from Stirling University and has always worked in manufacturing industries running his own metalwork fabrication company aming other businesses.

When the previous director at Grant Westfireld retired, he became managing director in 2000, when the turnover was £2.7 million.

“In my view, the company was a sleeping giant. We were making very high quality products and there was potential for growth.

We needed to invest in our people and their skills and our specialist precision equipment for cutting and bonding, which we have done continually,” he says.

In 1999 Edinburgh Council, in its wisdom,

The panel game

Grant Westfield began as a traditional Edinburgh shop-fitting firm but under Nigel Patch’s direction it is expanding across the UK and edging into European markets. Kenny Kemp talks to him about the export challenges shop-fitting firm into a branded supplier of bathroom and laboratory panels, along with a contracting arm undertaking work in places such as Gatwick and Heathrow airport. With the UK market performing well - and several national budget hotel groups are among Grant Westfield’s latest customers - he has been making tentative moves into exporting. His experience shows just how hard it can be for a manufacturing business to break into overseas markets. He remains a cautious business figure who has worked with his colleagues to build Grant Westfield in a ferociously challenging market place. He is the first to concede that shower panels – which are laminated veneers bonded to a waterproof plywood core - might not sound as exciting as other industries but he is passionate about his company’s waterproof and robust, quality-led products and its ability to deliver value to customers.

The company was founded by Donald Grant in 1881, a shop fitter, supplying Edinburgh’s

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changed to Grant Westfield to reflect its specialism, making furniture for science laboratories and washrooms. Today it is a sizeable manufacturing plant rather than purely a shop-fitting business. It has recently won major contracts to supply and install panels for 18,000 hotel bathrooms across the UK. “The business has two parts: we still do the original specialist shop-fitting side, and call this contracting. Then there is our branded panels.

We are looking at expanding the contracting arm of the business because it has been static for a while, but we have some new products for the market. For example, we also supply all the washrooms for British Airports Authority.”

Turnover this year is expected to be £28m, up from £25m in 2012, up 28%. The target is £50 million turnover in the next five years – with much of this from exporting.

Nigel Patch joined the business 1997 in sales and marketing. He has a degree in physics and

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decided to run its now aborted guided-busway system directly through the site of the old factory, so a modern factory and offices were built, which was a shock because the business rates quadrupled. With 65 employees, many with over 40 years’ experience as wood machinists and joinery, it was time to move towards more modern methods of production.

Today the company employs over 160 people, with four working overseas.

“There was already a small company manufacturing shower panels, so instead of buying that company we decided to produce our own multi-purpose panels. We began with a multiPANEL, which was just a simple 8X4 waterproof shower panel. As the business grew we realised that there were other things we could manufacture and fit within the bathroom and wash room,” he says.

This included waterproof vinyl flooring imported from China, then other wall products and ceilings. From the local manufacturing >>

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base in Edinburgh it quickly became apparent that if Grant Westfield wanted to increase its sales throughout the UK, it needed to market through the merchant network.

“The builders and plumbers merchants are basically, people who sell stuff to people who are fitting their bathrooms and changing rooms. We initially dealt with Jewson’s of St Gobain, then the Wolseley Group, Travis Perkins Group, Grafton Group, as well as independent merchants. Everybody who sells to the trade now sells multiPANEL and as a result makes a good profit, which is why they like to do it. It’s a good margin and they don’t even have to stock it.

Quality service has been at the heart of the supply chain. Careless damage causes a dent to profitability. A chipped or damaged panels delivered by others would be returned so Grant Westfield preferred to deliver their bigger 8x4 panels direct to the customer themselves.

“Our delivery network throughout the country was developed with Scottish Enterprise helping us to set-up distribution depots throughout the UK. We have nine centres from Edinburgh, Livingston and Aberdeen to Basingstoke, Leicester, Wakefield and Bishop’s Stortford.”

The company distributes to 5,000 merchant branches of merchants using over 30 vans, four large lorries and three 40ft trailers.

Scottish Enterprise helped Grant Westfield set up a distribution hub at Dunlop Square on Deans Industrial Estate, which holds stock, then supported the appointment of a logistics manager who has been taken on to streamline the distribution.

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“We have a truck going up and down the country twice a week from Livingston delivering stock to our hub depots. Then we have a fleet of local vans dropping of at a small bathroom shops, builders merchants or whatever. We do all of this logistical work ourselves,” he says.

“Merchants require merchandise. If you are going to buy something, you have to be able to take a sample home to discuss with your partner or family, so a huge amount of merchandise is produced as a result. It is a

fashion product and as such, we change five decors every year which often has implications because, when there are 32 colours to choose from, a decision has to be made as to which colour décor should be changed. Of course the standards remain each year based on high demand and popularity, such as the Classic Marble an old favourite which sells well,” he explains.

Grant Westfield manufactures 5,000 sheets a week and looks all over the world to source the best prices for laminate designs and finishes.

“When you do your bathroom up with expensive materials, you want to make sure that it is perfect otherwise it is going to be a costly experience to fix, involving plumbers and builders. We can’t afford to fit a bathroom and then find something wrong with it. Quality control should be a given and we’ve worked hard on this since I joined the company,” he says.

The game-changer for Grant Westfield has been the development of its own brand called multiPANEL, a plywood core wall panel bonded with laminate.

“This is something that was developed and our customers are asking for it by name. Branding

The ‘know’ to grow It is not difficult to imagine the quantity of planning hours, the volume of decisions and the level of knowledge and expertise required to achieve such success. Although they have different business models and operate in assorted sectors, these businesses have all relied on one key asset to drive their plans forward: knowledge.

Whether it’s intelligence about particular market opportunities; knowhow to address a specific strategic challenge; technical experience in operational disciplines like marketing, HR, finance; or sheer intellectual power to solve problems; knowledge is the backbone of a company’s competitive strategy.

Taking this on board, Scottish Enterprise has recently launched a new initiative called Knowledge for Growth, which provides access to intelligence and insights to help company leaders plan. The ‘knowledge’ is packaged in resources like reports, tools, guides and videos in the Knowledge Hub on www.scottish-enterprise.com and covers five key topics: • Strategy, leadership and organisational development • Innovation • Access to finance • Internationalisation • Business efficiency and new opportunities in the ‘green’ economy There’s more information about the initiative at www.scottish-enterprise.com– and businesses can take advantage of the resources on offer right now.

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We can’t afford to fit a bathroom and then find something wrong with it. Quality control should be a given and we’ve worked hard on this since I joined the company is important. It is all about multiPANEL, but within that, there are branded supporting products such as tilePANEL, polyPANEL, a more affordable plastic panel, and the CLEANpanel, sold to laboratories.”

Grant Westfield has been doing well in the UK market, with 12 reps on the road and the nine distribution depots all making an impact, business has increased by 15-20% year on year.

However, exporting manufactured products overseas from Edinburgh was a completely new ball game.

“To be honest, it’s been a nightmare because I’m very naïve,“ he laughs. “I thought if we can open something in Basingstoke, then we can open in Frankfurt and do exactly the same.

It is not the same: your VAT is a problem.

You can’t simply have Grant Westfield gmb

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because it has to have a separate VAT entity and they are pretty hot on tax.”

Despite being in the European Union, there are different employment laws and this is another hurdle.

“When you are moving manufactured material from the UK, when does it become the other company’s material, and who is taking that margin? We’ve had to cope with all that.”

The strategy to export began three years ago, when Grant Westfield looked at Sweden, where the panelling product originated, because it had a prospective partner. While Scottish Enterprise helped to explore the market, the set-up didn’t go ahead because legislation on building products in Sweden was too arduous and expensive to overcome and the market was just too small. So the exporting focus shifted to the Netherlands and Germany with far larger markets and customer recognition of the panel product.

“The problem is, that the further you go south people say, ‘I’m not putting wood in my bathroom. I’m used to ceramic tiles because we’ve been using them since Roman times’.

In northern Europe, people are more familiar with wood products.”

Two new companies called Ocean Interiors GmbH, and Ocean Interiors nl, based in Huckelhoven, were created and the panels given the name of spaPANEL. “We had to hire Dutch and German speakers to sell it. We had to hire sales people who could speak the language when it was being ordered. So the ramification kept building.

Suddenly, you had a lot of overheads and no sales,” he says.

Scottish Enterprise supported with a business development manager and there was a major marketing push for the products made in Edinburgh and transported to Germany.

“It is important in Germany to have a different name and German address. We’ve ended up with two separate companies, German and Dutch. This has to be set-up, audited and have separate administrations, which again is a big overhead.”

Nigel Patch is acutely aware of the financial drain and investment. Thus far, the exporting drive has been time-consuming and costly.

“But the market is massive and if we are going to look further ahead and grow then

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we need to persevere,” he believes, although his finance director might take another view.

Grant Westfield, in its fourth year in Europe, is only now breaking even. The German bathroom showroom market is conservative, hard to break into with a strong preference for tiles. This is coupled with customer tastes that are distinctly different and so Grant Westfield had to modify its offering. It has been successful with local franchised hotels in Holland and Germany and, as a result, has pushed the style of wooden panels into builders and plumbing merchants. “It has taken three times longer than I thought it would. It is very hard.”

However, Australia and New Zealand are looking like better markets too with several containers sent across, particularly with the rebuilding of Christchurch after the earthquake.

Grant Westfield has continued to innovate, now offering new designs for the laminates and is even experimenting with digital photographic scenes on laminate which could show an infinity pool, a beach scene, a tropical rainforest or cityscape scenes, such as the Manhattan skyline. This has great appeal for hotel groups who are looking for something new for their hotel bathrooms and washrooms.

Scottish Enterprise has appointed a local account manager to assist with new product development. It has also been helping with driving business efficiencies, looking at ways of reducing energy costs. The company, with its largest-scale extraction system, circular saws and computerised machine tools, uses a lot of power and has a £12,000 a month energy bill.

“Being an environmentally aware company and I’m very keen on energy savings. A factory like this takes a lot of power and we’ve made savings of £2,000 a month by using photovoltaics on the roof and an energy modulator,” he says.

Grant Westfield is working steadily on its expansion plans. Nigel Patch and his team can see plenty of market demand – it is now a matter of focusing on the prize, meeting the demand and ensuring that export success is bolted down. n

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Outstanding in a foreign field In its work helping Scottish companies, Scottish Development International has an array of economic expertise operating around the globe. Kenny Kemp takes the temperature of SDI’s directors in Boston, Shanghai, Glasgow

Who is this?

Danny Cusick, president of the Americas for SDI. He is the most senior SDI figure in North America, operating his team of 40 with eight offices, including Boston, New York, Houston, Chicago, San José, Toronto, Calgary and Rio. “From a trade perspective North America still dominates the world’s economy. Putting it into perspective, the United States and Canada combined might only represent 5% of world populations, but it is 23% of global GDP, with the majority of this in the USA.” “While the emerging BRIC markets will

undoubtedly create opportunities for Scotland, it’s important not to forget the importance of the US and wider Americas.

They are significant and dynamic markets.”

The statistics back this up: the US’s GDP is $16 trillion, almost twice that of China, by

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comparison the UK is $2.4trillion.

“From a Scottish perspective, it is by far the largest single export market, with 15% of all our exports going to the US, and worth over £3.5bn. Yet it is such a vast region that it requires a considered game plan because each of the 50 states is the equivalent of exporting to a separate country.”

North America is the largest market for Scotch whisky, which is doing exceptionally well, up 29% over first six months of 2013, up £391m.

While high-quality Scottish salmon is enjoying popularity in the US, with brands such as St James’ Smokehouse doing particularly well, up 36% to £220m.

“We’ve been doing a big push on food and drink, because it has been dominated by whisky. In this market it is about provenance, quality and premium. That is where the real opportunities lie for Scottish companies, such as Innis & Gunn.”

Oil and gas is also doing well, particularly in the Houston area, where SDI has an office where Scottish companies can drop in, and in Calgary in Canada.

“We cover all of the Americas and it is a big challenge. Scottish companies do have to look at where they enter the market. We support around 400 companies a year and have helped them achieve additional sales of £250 million. What we are able to do is bring the market intelligence on the ground to Scottish companies. In America, if you do have a good product or service, people are interested in speaking to you.”

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Who is this?

Julian Taylor is a member of Scottish Enterprise’s leadership team and based in Shanghai. He was talking after the First Minister’s trade mission to China and Hong Kong, which included oil and gas companies.

“The trade missions are an integral part of our overseas investment strategy. It can be the pinnacle of work undertaken by SDI and often it is years in the making. We have to invest a great deal of time to build lasting relationships to prove our worth,” says Mr Taylor.

“It has been a fantastic trip. We have really seen a high level of engagement. We were able to introduce a number of Scottish companies to the Vice Chairman and senior staff of Sinopec, as well as a similar high level delegation from CNOOC, two of China’s major oil and gas companies. These are introductions that form the foundation of future business collaboration.”

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“The visit had wider objectives and the First Minister was able meet senior Chinese government officials to promote a range of issues, such as education collaboration links with Scotland. The core economic development element alone, however, did result in being able to announce trade deals over £40 million.”

This included the Scottish Professional Football League’s £20 million deal signed in Beijing to broadcast football live in China provided

by PPLive TV. The SPFL’s chief executive Neil Doncaster and Celtic’s Peter Lawwell both accompanied Alex Salmond for this announcement. Returning from mainland China, the mission also stopped in Hong Kong to meet the GlobalScot network.

“The First Minister has a lot of credibility in China by being able to say this is his fourth visit in five years. If we look at Germany, their regional landers are also over in China fairly regularly. Scotland has to be seen to do this too,” he says.

“What Scotland is doing is impressive and we have to build on these relationships. You can’t be in it for a quick buck, you have to understand how Chinese culture and business works. This is an important message to get across. It is about building relationships.”

What is Julian’s role?

“I’m part of the leadership team for Scottish Enterprise. I work closely with Lena Wilson and our chairman Crawford Gillies. I have been the director of strategy for a number of years in Scottish Enterprise. We’ve done a lot of work to improve the way the organisation works,” he explains. The real challenge is to drive the ‘international agenda’ to build exports.

“We need to make sure that every single company we work with and every member of our staff and all of our partners are constantly thinking about the international agenda.”

A strong signal for this was sending Mr Taylor out to work in China, the most dynamic economic region in the world. He has moved his wife and family out to savour the experience.

“Here I am. It has been a fantastic opportunity and a real privilege with great staff. It is a statement of intent on behalf of Scottish Enterprise sending a senior member out into the field.”

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He says this helps Scots at home understand that it is not just the people out in the field who are doing the international stuff.

“There are huge opportunities throughout the region. We are off to India in the coming days to fly the flag and our region stretches to Australia too, where there are great opportunities for Scottish firms.”

Who is this?

Mark Hallan, senior director for Europe, Middle East and Africa, for SDI. He has been overseeing a mission to the Gulf states, led by Humza Yousaf, Scotland’s Minister for External Affairs.

“We’ve had an office in Dubai for four years.

We have a team of four co-located in the British Embassy. While it’s obviously pretty busy in this competitive landscape, it is all good stuff for Scotland,” says Mark Hallan.

He was speaking to BQ as Humza Yousaf, Scottish Minister for External Affairs and International Development, arrived in the Gulf on a trade mission. The Scottish politician was leading Scotland’s largest delegation to date to date to the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), with over 40 Scottish companies and Higher Education Institutions represented at one of the largest oil and gas events in the world. The event, which ran 10-13 November, was opened by Sheikh Khalifa Bin Zayed Al Nahyan, President of the United Arab Emirates. Mr Yousaf met with the UAE Energy Minister, H.E Suhail Mohammed Al Mazrouei, and with the President of the Abu Dhabi Petroleum Institute and to date six Scottish companies have signed new deals with Middle Eastern partners as a result of their attendance. The Minister also delivered a speech and participated in a conference

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panel discussion on the importance of skills and training in the industry, referring to Scotland’s pipeline of skills from apprenticeships through to the recent announcement by the First Minister of the Energy Skills Initiative, part of this being the education of school children about the opportunities in the oil and gas industry.

“Our links with the Gulf States are no more evident than in the oil and gas sector and there are significant opportunities for Scottish companies to collaborate with local partners to share their expertise in a growing market.

There are also opportunities in renewables, including solar energy, with Middle Eastern countries seeking to diversify from hydrocarbon dependent economies. There are Scottish business opportunities in the sphere of decommissioning of platforms in the Gulf too.”

Following the Minister’s visit to Abu Dhabi, he travelled to a series of meetings in Dubai and Qatar. He visited Heriot-Watt University’s campus in Dubai, which formally announced the launch of PhD programmes from the School of Management & Languages, School of Engineering & Physical Science and School of the Built Environment.

“We see the Gulf cities competing in education and Scotland can benefit. We have a strong reputation in education and the Heriot-Watt announcement highlights the value that other nations place on Scotland’s knowledge, skills and expertise. Graduates of HeriotWatt’s Dubai Campus are already making a contribution to industry in the UAE and by collaborating with Dubai we continue to make it easier for Scottish companies to trade across the region,” says Mr Hallan.

Food and drink companies, with high quality produce made from environmentally sound ingredients, are also making waves.

“This is where we are seeing a lot of interest.

We had 20 Scottish companies attending Gulfood, the world’s biggest annual food and hospitality show, held in the Dubai World Trade Centre, in February this year.”

He cites Taste of Arran, a collaborative venture for ten food and drink companies from the island in the Firth of Clyde. The companies, including amongst others The Arran Brewery, Isle of Arran Distillers, Arran Fine Foods, Arran Chocolate Factory and Creelers >>

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Smokehouse, went out to Dubai to exhibit their local produce.“We did market research for Taste of Arran, so they could understand the market opportunity and how to do business in the region.”

While they were in the region, Scottish Development International used their connections to introduce Taste of Arran to a GlobalScot Guy Crawford, who was chief executive of the Jumeirah Hotel Group, head of a group of more than 20 luxury hotels across three continents, including the iconic Burj Al Arab, before he retired in April 2012.

“Guy introduced Arran to some of his chefs and purchasing colleagues and as a result of this, they picked up their first contract in the region to supply cheese to this premium-end hotel group.”

This is an example of how the GlobalScot network in the Middle East is among the most active in the world, according to Mark.

“There is a core group of about 40 and almost every week they are providing advice and direction to Scottish Development International and to Scottish companies. This is everything from the fundamentals of how business is done in the Middle East, through to opening up their contact books and making introductions to Scottish companies, either through their own companies or to organisations where they have connections.”

Who is this?

Nicola Sartini, Country Manager in Rio De Janeiro, Brazil. With the football World Cup next year and then the Olympics in 2016, there are opportunities for Scottish companies to look at this market.

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“I joined SDI six years ago in the Paris office covering the energy and financial services sectors. I came to Brazil to run the operations for Brazil and Latin America in September 2013, although the office was launched in March,” he says.

Nicola worked alongside Anne MacColl in the Paris office, where the focus was on Europe and the Middle East. Now working in Brazil, the connections are with the North American office.

Brazil is not entirely new to Scottish companies. Over the last 20 years there has been a trade mission almost every year, including missions on education, Scottish textiles, and food and drink.

However, oil and gas is the exciting opportunity for Scottish firms. In March, 25 Scottish companies attended a week-long showcase in Brazil, under the SDI banner.

“This was a great opportunity for the firms to understand this booming market,” says Nicola.

What kind of opportunities does he see in Brazil? “Brazil has huge ambitions when it comes to oil and gas development. The country produces two million barrels a day, and it wants to take that to four million a day by 2020. The target is for five million a day.

This means there is tremendous opportunity for investment.”

There have been major ultra deepwater discoveries of high pressure, ‘presalt’ oil off the coast of Rio De Janeiro. Petrobras, the Brazilian national oil company, is currently producing around 2 million barrels per day and plan to reach 4.2 million bpd by 2020.

Including natural gas, the production will reach 5.2 million boed by 2020 “This shows the size of the market it is going to require. It is very deep oil reserves, so Brazil is going to need lots of deep water construction and subsea technologies which has been developed in the North Sea and Aberdeen.”

He says there are a lot of synergies with Scottish companies, such as Wood Group, Bowtech, Hydrasun, Albin, Weir Group, TRAC Oil and Gas, operating in the North Sea and Brazil is the natural extension for them to export their skills and know-how to Rio.

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“These discoveries and the ambition of Petrobras and the Brazilian government to grow is opening a lot of opportunities, especially in sub-sea and deepwater construction.”

The Scotch whisky industry has a popular footprint in this party-loving country.

“Last year it was the fastest growing market.

Johnnie Walker Red Label is slowly with the growing middle class there is growth of the single malt and premium blends.”

The World Cup and the Olympics in 2016 will put Brazil in the global spotlight.

“All the infrastructure projects present opportunities for Scottish companies. It is a very important time for companies in ICT, construction and engineering services to be coming here, especially those in niche product areas of specialist engineering,” he says.

Brazil has linked up with the UK Government to get the most of the London 2012 experience and best practice. “There is probably a bridge to be built between Glasgow 2014 and the Commonwealth Games experience and Brazil. Some of the best practices will be shared with Brazil.

We hope to maximise this by linking this up.”

SDI’s Rio office is also the hub to springboard into the rest of South America, with Chile among the main targets for trade missions, especially in marine and tidal.

“Latin America as a continent is 3.5-4% growing per annum. This is a growth continent. So if you look at all these markets, you need to make sure we cover them in the best possible way. Colombia is another market that is growing fast and the UK has been trying to improve its relationship with the country and support British companies,” he says.

What advice would you give to Scottish companies? “When you come you have to come and stay. It’s not for a quick deal where you stay a couple of years and go. If you want to be successful you need a long-term strategy. The business culture relies on strong relationships in Brazil built up over time. You need a local presence and to invest time. Do your research and homework and use SDI for the market intelligence.” n

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>> A course where language is never a handicap Lauren McQuade’s firm offers a joyful blend of golf, whisky, culture and teaching English to overseas visitors. Kenny Kemp found out how English at St Andrews wants to invite more German guests to sample her services

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Ask Lauren McQuade why she is targeting the German market and she is clear about her objective. Visitors from Germany are Scotland’s second largest market and 58% of Germans say their motivation for going on holiday is to learn about new cultures and different ways of life.

“We interpreted this as very positive and a good reason to target Germany. When we considered our possible markets we looked at the level of affluence, the number of golfers, the general ability to speak English and an interest in coming to Scotland. Our market intelligence showed that golfers across Germany tended to be from more affluent backgrounds and there were a high proportion of female golfers.”

Lauren, the managing director and trainer at EASA, admits progress in Germany has been slower than in other markets, and puts this down to the importance of building relationships.

“It takes time. We are not about ‘quick sales’.

We want to build great relationships, so people want to come back,” she says.

“I can’t lie. At times it has felt a little bit like an endurance race! It has demanded a consistent physical presence, dedication and a degree of flexibility on our part. We have had to listen hard to what the market wants, and we are only now, after two years, starting to make notable progress.“ However, she believed that it is a market with great potential and it is worth persevering.

“We respect that the German market needs to know and trust us and this takes time, but we are in it for the long haul.”

EASA has created a new product to offer to the German market our ‘English Communication Service’ – an online service which assists companies with their English language skills. This lower-cost product has been of more interest to a number of companies in Germany and opened doors.

“A significant achievement for us has been winning Bayer Pharmaceuticals as a client. Due to the massive scale of their business we could effectively run the service for Bayer alone. We have also had some initial interest

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from them in our range of English training experiences at St Andrews,” she says.

“We need to show them that our service can add value to their business. If we can do this as well as demonstrate that we have what it takes to be a reliable and trustworthy partner, then I believe we can be very successful in Germany,” Her priority now is to explore Germany’s ‘Mittlelstand’ companies, the bedrock of the successful German economy. These small to medium sized companies are less constrained, yet they need good English communication skills to conduct their business with the rest of the world. Lauren says it is easier to get in front of the managing directors who make the decisions on how and where to spend their budgets.

“The German market is a lot more pricesensitive than say the Swiss market. We now understand the value of relationship building in Germany and we believe that if we continue our commitment to the market we should be seeing real results within the very near future.”

Lauren says SDI in Germany has given invaluable support over the past two years, providing market reports information, contact and introductions – most notably to GlobalScots – and information about trade fairs and events.

A British Embassy contact in Germany told Lauren ‘the German market is a tough nut to crack. You have to persevere. A lot of companies give up because they don’t get quick results. You just have to hang in there and keep at it.’ That, she reckons, was an excellent piece of advice. n

>> EASA does it English at St Andrews (EASA), established in 2010, combines formal English language training with the opportunities to sample three of Scotland’s best assets – golf, culture and single malt whisky appreciation. EASA is working in the executive and luxury travel market and conducts its training at the five-star Old Course Hotel, Golf Resort & Spa in St Andrews.

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>> What you need to know about Germany’s exporting success Scotland’s aspiration is to increase its exports – so what lessons can we learn from Germany, Europe’s leading exporting nation? Nick Terry, who has recently spent several years working in Germany, looks at the power of the Mittelstand While Germany is renowned for its brilliant exporting brands – we all know Mercedes, Volkswagen, BMW, Bosch and Siemens - the hidden

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powerhouse of the economy is the thousands of companies known as the Mittelstand.

Germany, the second largest global manufacturing exporter, is a prime example of how an economy can succeed largely based on the applications of advanced technology and the continuous improvement of manufacturing processes. While the relationship between Scotland and Germany continues to strengthen in both business and in culture - demonstrated in a new air direct route from Edinburgh to Hamburg - there is much we can learn from observing German industry at closer quarters.

Of course, Germany already plays a significant role in Scotland’s economy. The European economic power is Scotland’s fourth biggest trading partner. According to Scottish Development International, Scotland exported goods and services worth £1,265 billion to Germany and over the last few years, as much as 20% of foreign direct investment in Scotland also came from Germany.

Investing long-term in Scotland’s coastline and rugged topography is something that German companies, such as Siemens and AREVA, are keen to undertake in support of renewable energy projects involving wave energy and wind turbine developments. Importantly, these developments are in tune with Scottish Government policies and objectives to be selfsufficient in renewable energy.

Germany’s exporting prowess is ingrained into its culture. Its resilience during the recession of 2008 was a result of its strong small to medium sized, often family-owned, manufacturing companies, collectively known as Mittelstand. This sector accounts for 60% of the workforce and 52% of the country’s GDP. It is an economic marvel which is difficult to replicate because it is part of Germany’s tradition and culture.

But what can Scotland learn from the Mittelstand phenomenon?

• Companies are highly focused business models often concentrating on single product or product-line, which as a result is of a consistently high quality; • By diversifying internationally, companies have enjoyed great success economically; • Companies benefit from a strong and highly regarded apprenticeship system;

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• Companies are export-orientated or supply to firms who are export-orientated; • Companies focus on high-value manufacturing and innovation; • Companies are typically privately owned and are based in small rural communities.

Business in Germany is a constructive enterprise that aims to be socially useful. Profit making is not the end goal in itself, instead, creating jobs, satisfying clients and the high quality of products make-up the fundamental values of a Mittelstand company.

A debt free mind-set, ingrained into business leaders, adds value to the ethos of earning trust from employees, customers, suppliers and the society as a whole. The firms are not looking to sell out at the first opportunity but build for the next generation.

There are also higher levels of respect between employer and employee, a partnership which ensures both parties’ interests are protected.

Greater job security comes as a result of employees being more flexible with working hours and wages, rather than demanding increased remuneration which the company perhaps cannot afford.

Mittelstand companies, as a result of being privately owned, are free from the pressures of stakeholder’s quarterly or annual reviews, and this enables them to focus on the future and build for the long-term. This is particularly important when considering the countries’ exporting success, aided by continuing large investments in research and development which in turn leads to fresh innovation and the opening up of new opportunities.

Supplies of components and other products come by way of trade missions, these assurance tours are offered to suppliers’ representatives as a result of a close working relationship with them. This has proved invaluable in terms of providing a service that minimises any uncertainties with regard to delivery, quality, efficiency and excellence more widely.

A decentralised economy and political system, enable banks, businesses, entrepreneurs and politicians to know and understand each other more closely thus making everyday relationships and co-operation easier and more productive. It is also compulsory for businesses to join their local chamber of commerce and

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this gives these organisations greater strength and political clout.

As Scotland places more emphasis on international business, we can see that Germany, as an advanced manufacturing economy, works hard to invest in untapped markets outside of Europe.

Since the Second World War, Germany has also invested heavily in vocational engineering skills and the promotion of the profession. The ‘Herr Engineer’ in Germany is still given his or her place along with doctors, lawyers and senior business people. In contrast, vocational skills have been relegated in importance over the years in the UK. It has taken a reversal to understand that a suitably skilled workforce that meets current and future challenges requires long term and sustained investment.

A better understanding of future market and product priorities is necessary to identify the key skills required and the ones which education and training can develop. An enlightened partnership between education and business has been the central spine of Germany’s sustained manufacturing success.

That same outlook has only just begun to pay dividends in Scotland, but more is required. South of the Border, the network of University Technical Colleges, for 14 to 19-year olds, is encouraging those who will be the next generation of designers, engineers and manufacturers. This investment in technical schools academy should certainly be considered in Scotland.

In all, the Mittelstand model resonates now more than ever, especially in the aftermath of the credit crunch which exposed poor leadership skills within a service-driven economy in the UK. However, with business confidence within the manufacturing sector more buoyant, there are already signs that embracing new skills and technical know-how together with improving management staff relations are delivering better results. Such partnerships between companies, further and higher education establishments and government agencies are crucial to the future well-being of the Scottish economy and the creativity, work ethic and pride of the people who depend upon it. In so doing, they will be a step nearer to emulating the Mittelsand model. n

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>> Why Scotland will be at the World Cup in spirit Our footballers might not have made it to Brazil but our worldclass Scotch whisky industry will make it to the finals. Rosemary Gallagher explains why our national tipple is on top While a late resurgence in the World Cup qualifying rounds was not enough for Scotland’s national football team to progress to the finals, the country will still be represented in Brazil next summer.

Scotch Whisky is an iconic product in Brazil, as it is across Latin America, and, in fact, most of the world.

The figures speak for themselves: Brazil is now a top ten market for Scotland’s national drink; direct exports of Scotch Whisky to Brazil were

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CASE STUDY worth £84 million last year, soaring more than 250% in the last decade and Scotch is now the UK’s sixth largest export to Brazil.

Direct exports of Scotch to Central and South America reached £505m last year, up 3% from £489m in 2011. But with Scotch still a relatively small part of the spirits market in these countries, there is great potential for further growth.

As in many emerging economies Scotch is increasingly becoming the drink of choice for aspirational young professionals. And Brazilian consumers defy any misconceived stereotypes of a Scotch drinker.

Research carried out by independent consultancy TNS for drinks firm Diageo painted a picture of a typical whisky drinker in Brazil as someone who is 25 to 34 years of age, earns a relatively high income, drinks with friends at their houses or at parties and is seen as sophisticated and stylish. And, perhaps surprisingly for those with a traditional view of Scotch Whisky consumers, some 36% of whisky drinkers in Brazil are women.

Half of those taking part in the research said whisky is their favourite alcohol drink. It is consumed responsibly with 73% saying they drink it more slowly than other beverages, partly because of its high quality. While the majority prefer whisky just with ice, it is enjoyed in lots of different ways with many mixing it with coconut water to drink alfresco to cool off in the Brazilian sunshine.

One of the reasons for this growth in popularity of Scotch in Brazil is the good >>

Direct exports of Scotch Whisky to Brazil were worth £84 million last year, soaring more than 250% in the last decade

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work of Scotch Whisky companies in marketing their products in innovative ways to appeal to a wide range of consumers.

It is also a result of changing economics and demographics in recent years. Although economic growth in Brazil slowed to 0.9% in 2012, it is expected to reach around 2.5% this year. That better performance appears to be supporting higher exports, with the value of Scotch shipments to Brazil up 42% in the first six months of this year to £49.5m compared with the same period in 2012.

However, with Scotch only representing 4% of the total spirits market in Brazil there is still significant room for growth and for trading conditions to be improved. There are great opportunities to be grasped in expanding cities, such as Sao Paulo and Recife where Scotch is already gaining popularity. Analysts say that Brazil, with its young, increasingly affluent population is hitting a ‘consumption sweet spot’ and such willingness to spend bodes well for Scotch in the future.

But barriers to entry into the market must be tackled if that potential is to be realised. Such barriers include complex tax arrangements, a 20% tariff and the ‘Custo Brasil’ - regulatory challenges which are part of the cost of doing business in Brazil.

Progress with the European Union-Mercosur Free Trade Agreement (FTA), currently being negotiated, would help tackle these issues in Brazil, as well as in Argentina, Paraguay, Uruguay and Venezuela which are part of the Mercosur trading group.

Another step forward would be success in registering Scotch Whisky as a Geographical Indication (GI) in Brazil to recognise Scotch as a product that must be made in Scotland and provide extra legal protection. Scotch is already recognised as a GI in more than 40 countries, including the whole of the European Union, and an application for this status has been made in Brazil.

Scotch exports to other parts of Latin American have been given a boost this year with the completion of a number of successful trade negotiations which should help build market share.

In August the EU’s FTA with Colombia and an Association Agreement with three Central American countries - Honduras,

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Nicaragua, and Panama - came into force.

These agreements create a more level playing field for Scotch Whisky imports by removing tariff and non-tariff barriers to trade.

The agreements included a number of benefits for Scotch Whisky producers. Advantages of the agreements included an immediate end to the import tariff in Panama and gradual tariff elimination in Colombia and Central American countries. Colombia will reform its discriminatory excise tax on spirit drinks by August 2015 and its provincial liquor monopolies will have to treat imports in the same way as domestic products. Scotch Whisky is recognised as a GI in each country.

Additionally, national treatment rules are helping to secure the end of discriminatory tax arrangements.

In Peru, the trade agreement came into force in March, resulting in immediate tariff elimination and protection for the Scotch Whisky GI. The benefits to trade have been extended to Costa Rica and El Salvador and Guatemala is expected to follow suit in the coming months.

The SWA worked hard with the UK Government and the European Commission to ensure these agreements will significantly improve the trading environment for Scotch Whisky.

The Scotch Whisky industry is geared up to meet the growing demand from Brazil and other markets across the globe.

It is clear there is optimism about the future with £2bn of capital investment in infrastructure committed by producers of Scotch over the next three years.

A number of new distilleries have been opened, or are planned, and older ones are being brought back into use to meet rising demand.

Let’s hope that such confidence and success is reflected on the football pitch in time for Euro 2016 in France. That will help build on the Auld Alliance and France’s position as the biggest overseas market by volume for Scotch. n Rosemary Gallagher was a national newspaper journalist and is now communications manager with the Scotch Whisky Association.

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>> The Glorious Mud Games Swamp Soccer was invented in Scotland – its 24 minutes of it’s down-in-the-dirt mayhem. Kenny Kemp speaks to Stewart Miller, the founder, who is taking the sport around the globe Stewart, tell us about Swamp Soccer?

“Swamp Soccer as a business is about taking advantage of the most popular global game and adding a twist. It is simply football played in a swamp. We host the Swamp Soccer World Cup every year in Scotland, on the last weekend in June. We have an all-male league, a mixed league and an all-female league.

Because it is an extreme form of football each match lasts only 24 minutes in total. It is six-aside played on pitches the size of five-a-side.

Teams can have as many substitutes as they wish, fancy dress is encouraged, and fun is the main theme.”

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working with local partners. Brazil is one of our key target markets for the future. From a self-interest point of view, I would like to visit Brazil in June 2014!

It all sound good unclean fun? Can Scotland be world champions?

“Scotland were the world champions in 2006, which was our first year. Since then world champions have come from England, Belgium, Russia and other countries. We normally have teams representing circa 20 countries. The competition is open to all adults.”

Your business is growing well, how have you managed this?

“The UK event has grown organically.

Competition in the UK to attract visitors and participants is very intense for events. I read somewhere that the UK has more events per head of population than anywhere else in the world. However, we have a unique offering and this makes us stand out from the crowd.

And Swamp Soccer is a barometer of the wider economy?

“You could say that! The recession, which kicked in in 2008, has had a slightly negative effect on the event. However, more recently we have noticed a definite upturn in the economy, coupled with improved optimism, so we're back in expansion mode again.

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The last time Germany played England at our UK event, Germany won 5-1

What has your export journey been like so far? I understand you're going to Brazil next year?

“There has been extensive global interest in having swamp soccer in different countries.

We realised this demand so we trade marked the words ‘Swamp Soccer’ and our logo in key overseas markets, to add to our UK protection. In the last three years we have established Swamp Soccer China (Beijing), Swamp Soccer Turkey (Istanbul) and Swamp Soccer India (Mumbai), each time

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What kind of market do you think there might be for you? Do you think we might get Germany versus England for example?

“We have a target of establishing 25 events worldwide by 2025. So far we have UK, Finland, Sweden, Iceland, China, Turkey and India. The US is also a market we wish to enter, along with Australia, New Zealand, Japan, Russia and many others. The last time Germany played England at our UK event, Germany won 5-1.

What kind of help have you needed from Scottish Enterprise?

“Scottish Development International has been of great assistance to Swamp Soccer in overseas markets. For example, when we identify a potential partner the SDI local office can visit this partner first, to instigate some basic due diligence for us. They have also assisted with simple things, like translating my business card from English to Mandarin. SDI has also included us in overseas Ministerial visits. For example, in markets such as China an invitation for our local partner to meet with our First Minister of Scotland is a tremendous boost to our relationships and development.

Personally, I think SDI is one of the best Scottish institutions we have. The organisation has a ‘can-do’ attitude, which I like and can relate too.

Is there one thing you've learned that you might be able to pass on to another business thinking about exporting?

“Do your research first and if you wish to develop an overseas market, get out there and visit it. Potential partners and customers will know you are serious if you take the time and effort to visit them. I have always been welcomed with open arms because I visit the market very early in the relationship. Also seek advice and assistance from organisations such as SDI and fellow exporters. Most importantly, enjoy it! Meeting and working with people from different cultures and backgrounds is interesting. n

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Thistle do nicely

Julia Rennie, a director of Thistly Cross Cider, shares her export experience. She spoke to BQ down on South Belton Farm, near Dunbar, in East Lothian When and why did you set up Thistly Cross?

“Thistly Cross was established in time for the autumn harvest of 2008. By this time, my father, Ian Rennie, as part of Belhaven Fruit Farm and Belhaven Smokehouse, had been developing complementary food companies for a number of years. Thistly Cross simply slotted into an existing business framework and the emerging Farmers’ Market boom of the late noughties.”

What have been the challenges for you?

“The greatest challenge has been simply to keep up with the rate of expansion. As Thistly is a small fish in a big competitive pond, we have had to try and stay ahead of the business, on top of the production, and open to the challenges of a small to medium business.”

How difficult was getting the production going?

“Thistly Cross had been building up the relevant contacts and necessary technological knowledge for several years, prior to going into production in October 2008.

Since then, we have had to create a robust and dynamic production process to keep up with increasing demand.”

Where do you source the apples?

“To be successful in the cider industry, it is necessary to have a good supply of quality ingredients. Likewise, when building a business, it is necessary to have a variety of resources to be able to keep up with demand.

Luckily for Thistly Cross, over the last couple of years, we have been able to gain both a strong foothold in the established UK network of suppliers to the cider industry and an

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increased reputation in Scotland for sourcing local apples.”

Do you feel there is a good market for you?

“In many ways, Thistly has had to create its own market for premium ciders. We still have much work to do educating consumers, building up demand, promoting the brand, working with retailers, establishing relationships with good partners and distributors. Thistly has not been content to remain as a niche product but would very much like to be a part of the emerging premium mainstream – an influential marketplace where consumers expect the best.”

How have you gone about your exporting?

“We focused on building a strong presence in our local market at the start. Over time, demand came from further afield and opportunities presented themselves overseas that we started to explore. We have been exporting for just over two years now and focus on working with distributors/agents that have a reputation for quality and a genuine passion for the products they represent.”

Which markets have you gone into?

“Our current export markets include the United States, where we are in 42 states, Canada, Russia, Finland, Germany, Poland, Latvia, Estonia, Hong Kong and Australia.”

How have Scottish Enterprise helped you?

“We have attended various workshops aimed at helping Scottish businesses work with overseas partners. SE has also supported us

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with research projects and access to new markets. SDI’s representatives have been invaluable providing local information and translation when necessary!” n

Thistly has not been content to remain as a niche product but would very much like to be a part of the emerging premium mainstream – an influential marketplace where consumers expect the best SPECIAL REPORT | WINTER 13

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Why Rainbow Technology is getting to know China In the sphere of imaging and printed circuit board technology, Scotland has world-leaders in design and manufacturing who are reaching out to the massive market in China. Nick Terry talks to Chris O'Brien “Getting to know you – getting to know all about you,” trilled Julie Andrews in the King and I. Yet this might be a catchy motto for Scottish firms who want to break into China.

One such firm is Rainbow Technology Systems, based at Hillington Park, who have invested a great deal of time and effort in taking their unique printed circuit board (PCB) imaging system and products to mainland China.

Chris O’Brien, sales and marketing manager, has recently been to Hong Kong with members of his team and he reckons regular contact gives a first-hand impression of his changing market.

“Our reason for going to Hong Kong is actually to link up with our distributor before heading in to meet with potential customers in China.

It tends to be convenient for flights and as our distributor is based out of Hong Kong it works well.”

The team of Jonathan Kennett, the chief executive officer; John Cunningham, the chief chemist; Robert Gibson, chief mechanical designer; and Loretta Campbell, accounts and sales manager, along with Chris O’Brien, run the company in Scotland, part of the Teknek group. But with Glasgow Airport on their doorstep, the best way to keep a weather eye on the shifting market place is to jump on a plane and head east.

“The potential for business in Hong Kong for us is actually now very low. In years gone by there was a large PCB manufacturing base there, but it has almost all moved into mainland China. Our main potential customer base of PCB manufacturers in China tends to be around the Shenzhen, Dongguan and Guangzhou areas, as well as Shanghai and Suzhou further north. Our distributor has offices in all of the areas of interest.”

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Mr O’Brien’s most recent trip was to meet with potential customers in the Shenzhen area and agree technical and commercial terms for the first sale of the Rainbow Process Line system into Asia. The process line is a self-contained clean environment where copper panels are processed automatically through the stages of coating, imaging, developing and rinsing.

“This was a very successful meeting and we expect to receive an order in the coming days.”

How have Rainbow Technology Systems managed to stay ahead in this competitive field? “There are really two sides to this: aligning our products to a market requirement, opening and then getting the word out and setting up sales and distribution channels.

For the former, we took our central idea and moulded it to fit a segment of the PCB manufacturing market, packaging the equipment and process in a way that will appeal to the end users. For the latter, we have attended a lot of industry conferences and trade shows, and established relationships with industry organisations and institutes that have led to introductions to recognised distribution partners,” he said.

Rainbow’s target is the high volume PCB manufacturer based in China, so exporting

Asia obviously brings a number of challenges: not least the distance, time difference and languages

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is essential - almost 100% of the business is outside of Scotland.

“Most of this market is based in Asia, the key countries being China, Taiwan, Korea and Japan. Selling into Asia obviously brings a number of challenges: not least the distance, time difference and languages.”

The solution is to find a reliable distribution partners who can link Rainbow Technology to the end-user companies.

“Once our brand has been established and the equipment proven, there is potentially a huge market in Asia that we can sell to. We also have plans to develop new product lines that will allow us to cover other market segments as we continue to grow the company,” said Mr O’Brien. There are also additional products on the horizon to open the door to the lower volume, high value PCB manufacture in the UK and Europe. Rainbow Technology has benefited from help and guidance throughout from Scottish Enterprise. This included an International Strategy Development Workshop which was a key milestone on the journey.

“We really took time to look at the possibilities ahead of us and focus on what we could do to get to market with the biggest impact in the shortest term. We have also been very careful to pull in additional resource as it has been required, adding the required skills to our team in a timely manner,” he said.

Mr O’Brien is clear that to be successful in exporting it is crucial to establish good distribution channels with companies who are on the ground, know the territory and speak the language. Spending time to find the right partners and establish a good working relationship is time well spent.

In short, ‘Getting to know you,’ is a motto to remember. n

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