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SPECIAL REPORT: EXPORTING and INTERNATIONALisation making pay, pay The payroll business that became a global success a tasty prospect Scotland’s food and drink industry spreads its wings and the winner is... A round-up of firms nominated for the Scottish Export Awards


Expand your knowledge of international markets Is there an opportunity for your product or service outside of Scotland? From planning your strategy and building export skills to finding new markets and setting up overseas, you can find all the assistance you need, whatever your size or sector. Find out more at www.scottish-enterprise.com/exporting

KNOWLEDGE FOR GROWTH


CONTENTS

CONTACTS

05 news

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

The latest in the fields of export and internationalisation

08 making pay, pay The book-keeper who turned a payroll business into a global empire

16 a tasty prospect A world of opportunities await Scotland’s food and drink industry

18 thinking globally Help is at hand for firms seeking to make inroads in the exports market

22 and the winner is.. A round up of firms nominated in the Scottish Export Awards

42 going for gold How the Commonwealth Games will create business opportunities

48 asia calling How India could prove a lucrative market for Scottish businesses

50 Brand awareness Why it is vital to protect intellectual property when trading globally

Middle Eastern promise

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SPECIAL REPORT:

EXPORTING AND INTERNATIONALISATION

WELCOME Welcome to BQ2 and our Special Report on Exporting for Scottish companies. The world is open for business. Yet it can be daunting for companies considering international markets to know exactly where to start. The good news is there is a wealth of help out there. Scottish Development International’s Smart Exporter programme is a great springboard to help companies progress their international ambitions and provides access to SDI’s wider network of expertise and on-the-ground advisers around the world. Inside this edition, Alison Sellar, a GlobalScot Trade Mission Ambassador, and founder of activpayroll, explains why joining a trade mission often gives the vital stimulus a company needs to take those first steps into a new market. She reckons that if a business does its homework, targets the right markets and is prepared to take the plunge, the rewards will follow. We’re also delighted to reveal a selection of nominated companies up for the inaugural BQ Scottish Export Awards. It is proof that there is no shortage of innovation across Scotland. Read more about these companies inside. Which reminds us, if you haven’t booked your place for the export awards on 28th May in Glasgow, there is still time. Jackie Malloy on 07968 146605 will be delighted to help.

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EditorIAL Kenny Kemp Editor e: editor@bq-scotland.co.uk Ken Symon e: ken@symonmedia.com Nick Terry e: editor@bq-scotland.co.uk 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 © 2014 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, March 2014. room501 Publishing Ltd is part of BE Group, the UK’s market leading business improvement specialists. www.be-group.co.uk

BQ Magazine is published quarterly by room501 Ltd.

SPECIAL REPORT | SPRING 14


ON THE RECORD

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From novice to expert, build your skills and knowledge to grow your business in international markets

1. Market research Do I have a market for my product or service overseas? Who is my customer overseas?  What is the right market? 

2. Routes to market How do I reach my customers in these markets? What is the right route for my business?

3. Sales and marketing How do I market my product or service overseas? What are the cultural considerations?  Do I translate my website? 

4. Export pricing How do I price my product or service for international markets? What things should I consider? Have I covered all my costs including shipping duty? Is my price right for this market?

5. Contractual issues and logistics How do I ship my product to buyers overseas? Do I understand what export documentation is required? 

6. Export strategy Do I need to consider developing an international export strategy to help me focus on the right opportunities?

Visit www.scottish-enterprise.com/international

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EXPORTING AND INTERNATIONALISATION


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NEWS

Scots producers get set to go global, £10m innovation hub will pair up universities and industry, Weir Group lands £59m contract in Iraq

The sector has experienced tremendous growth in recent years

Anne MacColl, chief executive of Scottish Development International

>> Feeding the world Scotland’s food and drink will be available across the world under a plan for a massive push on international exports. The total value of overseas food and drink exports has already increased by 52% between 2007 and 2012 – with exports of Scotch Whisky rocketing by 87% in the decade to 2012 to £4.3 billion. The new Scotland Food & Drink Export Plan, developed by the industry and government, aims to capitalise on success by focusing on 15 key export markets. A team of global experts will be deployed in the seven priority markets - North America, France, Germany, the Middle

EXPORTING AND INTERNATIONALISATION

East, China and Hong Kong, Japan and South East Asia - to open up opportunities to drive international sales for Scotland’s food and drink firms. The Scotland Food & Drink Partnership – the Scottish Government, Scotland Food & Drink, Scottish Development International and the main exporting trade associations – have drawn up the strategy together, and each has contributed towards the £4.5 million in funding. Food and Drink Secretary Richard Lochhead said:“From Beijing to Brussels, New Delhi to New York, Scotland’s food and drink is going

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global. The sector has experienced tremendous growth in recent years – in fact, if the current rate of growth continues then we will have an export rate similar to that of the North Sea oil and gas industry. That is remarkable. But we can do so much more. The quality and provenance of our food and drink is second to none and is a key selling point. “We know there’s a massive global appetite for our premium, iconic products and now is the time to make the most of that and build the Scottish brand and reputation.” Scotland Food & Drink Chief Executive James Withers said: “We shouldn’t for a minute underestimate the significance of this plan. This is about industry leadership and making a giant stride towards internationalising a whole sector of Scotland’s economy. Whisky has been a global trailblazer for Scotland and this plan is about supporting the rest of the food and drink sector to follow in its footsteps.” Anne MacColl, chief executive of Scottish Development International, said: “With export sales of £5.4 billion in 2012, there’s no doubting the economic success of our food and drink sector but whilst our growth is impressive, our collective ambitions are greater still. “The dedicated new team of global experts will enhance the existing work of Scottish Development International’s teams worldwide and forge unprecedented opportunities for food and drink producers to take their products global. We are excited to be working with our Scotland Food & Drink partners to support the industry’s growth ambitions by focusing on those markets which can deliver the biggest return for Scotland.”

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NEWS

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of future significant economic growth for Scotland in this technology area. There are already around 140 companies working in SIS in Scotland, contributing around £2.5 billion per year to the Scottish economy. CENSIS is the first major initiative in the sensors area between universities, companies and their customers during early stages of new product development. CENSIS moves to the Inovo building at ITREZ, Scotland’s International Technology & Renewable Energy Zone in George Street, Glasgow, later this year.

>> New wave of investment for renewables sector Scotland’s wave and tidal sector has received £2 million after an ambitious project was awarded funding from the Renewable Energy Investment Fund. Scottish Energy Minister, Fergus Ewing, announced the investment along with five awards totalling an additional £2.8 million from the Marine Renewables Commercialisation Fund at the RenewableUK Wave and Tidal conference in Belfast. Tidal power company Atlantis Resources Corporation (Atlantis) has secured £2 million to help establish a global engineering and project management hub in Scotland.

>> Weir to keep oil flowing Weir Group has signed a £59 million contract with LUKOIL oil company to provide general maintenance services for the West Qurna-2 oilfield in southern Iraq. West Qurna-2 is one of the largest undeveloped oilfields in the world. The two-year agreement will see Weir engineers deliver mechanical, electrical, maintenance and pipeline services for the related production facilities, including the Mishrif Central Processing Plant. Mishrif will initially produce 150,000 barrels of oil per day, increasing to 400,000 by the end of 2014. Weir has invested over £6 million in establishing its service centre in Basra, Iraq, and it is the first in-country location to offer fully comprehensive maintenance services for all kinds of rotating equipment, valves and wellheads. The facility is also the first in Iraq to obtain API and ISO licences.

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>> New man Down Under Andrew Stewart has been appointed regional managing director of Wood Group PSB to lead its Australia & Asia Pacific business. Andrew, 36, was southern operations business manager and takes over from Matt Gavin, who has been regional director for over five years. The company employs more than 2,000 people in the AAP region.

>> It makes perfect CENSIS A new £10 million innovation hub, which will bring together Scotland’s universities with industry partners, has been launched in Glasgow. CENSIS will exploit the commercial potential of Sensor and Imaging Systems (SIS) technology and support the generation

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There are already around 140 companies working in SIS in Scotland, contributing around £2.5 billion per year to the Scottish economy >> Green plan creates jobs An innovation centre for industrial biotechnology is forecast to increase IB related turnover to up to £3 billion by 2030, create 1,500 jobs within five years and put Scotland at the forefront of a global transformation. Funded by the Scottish Funding Council and supported by Scottish Enterprise and Highlands & Islands Enterprise, the new Industrial Biotechnology Innovation Centre (IBioIC) – hosted at the University of Strathclyde – is a key element of the National Plan for Industrial Biotechnology – Towards a Greener, Cleaner 2025. It brings together academic and private sector partners to play a leading role

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in the potential £360 billion global industrial biotechnology market. Industrial biotechnology is the use of biological substances, systems and processes to produce intermediate and final products such as pharmaceuticals, chemicals, materials and energy – both cost-effectively and with minimal adverse environmental impact. The centre will involve all 13 Scottish Higher Education Institutions that are active in biotechnology research and will be co-ordinated by the University of Strathclyde.

>> Ambassador welcomed The UK Ambassador for Algeria, Martyn Roper, visited Robert Gordon University (RGU) in Aberdeen in recognition of its 10-year relationship with Sonatrach, the

Algerian oil and gas giant, and marking a decade of education and training services delivery to more than 400 employees and graduates based in Algeria. The ambassador’s trip, organised by SDI, follows the UK Government’s commitment to develop trade links for British companies in Algeria.

>> ESpark is flying With over 280 start-ups supported since it opened its doors, Entrepreneurial Spark, the business accelerator, has helped secure a total turnover of over £15.6m, representing a 342% increase from 2012. The fledgling businesses also saw a 214% rise in funding, up to £8m, benefitting from enhanced support from both existing and new partners from the private and public sectors. The ESpark businesses has helped in the creation of 520 new jobs, more than double that of

NEWS

the previous year. The programme also saw 259 new patents, trademarks and franchises, demonstrating the innovation and ambition within the ESpark ranks.

>> Hydro will benefit locals The first community hydro scheme in Scotland on Forestry Commission land is to secure a finance package of £1.9 million. The funding will enable the construction of the pioneering low carbon project in the heart of the Loch Lomond and Trossachs National Park. The Callander Community Hydro Ltd has secured finance from Triodos Bank, Scottish Enterprise’s investment arm, the Scottish Investment Bank and Social Investment Scotland to develop a hydro plant generating renewable energy which will be sold into the national grid and generate income for the local community.

>> Making a splash in the Gulf Twenty Scottish food and drink companies – the largest ever delegation from the country – took their tasty products to the Middle East’s major food trade fair. Scottish companies included Highland Spring, whose premium brand Speyside Glenlivet is being launched in the Middle East this year. The firm signed a contract with Winners International Trading Company after introductions facilitated by SDI at Gulfood in 2013. Gluten-free company Genius Foods won several awards at the Gulfood Awards and launched a range of its gluten-free products in 13 Spinneys and Waitrose locations across Dubai, Abu Dhabi and Ras Al Khaimah. The company plans to roll out the brand across the full 78 stores across the region in the coming months. The delegation was supported by Scottish Development International, the international arm of Scotland’s enterprise agencies.

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SPECIAL REPORT | SPRING 14


ENTREPRENEUR

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The Sellar’s report: An Aberdeen ambassador at large Alison Sellar started as a book-keeper in her father’s business before creating a global success story. She wanted to help other Scottish businesses and agreed to become a GlobalScot Trade Mission Ambassador. Here she tells BQ Scotland Editor Kenny Kemp how she mixes her roles Everyone needs to be paid for their work and Alison Sellar from Aberdeen has created an exceptional global business on the basic premise of making sure this happens promptly and super-efficiently. From Auckland to Auchtermuchty, Rio to Garioch, Perth in Australia to Singapore, activpayroll, the business she set up in 2001, is making sure that salaries appear as if by magic into bank accounts. While Alison Sellar is an outstanding Scottish businesswoman, she has also found the time in her schedule to become a GlobalScot Trade

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Mission Ambassador, a task she tackles with relish and ability. In her role as a GlobalScot, Alison is part of a network of business leaders and entrepreneurs with a connection to Scotland and a strong desire to see Scottish businesses succeed locally and in the wider world. GlobalScots freely share their knowledge and experience to help Scottish companies thrive and to support international trade and investment agency, Scottish Development International (SDI), in equipping Scottish businesses to trade internationally.

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So when SDI were looking for an ambassador to promote their trade mission activity, who better than Alison, both a GlobalScot and past attendee of a number of SDI led trade missions? It shows her great generosity of spirit because there is no special badge or a silver chain of office being such an ambassador. However, there is a warm glow of satisfaction [and a drop of malt-whisky tasting too] in knowing that the GlobalScots are equipping Scottish businesses to succeed in the international pond.

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ENTREPRENEUR

I’m the kind of person who likes to help people. The expertise that I bring is what I have learned doing business internationally

“I was inspired to be a GlobalScot Trade Mission Ambassador. I’m the kind of person who likes to help people. The expertise that I bring is what I have learned doing business internationally. It’s about talking to people and offering support when they need it.” What exactly is an SDI trade mission? “The trade missions are for Scottish companies and led by SDI to help them explore the potential markets where they might be interested in doing business. If you’ve a potential client that you might already have earmarked in that country, they will help arrange meetings for you. SDI will also help you meet the local chambers of commerce, local government and trade bodies. It is really worthwhile and you get a lot out of it,” says Alison. Her business, activpayroll, now operating in 70 countries, was created in 2001 when her first client was a large investment bank. After this, activpayroll was primarily involved in the global oil and gas payroll market, moving to take over several units in a business park in the leafy Cults suburb of Aberdeen, on the road to Royal Deeside. “Being headquartered in Aberdeen most of our client base are trading internationally. In 2005, we opened our first overseas office in Perth, Australia. That was when we won a contract with a global oil and gas services company. This took us to our first overseas office.” It was during this experience of opening her first international office that Alison began to appreciate the unspoken and often unknown issues that can arise. “It was very challenging in terms of what you need to do. You can feel isolated and >>

EXPORTING AND I

SPECIAL REPORT | SPRING 14


ENTREPRENEUR wonder if you are doing the right things, not just in terms of financial planning, but also some of the softer things” “We now have more than 800 clients. Yet we don’t have a sales-team which is very unusual. I see myself as being the sales force,” she says with a smile.  “After my experience in Australia, I met with Scottish Enterprise and they talked me through the wide range of support and assistance they could offer to help us expand further. This was all new to me. Then in 2010 I was introduced to their international arm, Scottish Development International.” She admits working with SDI was an eye-opener. “When you win a contract abroad you don’t necessarily think that Scottish Enterprise can help you grow internationally with funding and experience. I became aligned with a Scottish Enterprise account manager who really helped explore the internationalisation of activpayroll,” she says. Alison says Scottish Enterprise was there to help with supporting innovation and developing the leadership of her rapidlyexpanding team. “In a growing company, you go through lots of changes. The business cycle from a small company to a major international global business in a host of countries, requires strategic focus and planning, in terms of HR and funding. You can’t be shy about asking for support.” Alison began her close relationship with SDI after joining an oil and gas trade mission to Kristiansand in Norway. “It was quite an experience. It was in the summer and it was daylight all day and night. I didn’t manage to sleep very well but it was excellent to meet people. The trade missions are worthwhile and I gained a lot of value from this one. Not just from meeting fellow business people but sharing experiences,” she recalls. “There are 20 to 30 other Scots on the mission and they can perhaps do with your services – so it’s an opportunity to network with fellow Scottish businesses as well. When people first go on a trade mission, they don’t know what they are encountering. So with me there as a Trade Mission Ambassador, it can help those

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It’s interesting to find out how many overseas companies want to do business with Scottish companies. As a nation, we have a reputation for being honest, hard-working and pretty fair 20 or 30 people to learn that I’ve done it – they know I’ve been successful – and I can share my experiences. Hopefully, this will then drive them to success.” “Attending a trade mission is good for Scottish companies that are thinking of going international. During the mission it’s interesting to find out how many overseas companies actually want to do business with Scottish companies. As a nation, we have a reputation for being honest, hard-working and pretty fair. That goes a long way,” she says. After Norway, Alison went to the United States on another oil and gas mission.

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On a trade mission, she explains, new Scottish firms are introduced to firms that have already successfully made the transition into the market. “They’ve been there and got the T-shirt. It’s always interesting to hear what they’ve learned and how they have gone about opening up in new markets.” What do firms need to know before embarking on a trade mission? “You need to identify what your objectives are, who you want to go and see and what you want to achieve from it. If you identify that one key contract, and you win it, that’s

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going to pay for the mission itself.” Alison also passes on lessons from her own Aussie experience. “I’ve done a lot of talks on the unexpected challenges. For example, exchange rates on a fixed contract. In Australia, it was 2.2 dollars to a pound sterling, then it dropped to 1.4. If you’re pricing a fixed contract for a supplier in Aussie dollars, then big swings in currency rates are not good for you.” “A lot of the principles and challenges can be repeated throughout the globe but there are pitfalls, such as National Insurance variations.” What other issues has she come up against in her extensive travels? “One of the biggest problems can be sales people thinking they are great and selling into an overseas market. They might win a massive overseas deal and are suddenly expected to make it happen. Often people price an overseas contract and don’t think through how it’s going to work - in terms of local contactors, the workforce, visas - and how they make a profit out of it.” For Alison Sellar, it is about doing your homework properly and thinking about the fundamentals.“If I can stop people making some of the basic mistakes, then I will be doing my job.” She was delighted to be asked to be a GlobalScot Trade Mission Ambassador and will be joining several missions in 2014 and 2015. “Companies are not just going because it is time out the office. They have to be going for a reason to see if there is a market opportunity for them. There are a lot of cultural things to sort out. In some countries you are required to put a local person in place to work for your business. You need to find someone who understands your business.” Alison points out the issue of working across time zones, which can be grueling not only for travelling to new customers and returning home, but handling meetings and enquiries. She has recently returned from setting up her office in Singapore. “I used SDI a lot for our Singapore office. The Southeast Asia team was really helpful in taking me around to meet potential clients. There was a great deal of detail that people wanted from us, and the SDI team in market was superb in guiding us through.”

EXPORTING AND INTERNATIONALISATION

ENTREPRENEUR

Clients come to us because it is difficult to find a global payroll provider. We do payroll in 70 countries. Typically, if you are doing payroll in-house for a big organisation, you have different providers and it becomes very complex The company, based in the Suntec Tower, one of the city’s central skyscrapers, now has a staff of five, handling Asian work for companies including a large investment bank. “We’ve got a raft of current clients for Asia, Japan, Sydney and Auckland. We used to run this from Aberdeen, but there were issues with the time zone, which is why we set up the Singapore operations. “You’ve got to be prepared to get up early and go to bed late. There has to be a lot of give and take. When you’ve an office in Singapore, you have to get up early, and you can’t expect them always to stay late. You have to make sure you are being fair.” “We did have a focal point on oil and gas, but today our client base is very diverse, from large technology companies based in San Francisco, to a global publisher, luxury automotive company, and global gaming company. It doesn’t really matter what industry sector; because everyone needs to be paid.” “Clients come to us because it is difficult to find a global payroll provider. We do payroll in 70 countries with one single point of contact. Typically, if you are doing payroll in-house for a big organisation, you have different providers and it becomes very complex, plus there is the reporting in the local language. If you try and look at your financial reporting with this, it’s very difficult. There are different payment cycles depending on which country you are in. Chinese people get paid on the 5th, while the Aussies are typically paid on the 15th. It’s all different. In some countries, people go around in bicycles and deliver pay slips by hand.” Alison has been steeped in accounting. As a youngster, she worked in her mother and father’s company, Grampian Business Bureau, and had six part-time jobs. She was always

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working ‘really hard for my money’ and then attended Aberdeen College to learn the finer points of book-keeping and profit and loss. Her father’s firm was set up in their home and had 25 people working with them by the time he retired. She became a partner in the firm in 1999 and asked her father if she could build the payroll side, which she was running. It was agreed that Alison would create a separate company and while on an ‘Activ’ bike at the gym she got the inspiration to call her firm ‘activpayroll’, which she felt reflected what they were doing. Grampian Business Bureau, latterly in Dee Street, was sold in 2003 to activpayroll, with Alison becoming her father’s boss. He was finance director with Alison as managing director. Alison and her husband Euan own over 90% of the business and there are no private investors. They have an 18-year-old son, and 14-year-old daughter. “I don’t want to sell my business. I want to take the activpayroll name and grow it substantially. This is a global business based in Scotland.” Today a managing board and senior management team runs the show when Alison is on GlobalScot duties. She also sits on the board of Enterprise North East, a not for profit organisation encouraging entrepreneurial activity and supporting Grampian’s SMEs. Nearer home, Aberdeen Football Club signed up for activpayroll last July. Since then their fortunes as a football team have been resurrected. She’s joked with the board that getting paid on time has obviously helped The Dons. “I did have a laugh with George Yule – it’s nothing to do with the management, it’s because the footballers are getting paid on time!” n

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CASE STUDY

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>>Middle Eastern promise Tom Craig and his colleagues at the UK arm of Terasaki were no strangers to exporting but he said Scottish Development International’s help, and particularly a trade mission they organised, was crucial in tackling a new international market Terasaki, which makes large-scale circuit breakers for industrial use, was finding that its traditional European export markets like Spain and Italy had suffered badly at the height of the Eurozone crisis. For a company with 75% of its turnover in exports, the financial crisis was making a dent in its business. Craig says that Terasaki was looking to diversify into other markets and was looking at South America, Russia and the Middle East. “It was by going on a trade mission to the United Arab Emirates and Qatar that convinced us that was the market where we should focus a lot of our new export effort,” Craig says. He says that those on the trade mission visited the British embassies where they were given in-depth economic analysis on the region and its projected future output as

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well as very useful detail on prospects for the oil and gas and water sectors. “The sense we received from being there of the scale of the coming investment in Dubai up until 2020 and in Qatar for the World Cup convinced us that that is where we should focus our export investment.” That decision followed a lot of analysis of the markets and was based on a number of factors including the fact that so many people in the Middle Eastern target markets speak English. “It means that you don’t have to get your catalogue translated as you do into Spanish or Italian and it also means that you can get direct feedback from decision makers and influencers without having to use interpreters,” Craig says. “Another factor is the direct air link from

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Glasgow Airport. It is seven-and-a-half hours on a plane to Dubai but from there you are just an hour to Qatar or Bahrain.” He said that SDI also provided financial help for the first year in their new target market, which could go towards the costs of exhibitions and seminars that helped with the initial approach to the new market. As a result Terasaki is going to commit significant resources, planning to appoint a representative on the ground in Dubai. Tom Craig and his fellow directors are convinced that the investment will pay off and will mean expansion for their business in Scotland to service the new Middle Eastern customers and additions to the current 110 headcount at their Scottish base in Clydebank. n

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COMPANY PROFILE

Growing pains? Taking the headache out of funding export growth With Scottish food and drink sales booming overseas and organisations such as the CBI confidently predicting that export growth will strengthen as the Eurozone and wider global economy emerge from the recession, now is the time for growing businesses to be thinking about their export funding strategies One of the first challenges faced by an SME wanting to grow its exports is funding. Do you feel a headache coming on? Well, fear not. A wide variety of funding and funders are available and, with increasingly flexible packages, there is almost certain to be a structure that is right for the particular needs of each business. There are several different types of funding options. These include: • Equity financing - an investor takes shares in the company in return for providing funding and is likely to have a seat on the board and input into the decision-making process; • Debt financing - often an interest-bearing term loan, possibly involving a charge over the business’ assets, but the lender does not take a stake in the business; • Mezzanine financing - a kind of hybrid between debt and equity financing involving an interestbearing loan, with a right to subscribe for or convert into a stake in the business; and a • Working capital facility - typically an overdraft from a bank and potentially invoice discounting. Many businesses will seek to optimise their funding by combining one of more of these. To take a simple example, suppose a company wishes to gear up to export its products to France. Having conducted market research, it identifies that it needs a new manufacturing plant, additional sales and marketing people, a new office and depot in France, and a new distribution network. A potential mix of funding for this company might comprise: • A bank loan to fund the capital expenditure, including the new manufacturing plant, with a charge granted over the property to the bank to

EXPORTING AND INTERNATIONALISATION

William McIntosh, Corporate Partner and Head of International at Brodies LLP

secure repayment, coupled with some asset finance for equipment from the bank or another provider. • A bank overdraft and invoice discounting for general working capital. • Funding from a growth capital provider by way of an equity investment (i.e. capital for shares) or as a mix of equity and unsecured loan (often loan notes convertible into shares). This would fund the gap between the bank finance and the business plan needs. The investor takes a minority stake in the company and appoints an investor representative to the board. In determining which type of funding, and which mix of options to go for, a business needs to consider several factors including the amount of investment required; its growth strategy; any plans for a future sale of the company; its appetite for accountability to external shareholders; and its current and projected turnover, profits and cash flow. The latter will dictate the level of debt that it can service and the likely repayment profile. Some companies may have reservations about an

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external party being involved in management. However, an investor director usually brings with them years of business experience and a different skill-set as well as access to a broad network of useful industry contacts, including a pool of non-executive directors with relevant industry experience who can join the company’s board, if appropriate, as it grows. So who should a business approach to explore the options? In addition to bank funding, there are a number of growth capital providers out there including Business Growth Fund, Maven, Scottish Equity Partnership and Scottish Investment Bank to name but a few. In addition, quite apart from upfront funding, you may be interested in the government’s UK Export Finance (UKEF), the UK’s official export credit agency. Its services include credit insurance policies, political risk insurance on overseas investments, and guarantees on bank loans. Many of these aim to protect businesses against the risk of non-payment from abroad. UKEF, which has regional advisers throughout the UK, also underwrites bank loans offered to overseas buyers of UK products and services, taking on the risk of the loan from the lender. So put away the aspirin and rest assured that many growth funding providers are in fact keen to fund businesses with ambitious plans for export growth. The world is your oyster.

William McIntosh, Corporate Partner and Head of International at Brodies LLP, Edinburgh. Contact william.mcintosh@brodies.com or telephone 0131 656 0154.

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CASE STUDY

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>>Man on a mission Renfrewshire-based education recruiters Worldteachers have been supported on trips to the UAE, Saudi Arabia, Kuwait, Qatar, Malaysia and Spain. Their founder and CEO, Roddy Hammond, talks about his experiences When did you last attend an SDI trade mission? In September 2013, I participated in a Scottish trade mission to UAE and Qatar which was developed to help Scottish companies new to these markets. What prompted you to attend this mission? Exports account for nearly 100% of the turnover of Worldteachers and we see trade missions as an important part of our export strategy. We are responsible for sending teachers and whole families to other countries around the world therefore we believe it is necessary to visit schools in the various countries we deal with to understand the culture, the processes involved and, quite simply, to meet our customers face to face. What key advice would you give to companies to help them prepare for a trade mission? Attending the events or accessing the online tools in the Smart Exporter programme is probably the best place to start to understand international trade in advance of a mission. The Smart Exporter market awareness events and preparatory courses bring the opportunity to network with other Scottish companies who are already trading in particular countries and to learn from their experiences. Any advice on what companies should do during the mission? Try to connect with as many potential customers as possible before you travel but also follow up on every lead you generate during any trip. Every delegate on a trade mission seems to be overloaded with potential contacts. It’s tricky to know which will generate sales and whether any may prove to be a waste of time so follow-up is key. I would encourage all businesses to consider overseas markets but to focus on a particular region

SPECIAL REPORT | SPRING 14

to get going, look to penetrate that market and then diversify your products or services or expand into another region. Don’t spread yourself too thinly. It took a third trip to Qatar for Worldteachers to really strengthen key relationships so don’t expect to win business overnight. How do you think Scottish companies are perceived overseas? In many ways businesses overseas are not too bothered where you come from, it’s more about how good your products or services are. That being said, Scots are always given a warm welcome wherever they go. A smile always comes across their face when you say you are from Scotland. Why is Worldteachers so successful? A teacher can work pretty much anywhere in the world so we are fortunate we can export our service to all sorts of places. But we have had to be very persistent to keep developing our business. We are trading in every country in the Middle East and are now looking further east with new customers secured in China. Any funny moments from a mission you can share? I visited a school in Doha which had been in total lockdown half an hour before I arrived. Why was that I asked? The Sheikh’s pet had been spotted in the school playground...yes, a tiger! n

We are responsible for sending teachers and families to other countries. We believe it is necessary to visit schools in the various countries to understand the culture, the processes involved and to meet our customers face to face

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EXPORTING AND INTERNATIONALISATION


SPRING 14

CASE STUDY

>>Preparation is the key Envitec International, which operates in the oil and gas services industry in Aberdeen and around the globe, have also been on a number of successful missions. Director and Vice President of Business Development, Eric Anderson tells us more How many missions have you been on? At least seven or eight over the years. Why did you decide to attend a SDI trade mission? Our main target markets are overseas and when there is a specific mission to those areas we see real benefit in attending to do market research and business development type work. What should Scottish businesses considering attending a trade mission do?  Firstly make sure that the mission fits in with their raison d’etre, their target market and do some pre-mission homework to identify targets. Don’t rely on SDI or GlobalScots to do all your work for you. In other words, do your homework before you go and when there is free time during the trip, use it to your advantage. What key advice would you give to companies to help them prepare for a trade mission? Much the same as above really, you have to drive your own success. How do you think Scottish companies are perceived overseas?  Our target markets are Middle East, North Africa and Sub-Sahara Africa and I can only say that from my personal experience and

Our main target markets are overseas and when there is a specific mission to those areas we see real benefit in attending to do market research and business development type work EXPORTING AND INTERNATIONALISATION

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that of colleagues on the missions that we are very well received and perceived. How is your current business doing in the export market? We have launched very successfully over the last year and we have contracts currently running in Abu Dhabi and Pakistan and have also sold pumps into the UAE, Egypt and Kurdistan. n

SPECIAL REPORT | SPRING 14


INSIGHT

SPRING 14

One of the tastiest success stories in Scotland’s exports over the past few years has been in the food and drink industry

a world of opportunities It is a sector that has exceeded the targets that it set for itself and then some – and ambitions for the future are to do better still. Food and drink in Scotland has come a very long way in seven years. Back in 2007 the industry set a target of £12.5bn turnover by 2017. That target was smashed last year – six years early – with a significant proportion of that coming from exports. Our food and drink industry today is Scotland’s fastest growing exports sector – up from £3.7bn in 2007 to £5.4bn in 2012 (and another 2017 target, £5.1bn, smashed along the way). Now industry body Scotland Food and Drink has set a new goal of reaching £16.5bn by 2017 with an ambitious £7.1bn to come from exports – up from the current value of £5.4bn. Scotch whisky has to date seen incredible growth and in the decade leading up to 2012 saw annual exports increasing by 87% to £4.3bn. While this is a notable performance, the

SPECIAL REPORT | SPRING 14

phenomenal global reach of whisky has yet to be matched by food and non-whisky drinks exports, which currently account for just 20% of the sector’s sales overseas. In terms of food exports, £8 out of every £10 in international revenue comes from just 10 markets – and half of that is salmon and seafood. Now the aim is to make Scotland’s food and drink as a whole as well known around the world as whisky. As James Withers, chief executive of Scotland Food and Drink, says: “The challenge and opportunity is clear: we need to export a broader range of products into a broader range of markets.” The industry is seeking to achieve this with the launch of a £4.5 million Scotland Food and Drink Export Plan which seeks to capitalise on the sector’s growth to date and open asyet-untapped export potential, for example in categories such as dairy, bakery and craft beer. The Plan aims to consolidate the international

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marketing efforts of all trade associations across the sector along with the work of government and public agencies into a single, coordinated export drive. There is precedent for this model being successful – some of Scotland’s competitor countries already follow it and Scotland is starting to see dividends from adopting this approach in some markets, such as in Germany where a Food & Drink specialist has been working with red meat companies and other products. The Scotland Food and Drink Export Partnership is made up of Scotland Food and Drink, Scottish Development International, Quality Meat Scotland, the Scottish Salmon Producers Organisation, Scottish Bakers, Dairy UK, Seafood Scotland and the Scottish Government. Withers says: “This is the dawning of a new golden era of food and drink in Scotland and we have grand ambitions for exports. We’re talking about nothing less than

EXPORTING AND INTERNATIONALISATION


SPRING 14

internationalising an entire sector of the Scottish economy.” Susan Beattie, head of food and drink for Scottish Development International (SDI), adds: “We’ve done extensive research into global opportunities to identify 15 priority markets where we believe Scotland’s food and drink businesses have the biggest chance of success. This is where we will put our collective effort and resources to deliver the best returns for Scotland. The key will be putting feet on the ground. Susan Beattie continues: “We’ll be bringing together all our combined market and sector expertise to build a global team of food and drink experts, operating in Scotland’s top prospect export markets. Their brief will be to open up a raft of new opportunities for ambitious Scottish exporters, knocking on doors to build contacts with importers and buyers such as hotels, restaurants and supermarkets.” Support will be made available to Scottish companies that intend to take their products into these markets. They may be first-time exporters. They may be growing their share of existing markets, or breaking into new ones. Our seven ‘top prospect’ markets are North America (US and Canada) France, Germany, the Middle East (specifically the United Arab Emirates, Saudi Arabia and Bahrain), Mainland China & Hong Kong, Japan and South East Asia, (Singapore and Thailand). Within each of these markets the export drive will take different forms. In more mature markets like France and North America, the efforts will go into forging stronger relationships with buyers and encouraging food and drink companies to develop new products of specific interest to these markets. In newer markets such as South East Asia, work will focus on raising awareness of what Scotland has to offer in food and drink beyond a nice bottle of malt. There are definite opportunities – Scottish seafood exports to Asia have increased by a staggering 247% over the past years, just one reflection of a thriving foodservice industry driven by large populations of young consumers, a welldeveloped dining out culture and a growing focus on healthy but indulgent foods. These efforts will be supported back home

EXPORTING AND INTERNATIONALISATION

We are talking about the potential for around £1.8 billion in growth over the next few years

with increased market awareness and development activity aimed to give Scottish companies greater understanding and confidence in developing their export business. This collective activity will kick off in April with work already being done on recruiting the new specialists with the aim of having people placed in the first four markets by the summer – China, Hong Kong, Japan and Canada. These new food and drink global experts will work alongside existing SDI overseas staff and with the trade organisations – another example of the collaboration across the whole food and drink export effort. Susan Beattie stresses this collaborative approach: “What’s different now is that we’re all working together in a collective approach, with a shared set of market priorities. “That means that we can really make the most of our resources, expertise and contacts to deliver even more for Scotland’s food and drink industry.” If this combined export drive does bear fruit as it is hoped, the benefit to Scottish food and drink companies and to the economy as whole will be huge. The ultimate prize is exports valuing more than £7.1 bn to the Scottish economy and Scotland’s established position on the world stage as the Land of Food and Drink. James Withers concludes: “We are talking about the potential for around £1.8 billion in growth over the next few years, so the investment now is relatively modest in comparison to the economic prize at stake for the industry and for Scotland.” n

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INSIGHT

Five reasons to trade overseas With Scottish food and drink exports worth £5.4bn, Michelin starred Chef Tom Kitchin talks about international opportunities. Exporting is for anyone Selling produce to overseas buyers is not an exclusive club for big businesses with a huge turnover. It is something many businesses can do and can benefit from. Exporting expands your profits I was recently in Dubai supporting over 20 Scottish companies at Gulfood, the world’s largest food service and retail show. A number of these companies will undoubtedly secure new distribution deals for their products, expanding supply into lots of new stores in the region. 99.7% of market opportunities are outside Scotland I have worked in some of the top restaurants in the world and I just couldn’t believe all of the wonderful fish and shellfish that would arrive every day – all from my home of Scotland. I saw first hand the desire for our produce internationally. Develop new skills and technology Doing business overseas brings with it a whole range of new experiences and an understanding of new and different cultures, regulations and ways of working. Trading internationally will bring you access to new skills and perhaps new technologies, and help to build your competitiveness as your own company grows. Increase your productivity The Scottish and UK markets are very important for our food and drink industry. However, working with both local and international markets helps to support sustainable growth. Data shows an average 34% increase in productivity for companies who also export their products. Author Tom Kitchin is a Scottish chef and owner of restaurant The Kitchin, where he became the youngest winner of a Michelin star.

SPECIAL REPORT | SPRING 14


OVERVIEW

SPRING 14

taking off on a global scale Taking the first steps into exporting can be a daunting prospect for firms used to trading close to home, but Scottish Development International has devised a targeted programme that demystifies the process ‘If you fail to plan, you plan to fail,’ is a wise statement, versions of which are attributed both to Winston Churchill and Benjamin Franklin. It is something that is no less true of businesses getting into the export market than any other major endeavour. With the onset of ecommerce more and more Scottish companies are finding that they get orders through their website from places that they would never have thought of selling to. While it is possible to ‘drift’ into exporting, the way to make a sustained success of selling internationally is to research the potential markets properly, get an export business plan in place and make sure that you have the necessary capital to back it up. But how do you start to develop your export plan? One way that more and more Scottish

SPECIAL REPORT | SPRING 14

businesses are turning to is to opt for Scottish Development International’s (SDI) Preparing to Export programme. More than 400 companies have participated in the programme, funded through Smart Exporter, over the last three years by attending introductory to advanced programmes, with the greatest demand being for the introductory two-day workshop targeted at individuals and companies new to exporting. Kirsteen Higgins, Smart Exporter operations manager at SDI, said: “The workshops will give businesses the opportunity to prepare a practical export plan aimed at helping their business to grow and support to start putting this into practice.” The introductory programme, with between six and 10 businesses attending from a mix of

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sectors, aims to help businesses understand the fundamentals of exporting and the opportunities in international markets. Over the two days the participants, who will include business owners or individuals new to exporting, will get a detailed and practical introduction to selling products and services abroad. The first day covers market analysis and market entry. It aims to set out all companies need to understand to develop their business in international markets, including the importance of international business planning, the importance of market research to select the right market and the challenges that businesses face providing services internationally that they might not have encountered in the domestic market.

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OVERVIEW

a lot of it accessible online. Santander, for example, provides a very useful five-point plan aimed at helping SME owners prepare to sell abroad. John Carroll, head of international Santander, Santander Corporate and Commercial, says the plan is designed to take SMEs through a step-by-step route into exporting. It aims to show them where there is demand for their products or services, outline specific clients or suppliers they should be speaking to and how to connect with these clients, how to complete a secure transaction; and, finally, how to grow their presence in any given territory. Carroll said that businesses should be left in no doubt about the advantages of exporting. “Recent figures reveal that companies planning to export are more positive about future prospects than those with no export plans. “In fact, all other things being equal, a company is up to four times more likely to fail if it restricts itself to its domestic market, compared with a business that has clients overseas. Exporting means not putting all your eggs in one basket.” n

The market entry session covers the options available in approaching and entering overseas markets. It covers how to promote services and products in overseas markets including via websites and social media, market visits, exhibitions and any cultural issues which might prove all important. Higgins says: “Day two covers the nuts and bolts of exporting. It will cover issues such as logistics, duty, currency, do they have to pay VAT and protecting intellectual property. Really it’s all of the practical issues that a company would face in the export market.“ In addition to the Introductory Preparing to Export workshop, SDI also runs Intermediate and Advanced programmes for businesses that have some experience or are very experienced in exports respectively.

EXPORTING AND INTERNATIONALISATION

Intermediate workshops run over a total of six days, delivered in 12 half-day modules. They are aimed at companies still at a relatively early stage of exporting but who are already up and running. The Advanced course, aimed at experienced exporters, is again six full days and is delivered in six modules including topics such as managing overseas operations, strategic alliance and joint ventures to maximising sales channel performance. The Preparing to Export programme is one of a range of options to help businesses get informed before they start exporting or wish to enter markets and grow their international business. There are other sources of expert information with most banks also giving advice on getting into the export market,

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SPECIAL REPORT | SPRING 14


CASE STUDY

SPRING 14

HATS OFF TO ALISON

From indi rock bands and anarchic cartoon creations to the land of the rising sun, a bespoke bobble hat maker has an army of devoted fans Wonky Woolies entered the world of exporting by accident. Alison Burn who is the inspiration behind the superbly named bobble hat business was exhibiting at a Glasgow trade show when a Japanese buyer approached her. Up to that point she had only considered selling her products in Scotland and possibly into the rest of the UK and the approach took her by surprise. “I was excited but got really worried that it wouldn’t work out,” she says. It did and now Wonky Woolies bobble hats are on sale in Japan. Fast-forward to this January and another Scottish Trade Fair and Wonky Woolies has fulfilled a repeat order for that first buyer and she is talking with five other potential Japanese outlets. In addition to adding valuable sales, exporting is making a wider contribution to the development of Alison’s business. “Our busiest months are from November through to February or March. The Japanese buyers are looking for us to supply them with goods in August so that work really helps to balance out our year.” Alison Burn went on a Smart Exportersupported Prepare to Export Introductory workshop over two days, which she said gave her the confidence to operate in overseas markets. ‘There was a really good cross section of businesses there who were at slightly different stages in exporting and we were all able to learn from each other’s ideas and experience,” she says. It is a dramatic rise for a business that will have been fully operational for two years in June after Alison had previously tested the market with a few individual commissions and visits to craft fairs.

SPECIAL REPORT | SPRING 14

I was excited but got really worried that it wouldn’t work out

Wonky Woolies started as a custom bobble hat business – customers would commission their own design of hat to celebrate their own business or for a particular occasion. Custom commissions have included those for Scottish rock band Biffy Clyro, to mark the Isle of Mann TT race in 2013, with the latest being a commission for South Park Custom Bobbles to coincide with the launch of the new South

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Park computer game The Stick of Truth. Alison is determined to increase her knowledge, understanding and skills in exporting and plans to go on to a Prepare to Export intermediate workshop. She is also considering entering Scandinavian markets and is planning to go on a trade mission to “see for myself” and make contacts before taking the plunge into a new territory. n

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COMPANY PROFILE

Driving Scotland to export success With Scottish food and drink sales booming overseas and organisations such as the CBI confidently predicting that export growth will strengthen as the Eurozone and wider global economy emerge from the recession, now is the time for growing businesses to be thinking about their export strategies Late last year the Chancellor set the bold target of doubling UK exports to £1 trillion by 2020. That equates to a growth in exporting of 9% a year for the next six years… no mean feat. HSBC’s Global Trade Forecast currently indicates we’ll achieve export growth of about 5% until 2020; a positive figure but one which still falls short of where the Government is setting its sights. Our future success lies in our ability to adapt to the increasing internationalisation of supply chains and to a generational shift of economic power from west to east and from north to south. There are encouraging signs that Scottish businesses are stepping up their response to these challenges. The latest Government figures show that Scotland exported £20.6 billion worth of goods last year, up by £600 million on the previous year’s numbers, and 15% higher than at the turn of the decade. Unlike many UK regions, we operate a trade surplus, plus our exports are not dominated by any one sector, with beverages and tobacco, machinery, manufactured goods and crude oils making significant contributions to the nation’s overall export presence. Neither are we over reliant on any particular market – Scotland generates over half of its export income from countries from outside of the European Union. Plus, we are resilient and good at seeking new opportunities; exports to France dropped by 10% last year but this was more than compensated for by a 40% rise in exports to Belgium, which is now Scotland’s second largest export partner. But we must not rest on our laurels and the Scottish Government has its own ambitious targets, including delivering a 50% increase in the value of international exports by 2017. Around 5,500 Scottish companies are currently exporting,

EXPORTING AND INTERNATIONALISATION

Only by investing in research and development, and in training to improve further the skills of our workforce, will UK businesses realise their export potential and the country make significant progress in reducing the deficit and staking our claim as a key trading nation of the future, as well as today

in Scotland to support companies that trade, or aspire to trade, overseas. So what else can be done? In the autumn, HSBC published its ‘Manifesto for British Exports’, setting out eight clear recommendations distilled from a series of Export Advisory Councils we held with business customers. There has already been movement on most of the points we highlighted, which included easing of the visa process for businesses trading with the UK, the establishment of Business Centres in overseas markets and the consideration of tax incentives to support businesses making the step into exports. We believe exporters have three core requirements - Connectivity with other parts of the world; Support to help with the initial costs and risks of exporting, and Confidence, which comes from clear information about international opportunities. HSBC is working hard across all three areas for the benefit of our customers. We can’t afford to be complacent. To retain an advantage in design and in manufacturing quality, we must continue with our great tradition of innovation. Only by investing in research and development, and in training to improve further the skills of our workforce, will UK businesses realise their export potential and the country make significant progress in reducing the deficit and staking our claim as a key trading nation of the future, as well as today.

which represents just 5% of overall UK companies exporting, so there are clear opportunities to grasp the benefits that exporting provides. HSBC is certainly playing its part in supporting Scottish businesses to export. Almost half of our lending to SMEs last year was used to support businesses that want to trade internationally, which is higher than the rest of the UK. We have internationally focused relationship managers

For further information contact Alison McGregor, HSBC Scotland CEO, on 08455 858 417

Alison McGregor, HSBC Scotland Chief Executive

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SPECIAL REPORT | SPRING 14


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Scottish

EXPORT awards

2014 • E-Commerce Exporter of the Year

• Most Entrepreneurial Exporter of the Year • Most Innovative Exporter of the Year • International Trade Best Professional Service Advisor • Best Start-up Exporter of the Year • Scottish Export Team of the Year • BQ Scottish Exporter of the Year

A selection of the nominated companies >>


Inaugural event aims to celebrate entrepreneurial endeavour and encourage fledgling exporters

Scottish

EXPORT awards

2014 Wednesday 28 May 2014

Glasgow Science Centre In association with

Sponsored by

SPECIAL REPORT | SPRING 14

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Building our export base is an essential part of boosting our businesses, improving our standard of living and rebalancing our economy. The drive, ingenuity and the sheer hard work of Scottish companies that are already exporting are being celebrated in an awards scheme being held for the first time this year. The BQ Scottish Export Awards 2014, run in association with economic development agency Scottish Enterprise, will recognise excellence in the field and give the businesses involved a deserved time in the spotlight. Bryan Hoare, a director of room501 publisher of BQ magazine said: “BQ Magazine supports and encourages business growth and entrepreneurship across Scotland. Our mission is to recognise and celebrate the contribution that businesses make to the Scottish economy, while also encouraging and motivating others to succeed in business. “We are delighted to be holding the inaugural Scottish Export Awards in association with Scottish Enterprise. Exporting remains high on the Scottish Government’s economic growth agenda and these awards are about recognising excellence along with the achievements and export contribution of Scottish businesses. “The event aims to provide inspiration and encouragement for others to take forward their export potential. “International trade continues to present an opportunity for Scotland to bring immediate and sustainable growth to its economy and with this in mind we need to lay down the baton to SMEs across Scotland to consider exporting as a realistic opportunity for growth” The inaugural awards have six categories that represent the breadth of Scotland’s export performance.

www.bq-magazine.co.uk/export-awards


The E-Commerce Exporter of the Year Award will recognise a business that has increased brand awareness and recognition, expanded into new markets and boosted sales, efficiency and improved customer service. The next category is the Most Innovative Exporter of the Year Award which will recognise a company that brought a new approach to exporting, having added value to some aspect of the export operations through an innovative process. Most Entrepreneurial Exporter of the Year Award is a category that focuses on the enterprise of the exporter and how that has been used to boost export sales with significant results. International Trade Best Professional Service Advisor – this award will sing the praises of those ‘in the exporter’s corner’ who can make such a key difference to the export performance with the quality of their advice. Best Start-up Exporter of the Year recognises outstanding achievement by a business – in any industry – that is new to exporting and is already making a splash in overseas markets. Export success is not achieved through the contribution of a single individual, no matter how stellar their performance may be, a fact celebrated in the Scottish Export Team of the Year award. In addition to these six award categories, which companies can enter into, there is the overall BQ Scottish Exporter of the Year Award that will be selected by the judging panel from the winners of the six category awards. A package of benefits for the overall winner will include

International trade continues to present an opportunity for Scotland to bring immediate and sustainable growth to its economy – we need to lay down the baton to SMEs across Scotland to consider exporting as a realistic opportunity for growth

comprehensive PR exposure in BQ Scotland over coming editions as well as tickets to the 2014 Ryder Cup at Gleneagles in September. Jackie Malloy, BQ’s Events Manager, said: “We’ve had a really strong set of entries for these inaugural awards. “From our early consideration, the entries into the Most Innovative Exporter and the Most Entrepreneurial Exporter award categories are particularly impressive but all the nominated entries are of a high standard. “We are also delighted that such a high quality panel of judges have agreed to give their time to judge the inaugural awards.” The Awards judging panel is chaired by Brian Wilson, chairman of Harris Tweed among other non-executive roles, and a former UK energy minister in his time as a Scottish MP. Other judges that have already been

announced include Jack Perry, the former chief executive of Scottish Enterprise who currently has a range of non-executive roles including being chairman of investment management firm ICG-Longbow. John Anderson will bring his experience as chief executive of the Entrepreneurial Exchange to the judging panel. Fiona Fraser, co-founder of luxury goods company Slow Luxury and Neil Boyd, commercial director of Ian Macleod Distillers bring their knowledge and experience of two important export sectors. The results of their endeavours as judges will be revealed in an awards ceremony in the striking surroundings of the Glasgow Science Centre on Wednesday 28 May. Adrienne Lawler, the TV presenter and corporate speaker, will host the black tie evening event, which is already looking set to be an important one in the Scottish business calendar.

To purchase tickets for the BQ Scottish Export Awards 2014 visit www.bq-magazine.co.uk/export-awards For all sponsorship and ticket enquiries please contact Jackie Malloy, BQ Scotland Events Manager on 07968 146605 or email Jackie@room501.co.uk

www.bq-magazine.co.uk/export-awards

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SPECIAL REPORT | SPRING 14


JUDGES >> Meet the distinguished panel

The Rt Hon Brian Wilson Chairman, Harris Tweed Hebrides Rt Hon Brian Wilson is chairman of Harris Tweed Hebrides and a former UK Trade Minister. In all, he held five Ministerial posts between 1997-2005. Since leaving politics, he has continued to be closely involved in the promotion of Scottish exports and was last year appointed a UK Business Ambassador with a specific remit to carry out a Review of Scottish Exporting. In 2011, he was named UK Global Director of the Year by the Institute of Directors for his work with Harris Tweed Hebrides. Brian is also chairman of Havana Energy which is involved in a agri-energy joint venture with the Cuban Ministry of Sugar and is a director of Celtic Football Club. He lives with his family in Mangersta, Isle of Lewis.

Scottish

EXPORT awards

2014

John Anderson

Jack Perry CBE

Chief executive – The Entrepreneurial Exchange

Independent non-executive director

A well known specialist in entrepreneurship and new venture creation in Scotland, John brings considerable experience of emerging and high growth companies to his role as Chief Executive of The Entrepreneurial Exchange. This leading peer learning organisation for ambitious entrepreneurs represents some 400 members with collective revenues of £17 billion and employing 150,000 people. A founder member of The Entrepreneurial Exchange, John was a shareholding director of a young venture-backed technology company engaged in the design, manufacture and distribution of laboratory equipment and cofounded a company that provided pre-hospital emergency care and healthcare industry training. As a CA in professional practice he worked with many of Scotland’s most exciting growth companies after returning to Scotland from Chicago in 1989. An experienced nonexecutive chairman and director in growing businesses, John is a Par Equity Advisory Panel Member and Chairman of Gabriel Investments angel syndicate. He is a regular contributor to the media on issues facing emerging and high growth companies and was instrumental in setting up the Scottish Enterprise “Local Heroes” project, based in part on his own MBA thesis “Local Heroes - Scotland’s Entrepreneurial Role Models”.

Jack Perry is an independent non-executive board member and adviser to public and private companies. He served as Chief Executive of Scottish Enterprise for six years until November 2009. Prior to this, until December 2003, he was the managing partner of Ernst & Young in Glasgow and Regional Industry Leader for Scotland and Northern Ireland for Ernst & Young’s Technology & Communications practice. Jack was Chairman of the Confederation of British Industry (CBI) Scotland from 2001 to 2003. He is chairman of ICG-Longbow UK Senior Secured Property Debt Investments Ltd and of Silent Herdsman Holdings Limited – a predictive analytic software company. Jack is a former non-executive director of Robert Wiseman Dairies PLC and Capital for Enterprise Ltd. He also served as a member of the Advisory Committee of Barclays UK & Ireland Private Bank – Barclays Wealth. Jack is a member of the Court and Treasurer of the University of Strathclyde and a member of the Advisory Board of the University of Edinburgh Business School. Jack is also Chairman of Hospice Developments Limited. He was made a Commander of the British Empire (CBE) in the Queen’s 2010 New Year Honours List. He is married with three children and lives in Glasgow.

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www.bq-magazine.co.uk/export-awards


JUDGES

Fiona Fraser Co-founder, Slow Luxury

Fiona Fraser is a designer, marketing specialist and entrepreneur. She is passionate about Scotland’s people, land and products, and has developed a reputation for delivering creative strategy, brand development, marketing and collaborations for the Scottish luxury

Neil Boyd Commercial director, Ian Macleod Distillers

Neil Boyd joined Ian Macleod Distillers in 2010 and is commercial director responsible for the Malt Whisky portfolio. Neil also has responsibility for the company’s UK, US and Canadian business and is based at its

industry on the international stage. Fiona is co-founder of Slow Luxury, a global marketing and sales platform setting new aspirational lifestyle standards for luxury and heritage design goods. The Slow Luxury philosophy provides a framework for luxury brand development, generating engagement and sales through a focus on connection, collaboration, sustainability and storytelling. Fiona was previously owner and CEO of Fraser Balgowan, a Scottish luxury brand that sold collections to international retailers such as Saks 5th Avenue in New York. In its first year of trading, Fraser Balgowan was featured in Vogue, the Wall Street Journal, Forbes and Women’s Wear Daily, and was nominated for ‘Accessory Designer of the Year’ at the Scottish Fashion Awards.

Edinburgh HQ. Previously he spent three years as an independent consultant working on drinks industry related assignments for numerous companies and start-ups. Between 1998 and 2007 Neil spent nine years with Bacardi, as marketing director then global brand director. He was responsible for the strategic development of the group’s Scotch Whisky portfolio including Dewar’s (No 1 Brand in the USA). He also worked for four years as international sales and marketing manager for the Asia-Pacific region at Glenmorangie plc. Neil held the role of business development director at Scottish Enterprise between 19941998 – managing a team dedicated to the development of start-up companies and

www.bq-magazine.co.uk/export-awards

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Fiona has an extensive range of strategic and creative skills, developed over 18 years within private, public and third sector settings. She has enjoyed a varied career, working with company directors in energy, retail, tourism and heritage, textiles and fashion; governments; international development agencies; local communities and charities. Since 2012, Fiona has been a member of the Scotland International Group, contributing to the Wilson Review of Scottish Exporting for the Secretary of State for Scotland. On a consultative basis, she acts as business development manager for Women’s Enterprise Scotland (WES), which recently launched the Scottish Framework and Action Plan for Women’s Enterprise in association with the Scottish Government.

the attraction of inward investment. A key achievement was the creation of the largest business start up programme in the UK, along with the set up of the East of Scotland Investment Fund, at the time a new equity fund for small companies. His career began with six years at SCA Molnlycke Healthcare Ltd where he developed his marketing, sales and product management skills, and became business development manager for the company’s Italian operations. He holds an MA from Dundee University and an MBA from Heriot Watt University and underwent senior management training at Darden Business School in West Virginia, USA. He lives in Edinburgh and is married with three teenage children.

Scottish

EXPORT awards

2014


NOMINATIONS >> Air Service Training (Engineering) Ltd

>> activpayroll Everyone needs to be paid for their work. Alison Sellar (who is interviewed in this BQ edition for her role as GlobalScot Trade Mission Ambassador) set up her outsourcing payroll business, activpayroll in 2001. More companies are doing this to streamline processes and become more efficient. The Aberdeenbased company firm is now global, delivering worldwide payroll solutions which includes taxation services and online human resources. A program called Activ8, essentially a set of management tools integrated into system, improves efficiency and the flow of information. It is also designed to reduce administrative duties. activpayroll began working with a large investment bank, which it still handles, but quickly moved into handing payroll services for the oil and gas industry, with its multiple international jurisdictions. Over the last 12 months, the firm has opened a Singapore office, recruiting local staff and expanding its services in Asia and Australia. activpayroll is available to its customers 24/7 around the world. In Scotland, the company has recently opened an Edinburgh office. From March 2012 to March 2013, turnover was £7.5 million with a net profit of £565,000. Alison Sellar, the founder and chief executive officer, is now enjoying her ambassador’s role helping other Scottish businesses. “I am a great believer that if you are in a position to help other businesses, you should make the effort to do so – and I am happy to share my experiences with other business people.”

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The aviation business is expanding around the globe and demand for qualified pilots and engineers is strong. Peter Farrow is the chief executive of a company that defines itself as a training partner with a pro-active ethos, working with customers, instead of for them. Air Service Training, based in Perth, delivers training and examinations for pilots and engineers and has been a world leader in the field of aviation training since 1931. Services include the setting up of academies, flexibility in delivery options and a willingness to meet customer needs. A hangar at Perth Airport provides an adequate base to support its training programme where students gain practical as well as theoretical knowledge. Perth College University of the Highland and Islands campus is also used for lectures. The company has branched out overseas and in particular to non-European Union countries which are less familiar with EU Aviation regulations. AST also offer its knowledge and services as an international consultancy. Although 85% of non-EU students study in Perth, AST also operate academies in Jordan, Indonesia and Iceland with an agreement to open in Kota Kinabalu, Malaysia, later this year. The company’s 30 strong work force includes 18 full-time lecturers, who teach in Perth and secondary sites overseas. Flexibility and attention to detail are essential in delivering high quality service. AST excels at training overseas, with academies that offer short courses and examinations in pilot and engineering licensing. In Scotland, there are currently no competitors to AST, while its competitors in England offer more limited services in that sphere. Turnover increased to £1.77 million for August 2012 to July 2013. “AST is a member of the industry group Aerospace, Defence and Security (ADS) which offers unrivalled industry focused support and marketing facility,” says Peter Farrow.

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NOMINATIONS >> Alba Power Ltd

>> Angelic Gluten Free Ltd

Alba Power started as a provider of spare parts for the famed Rolls-Royce Avon and Olympus gas turbines. The Stonehavenbased company, with offices in Houston, identified that there was a gaping hole in the market to offer exceptional service and help users of gas turbine engines who wanted to prolong the life of this technology. “We were also aware that there was a large stock of operational gas turbines in the UK that could become obsolete long before their time due to failing support from the original equipment manufacturer,” said managing director Terry Alderton. Although the main workshop facilities are strategically based to service the North Sea offshore market, Alba Power is able to bring innovative, cost-effective gas turbine solutions to the global market. Over half of the business now services the United States and the Middle East. “Our success, while operating within tough, technical and serious global sectors, is the result of a strong and high performance team. Our culture is built upon understanding the customer’s business and needs more than anyone else and delivering over and above their expectations. At Alba Power we have a strong set of values that define our culture and reaffirm why our customers choose us,” says Mr Alderton. Alba Power Inc, launched in 2012, is a wholly-owned subsidiary of Alba Power, and it demonstrates a commitment to local support in Houston, in addition to easier access for all North and South American clients. In 2013, Alba Power was a finalist in the Northern Star Awards for outstanding contribution to the energy sector, and was a national champion representing the UK in the European Business awards.

Supermarket shelves are stacked with an abundance of cookies and biscuits. But for customers with a gluten intolerance this has been the aisle to by-pass. The alternatives have been specialist shops where such delicacies have been expensive. Enter Kirsty Gillies, a chartered accountant with E&Y and founder of Angelic Gluten Free in Inverness. Kirsty, who is gluten intolerant, decided to create her own range of cookies and biscuits, with the support of Shell’s Live Wire competition and the Strathclyde Entrepreneurial Network. In 2012, she started selling to local stores and, as demand increased, she formed a relationship with a local Free-From Bakery, JG Ross in Portsoy, where her products are now made. Success followed quickly, and she has extended her range by introducing savoury biscuits, including rosemary and sea salt, and sweet chilli, in addition to her sweet ones, orange chocolate, double chocolate, cranberry crunch and ginger crunch. Sales increased and by 2013, she began shipping overseas, first to Ireland, then the Czech Republic, Portugal, Malaysia, Bahrain, Malta, Italy, Sweden and Canada. In February 2014, the Angelic team took their product to the United Arab Emirates on a SDI Trade Mission. In January 2014, Angelic achieved record export sales of a striking 68% with a turnover of £120,000. She expects to hit the £300,000 mark in the 12 months. The company has created three full-time jobs at the Highland bakery and hopes to continue on an upward trend over the coming months with further export contracts in Germany. Kirsty says: “We market our products in bold packaging, which commands attention on the shelf, and we were delighted that the judges at the Highlands & Islands Food & Drinks Awards, where we were shortlisted, commented on ‘our clever, bold and innovative packaging’.”

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NOMINATIONS >> Brewmeister Brewery

>> Cheeky Chompers

Craft beer is enjoying a boom. Co-founders Lewis Shand and John McKenzie of Brewmeister have adopted the tag-line: ‘Inherently Scottish’ for their brews made from only four natural ingredients: malt, wheat, hops, yeast and Scottish spring water. The Aberdeenshire pair, who started by making home-brew for friends, were inspired to set up the business after a road trip to the West of Scotland in the summer of 2011. This led to Brewmeister’s six brands, including Snake Venom, dubbed the world’s strongest beers at 67.5% proof, developed in a rundown steading at Keith in rural Aberdeenshire. The business has expanded rapidly and is now producing 24,000 bottles of beer a week, with a team of 14, including chef brewer, salespeople, an administrator, a driver and other brewery workers. The range of beers include: Neon Blonde, Supersonic IPA, Black Hawk, Kaiser, 10 and the Snake Venom. Brewmeister’s biggest market is overseas with 70% sold in Sweden, France, Denmark and Poland. The beer is exported to importers who sell to wholesalers and craft-beer pubs. The brewery is in the preliminary stages of exporting to Asia as well increasing its European footprint. With no money for extensive marketing, social media has been used with great success, allowing Brewmeister to build a strong following among craft beer drinkers on Facebook and Twitter. Initially the beer was sold directly in bottles to bars and nightclubs, but is now bottled for supermarkets and on tap in Aberdeen. Turnover this year is expected to reach £600,000. Lewis and John say: “Our beers are edgy, creative and unusual and there are not many breweries that can claim to have their very own supply of rock-filtered spring water underneath the kegs.”

A baby spitting its dummy on the floor is a familiar one for most parents. There’s no choice but to disinfect the dummy, and give baby a clean one. This created a business opportunity for two smart-thinking mothers. The Neckerchew - ‘the world’s first chewable dribble bib for teething tots’ - was developed by Julie Wilson and Amy Livingstone in Edinburgh. The teether is attached to a typical dribble bib and is the invention of Cheeky Chompers, the company founded by the two ‘mumtrepreneurs’ who thought up the product while on maternity leave. From setting up in May 2012 to its market launch the following February, the idea took shape across the table while their babies napped. Now Cheeky Chompers, with a turnover of £173,400, aims to build a brand that parents and gift buyers can trust for all kind of baby products. Nearly 30,000 Neckerchews have been sold since the company began trading, and 42 independent stores and nine national retailers are stocking products in the UK. Since then Cheeky Chompers are distributing in 12 countries, supported by Business Gateway, Scottish Enterprise and Scottish Development International. Cheeky Chompers has a clear idea of its markets and with the right financial resources in order to do so wants to increase exports beyond its current level of £63,000. The founders are also keen to ensure that their products are manufactured in Britain, although they appreciate that costs can be cheaper if they outsource the work overseas. “Our success in key national retailers such as John Lewis and Mothercare in addition to the range of countries we are in, in such a short space of time, helps Cheeky Chompers stand out from others in the market,” says Julie Wilson.

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NOMINATIONS >> Crocodile Clips Ltd

>> ERIBÉ Knitwear

Making maths fun is at the heart of what Crocodile Clips has been doing. And it all adds up to a great export business. Educational software development companies create programs that encourage learning in a more fun way, but few can claim to have been awarded the Queen’s Award for Enterprise. Edinburghbased company Crocodile Clips achieved that in 2000. Sumdog is its showpiece product getting rave reviews from school children who are enjoying their maths challenges and free maths contests. While Yenka, a set of simulations and modelling tools for science, computing and maths, and Absorb, for online learning, are also online products from Crocodile Clips. Sumdog was launched in 2010 and is being used by around 75% of users in elementary and middle schools in the United States. Around 98% of sales are exported from the UK, which equates to £942,000. An office in central Edinburgh houses 20 staff, all using a number of collaborative systems including an internal Wikipedia. To ensure the continuation of high-quality products, the company invests in staff development and research and development. By organising free maths tests, Sumdog runs operations from Edinburgh and interests teachers and parents in further products, which can be bought through the online credit-card system. The export strategy allows the company to sell products at a reasonable price against competitors who rely on distributors. In 2013, the cost of acquiring a new user was 14p, which is significantly lower than using online advertising.  “We have achieved all our Sumdog exports sales with a small budget up until now, without the need for overseas sales people. This has meant that we have been able to keep our prices low and achieve high penetration that we can leverage in the future” says Andrew Hall, says chief executive.

Rosemary Eribé is passionate about knitting. She wanted to create high-quality knitted clothing made in Scotland. She has built a community of like-minded hand-knitters, agents and suppliers who relish their Made in Scotland credentials. Today ERIBÉ knitwear is described as ‘cottage industry gone global’. ERIBÉ is found in prestigious boutiques, department stores and catalogues with 10% knitted for brands such as Paul Smith, Pringle, Prada and Mulberry. Over 170 knitters are connected through ERIBÉ’s business and 67% of the knitwear is exported to 230 customers in 17 countries. Last year, the company added three agents in Germany, Denmark and France which has helped increase visibility in top stores. The company’s marketing strategy over the last year also brought in first orders from South Korea, China and Russia. They now have six agents and one distributor. ERIBÉ, designing hand-knitted garments for over 15 years, has expanded its in-house production with industrial knitting machines, and at the end of 2013 won an EDGE funding award to purchase a yarn machine. In 2013, the company had revenues over £925,000, up from £635,000 in 2011. The business, based in Galashiels, the heart of Scotland’s textile industry, has set a target of £2 million by 2017 and sees Japan as a major market. It sees developing markets in the United States, China, Scandinavia and Benelux.  “We have just appointed sales support to focus on the United States’ large cold weather areas and the Scottish expats communities who love Scottish knitwear. We are having positive discussions with agents and distributors in Denmark, South Korea and Russia,” says Rosemary Eribé, a graduate of the Scottish Textile College, now Heriot-Watt University. “We are bolstered by the fact that a mere six months of initial market research in Russia and China resulted in orders over £30,000.”

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NOMINATIONS >> European Circuits Ltd

>> FAO27

Formula One tyre sensors, flood alert and ice cap monitoring, rock music amplifiers, DNA sampling diagnosis and fuel management, all require electronic circuit boards and specialised components. These are the kind of multiple clients served by European Circuits, based on the Beardmore business estate in Clydebank. The company offers a full range of PCB manufacturing, assembly and testing and sees a growing demand for UK-quality integrated electronic assembly. While it sells to businesses across the UK, European Circuits trades in ten European countries, with 60% of its growth outside Scotland. The guaranteed high quality and faster turnaround than from the Far East has given the business an advantage in European markets. The company has invested heavily in training of its staff, and equipment for surface mount, optical inspection and integrated tracking. In 2009, the firm moved to a new 15,000 sq ft building which tripled the floor space, and doubled the number of staff within nine months, which has been the catalyst for growth. Over the last five years, the company has grown by 14.4% and is realistic about achieving a turnover of over £3 million this year. Mark Briscoe, managing director, says: “We started manufacturing in 1999 and then we began assembling the circuit boards in 2000 as a turn-key service for manufacturers, with assembly and testing. We’re a highly specialist company and we are growing strongly in international markets.” Social media has helped to draw attention to European Circuits and its services. “Social media is at the heart of our innovative approach. We are very proud of our award-winning social media output. We have made a deliberate and coordinated effort to grow our own PCB online community,” says Neil Johnston.

Freshness and origin and 27 for traceability is how FAO27 got its name, as a guarantee of the provenance of fresh fish from Scotland and France. FAO27’s motto is ‘Seafood the Right Way’ as it helps to market the brands of selected family-run Scottish businesses. The company works with a group of creel boats and the only privately owned salmon farm on the West of Scotland. It helps deliver live and traceable shellfish to European markets. The message they are sending out is clear: to secure sustainable supplies everyone along the supply chain – from fisherman to retailer – has to respect the marine environment, including the maintenance and conservation of fish stocks worldwide. The company takes a collaborative, multilingual approach to its seafood partners and provides a brokerage service for sales. Working with local family-based firms and partners across Europe has brought a turnover of Euro1 million during 2012/13 period. Wholesalers, retailers, fishmongers and independent stores makeup the clientele, with a common goal to improve sustainability and increase product diversity while maintaining a consistently high quality service. “We implement measures with our partners to ensure that our supply chain secures their businesses, respects the environment and contributes to maintaining fish stock around the globe,” says Anne Moseley, Business Development Manager. The aim is to make the FAO27 label synonymous with the highest quality and provenance.

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NOMINATIONS >> Genius Foods

>> INDEZ

Genius Foods have been credited with transforming the glutenfree food market. Lucinda Bruce-Gardyne started the Edinburghbased company in 2009 in her kitchen and it has grown massively in the UK and internationally. Turnover for 2013 is over £40m. Since 2009, Genius has expanded overseas and now its range of gluten-free foods is in, North America, Europe, Australia, and the Middle East. In the last 12 months, Genius has launched in Holland, Australia, Spain and the UAE. Having only entered the UAE market in January 2014, Genius has been awarded two trade awards for the quality and taste of its products at the Gulfoods Trade Show. Genius’ white sandwich loaf won two awards, Best Newcomer and Best Functional Food, as well as being the runner up in the Bakery Category, beating off competition from over 20,000 other brands at the trade show. “The key to our export success has been engaging distributors who are well-connected and dynamic local entrepreneurs seeking retail opportunities for Genius products. It’s been about finding individuals and companies that share not only our passion for bringing gluten-free foods to consumers everywhere, but also the entrepreneurial ability to appreciate the opportunity that exists in the market,” says Lucinda Bruce-Gardyne. Using the link between Coeliac disease/gluten intolerance and the internet, the digital media strategy has built up support from consumers. For example, Genius’ Spanish Facebook page has recently surpassed 10,000 members. This support can be channelled into driving customers into stores for new launches. Designing and adapting products for specific markets has been the key to export success. Australian and US markets distribute and sell bread from the freezer, while European markets are dominated by fresh bread, baked in-store.

Modestly-sized companies can punch above their weight with a top-notch online presence. INDEZ designs ecommerce websites, powered by smart technologies which integrate with business, ensuring fast-page-load times and Global Enterprise Level Hosting. This means clients can sell their product in over 80 countries. “Our objective is to make profit for our clients. We do this by planning, designing and building ecommerce websites; then maintaining and supporting their online growth and export sales. Throughout, we can direct, advise and transfer skills and knowledge through a range of support services,” says co-founder and chief executive Peter Mowforth. The company, set up by Gillian and Peter Mowforth, was started in Glasgow in 1995 as a web-design agency but became a pioneer in ecommerce sites. The websites are built on Magento, which is used by NorthFace, Lindt, PaulSmith, Olympus and Nike and hundreds of thousands of ecommerce companies. “On top of Magento we add innovative technology that pushes websites to new levels of performance. With INDEZcore technology we push new boundaries in responsive design, making the sites render correctly on desktops, laptops, tablets and smartphones. Our approaches to export and internationalisation mean that local companies can sell profitably into truly global markets. With support from our hosting partner Rackspace, we have devised solutions that ensure blisteringly fast delivery of ecommerce content across the planet,”

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NOMINATIONS >> Insignia Technologies Ltd

>> Lightbody Ventures Ltd

Shoppers often pick up food items in a supermarket with insufficient information on the label. At best, the ingredients and use by date make up much of a product packaging. It is often unclear where products are originated and how and when they should be consumed. Insignia Technologies, based in Biocity, Newhouse, Lanarkshire, have developed innovative packaging technology using smart pigments and inks to warn when food is past its best. Such labelling, including its Waste Watch Food Fresh indicators, highlights the most relevant and useful information about the freshness and the quality of the product. This will do much to help reduce food waste, an increasing problem for European society where 18 million tonnes of edible food ends up in landfill each year. The cost to an average family is £600. Insignia Technologies’ export market includes North America and Europe, selling to large wholesalers and retailers. In addition to this, a research project is being carried out with an Argentinian packaging company supplying labels to a fast food restaurant chain. Export revenues in July 2014 are around £250,000. Founder and director Erik Smyth, who started his career in retail with Safeway, worked with Professor Andrew Mills, of Queen’s University, Belfast, to develop the self-timing film and disposable labels. “Our revolutionary new smart label timer has received media and potential customer interest across the globe,” he says. The company won best new concept at the UK Packaging Awards in London last November. It chairman is David Kilshaw who has been chairman of a number of leading Scottish food companies including Joseph Robertson and Lazy Day Foods.

Martin Lightbody is a well-known bakery entrepreneur in Scotland who created Lightbody Ventures in 2008. He has used his extensive food industry knowledge to drive innovation through licensing deals with major entertainment brands such as Disney. It has been about linking quality food products, such as biscuits, cakes and fruit crisps, with recognised campaigns and characters, such as Winnie the Pooh, Mickey Mouse and Shrek. This strategy has driven the company to become one of the biggest branded bakery outfits in the UK. The company is responsible for boosting brand licensing, designing the packaging, developing the products, manufacturing and delivery to the wholesaler. The business was successfully taken over by Finsbury Foods just over a year ago in a £37 million deal and Martin now acts as chief executive. All aspects of administration and production are carried out from the company’s base in Glasgow. Employees at Lightbody Ventures have years of experience in marketing which increases the value of the branded products. It means that branded bakery products can be delivered to retailers including Asda Walmart, Tesco and 7-11. International strategy is one of the main focuses for expansion. While the cake and snacking market is evolving in line with changing consumer needs, with healthier, lower-sugar products in demand, the celebration and treats segment is still growing strongly. Business in this area has been developed in Australia, Japan, the Ukraine, United State and the Middle East. In 2013, the turnover was £3 million, with exporting sales over 50% and is set to grow to 70% over the next two years. Martin Lightbody said: “We’re passionate about quality food, customer service and innovation in the bakery sector. We see strong opportunities for increasing our exporting share.”

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Scottish

EXPORT awards

2014 Wednesday 28 May 2014

Glasgow Science Centre

Guest tickets can be purchased for the event and we would encourage attendance from nominated companies as well as other businesses and organisations associated with the export agenda in Scotland. Included in the ticket price: • Arrival drinks reception • Official dinner programme • 3 course meal • After dinner speaker Tickets are available on a first come first served basis with tables of 10 places available at £850 plus VAT or individual tickets at £100 plus VAT In association with

Sponsored by

Contact: Jackie Malloy. BQ Scotland Events Manager on 07968 146605 or email jackie@room501.co.uk


NOMINATIONS >> Lingo24

>> Loch Duart

Exporters frequently need to speak the local language. Yet the UK’s language skills have been in sharp decline as English has been the global business language. That’s no excuse. Lingo24, set up by Christian Arno, is a translation company with a strong focus on developing new technology to cross language barriers. The company, founded in Aberdeen in 2001 and now based in Edinburgh, helps exporters to generate business in foreign language markets, as well as exporting. The company, with over 200 full-time staff worldwide, offers both professional human translation and machine translation, and can assist businesses with foreign language internet marketing and associated technology support. Lingo24 still does most of its translation into the top European languages, but demand for emerging market languages such as Russian, Chinese and Brazilian Portuguese is growing strongly. Lingo24 has offices in London, Germany, Panama, Romania, the Philippines and New Zealand. Most of the translation work is carried out on Heart, the firm’s translation platform, while they have developed an easy-to-use online interface for clients. Lingo24 is a web-based, global company and achieves high rankings in country-specific search engines, competing on an equal footing with local competitors. Lingo24, which translated 65 million words a year for business, has relied extensively on web marketing to increase its brand profile in both established and new markets. In Germany and Switzerland, the firm employs freelance copywriters, bloggers and social media managers to ensure its marketing fits the local culture. The team also attends industry events to network with potential clients and promote its services. These range from IBC Exhibition in Amsterdam, where it joined an exhibition booth with Scottish Development International, to Localisation World in California and the World Food Expo in the Philippines. Turnover in 2012 was £7.1 million and is the 62nd largest translation agency in the world.

Smoked salmon is one of Scotland’s most popular food exports. Loch Duart, based in South Uist, has become famed for its ‘Flaky’ smoked salmon since 1997. In 2008, Loch Duart bought the smokehouse to produce its distinct quality product, which exported to a number of countries. The company’s salmon was chosen for two royal occasions: ‘the wedding of Prince William and Kate Middleton in 2011 and the Queen’s Jubilee in 2012. Today nine sites are farmed in Eddrachillies by employing around 60 local people but, due to extensive fallowing, with only six sites in operation at any one time. Loch Duart’s approach to rearing salmon gives priority to the health and welfare of the fish, to the long-term protection of the environment and to the delivery of an outstanding product to the consumer. “We produce approximately 5,000 tonnes a year through a fullyintegrated system to maximise the health of our stocks. This is around 3% of total Scottish production and is distributed in UK and overseas markets to customers seeking better quality salmon from responsible and sustainable aquaculture,” says its founders. Every stage of rearing, harvesting and supply is managed by Loch Duart, which defines a long-term role for aquaculture as an essential and viable part of the food supply chain. Stocks of wild fish are dwindling through overfishing – and the global influence of aquaculture is growing with tonnage of farmed fish overtaking wild Atlantic salmon. “Our ultimate objective is the delivery of an outstanding salmon to the consumer. Here, in the cold, clear waters of northern Scotland, we are using safe, sustainable techniques to produce lean, fit fish – salmon as salmon should be,” say the directors.

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NOMINATIONS >> Mackies of Taypack Ltd The world loves potato crisps – or chips as they are called in many overseas countries. Mackie’s Crisps are the creation of Mackie’s at Taypack, founded in 2009 as a joint venture between Perthshire potato farmers, the Taylor family, and Mackie’s of Scotland, renowned for their ice cream. The Taylor family are experts in potato production and sourcing. They have been growing potatoes in Perthshire for several generations. The Mackie’s have over 20 years’ experience in producing ice cream from their farm in Aberdeenshire. “Together we have focused our expertise in creating our range of Mackie’s Potato Crisps, which are now available in around 20 countries around the world. As our company carries on growing we remain committed to our family values and we continue to place heritage and provenance at the heart of everything we do,” says marketing manager Rebecca Russell. The crisps are made in Perthshire, at a production a few miles from Moncur, the Taylor’s farm, and the process is integrated ‘from plough to pack’. Mackie’s Crisps are made with naturally grown potatoes, cooked in sunflower oil. “Our potatoes are naturally grown and are the best varieties for crisping. Our seasonings, too, are all natural and have been carefully selected to create our range of traditional and Scottish flavours. But what really sets Mackie’s Crisps apart is their distinctive texture and taste; they’re produced using a unique gentle cooking method which protects the flavour and quality to ensure a great crunch, fresh potato taste and dry texture – so what you’ll taste is the potato crisp, not the oil!”

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>> NomadiX Media Media screens and displays are ubiquitous at bus stops, train stations and airports. But they are static and are limited in their interaction with the public. This prompted NomadiX to come up with ‘Walkers’ and ‘Projections’, bringing infotainment right to the consumer. NomadiX, formally known as Nomadic Media, uses its eye-catching technologies to create an immediate impact with consumers. The engaging technology raised brand awareness more effectively through engaging media. Unlike fixed media, Walkers can display relevant information anywhere by attaching screens onto a harness worn by an employee. It can also be used to profile crowds of people at events to understand the consumer’s needs and concerns. In addition, Projections offers a static media on a larger scale, using light and projected films to be displayed in three dimensions onto buildings and monuments. One client was Levi jeans where NomadiX organised a visual ‘weekend blitz’ beaming messages onto streets across the style capitals of Europe. NomadiX Media, based in Glasgow, offers its services throughout the UK and Ireland. On the international front, it has successfully launched two new franchisees in both Colombia and South Africa generating over £170,000. The company, using Mandarin speaking Scots, worked with the Scottish Government and SDI on its ‘Better City, Better Life’ visit to the Shanghai World Expo in 2013. The firm’s intentions are to expand globally, and they have been building a diverse team bringing foreign language skills, management and international relations development. “Our product is very innovative and unique in the market. It is the only portable system in the world that combines digital signage, audience measurement and a campaign-specific trained brand ambassador,” says Samir Rhazali, business development manager.

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NOMINATIONS >> Online Electronics Limited

>> ResDiary.com

The oil and gas industry uses pigging to clean and maintain operations in the masses of pipeline, pipework and umbilicals. Aberdeen-based Online Electronics Limited (OEL), set up in 1996, has become a world-leader in the development of pipeline pig monitoring equipment and pipeline data communication. For example its 4000D MAGSIG detects, signals and logs the passage of magnetic pigs in pipeline and FPSOs (floating production storage and offloading vessels). The firm’s domestic and international trading strategy has insured business in Europe and the United States, with offices in Houston, and branches in Dubai, UAE, Perth, Australia and Rio. Export successes in 2013 mark the first full year of trading for Online Valves Ltd, a subsidiary already trading with over 25 overseas locations, building strong working relationships with their clients and supply chain. This has helped ORL deliver 25% year-on-year growth which has been consistently achieved over the past four years as the organisation has expanded into an additional 30 overseas markets, with an Asia Pacific office in Singapore. In 2013, the company won the Society of Petroleum Engineers Offshore Achievement Award for Export and holds the Queen’s Award for Enterprise. “All of our products and services are geared to making our clients operations more efficient, certain and safer. Our technical expertise is applied to a wide range of applications covering routine pipeline operations to major international pipeline projects. We’re passionate about client needs, treating clients fairly, being honest about our products and services, acknowledging and dealing with challenges promptly. These are some of the crucial traits that have gained us the loyalty of our clients over the years,” says Brian Gribble, managing director.

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Mike Conyers knows all about the hassles of managing bookings and reservations in a busy restaurant. He has built and managed 14 restaurants from scratch. He understands the frustration of turning away potential customers when the restaurant is teeming, and then finding it empty half an hour later. He set-up ResDiary as an online diary, planner and organiser for restaurant operators and chains using cloud-based technology. The system integrates bookings, confirms reservations and allows the restaurant to manage covers more effectively. This kind of digital yield management is something the airlines have been doing for years. The company, based in Glasgow city centre, launched in 2006 and initially catered for only UK restaurants. Since then around 5,000 restaurants in 21 countries have signed up to the secure system, directed by a UK based sales force. Restaurants pay a monthly fee of £99. Export revenues have grown from £74,000 to £449,000 over the last three years. ResDiary’s partnership with the likes of TablePouncer.com also gives restaurants the ability to offer lastminute availability and offers. Mike Breewood, the chief operating officer, says: “Our aim was to allow the restaurant operator to use any device that could run a browser to access their diary for which we would charge a flat month fee, irrespective of the number of bookings we processed”.

www.bq-magazine.co.uk/export-awards


NOMINATIONS >> Subsea Technologies Ltd

>> The Innis & Gunn Brewing Company

Subsea Technologies was formed to provide engineering solutions for control systems that operate in the harshest underwater environment and are vital for the oil and gas industry. The Aberdeen-based company is focused on designing and developing products that can be deployed in this worldwide industry. The company has an office in Houston which services its market in the Gulf of Mexico and South America. Last year Subsea Technologies was named winner of the Grampian Award for Innovation for its connectors. These connectors solve one of the standing challenges of subsea riser and umbilical design involved with the connection of these vital subsea systems. “Since STL was formed in 2010, it has been our goal to create well intervention technologies which are recognised by the industry as a step change in offshore safety and technical innovation. The XR and SLIC connectors deliver on this aim and we are very proud of them. They are unique within the industry, a result of our design approach, which always begins by taking an industry problem and seeking a brand new solution,” says Drummond Lawson, managing director. “Both the XR and SLIC connectors have proven commercially successful and we now plan to develop the XR for the drilling riser market.” The company supplies these products globally to a number of blue chip offshore operators and service companies, including Aker Solutions, GE Oil & Gas, Halliburton, Helix Energy Solutions Group, Shell and Superior Energy Services.

Dougal Sharp of Innis & Gunn discovered his pioneering ‘Oak Barrel’ beer almost by accident. The result of another project involving an ale-finished whisky for William Grant, of Grants Whisky, it was a process which led to gallons of beer being used over time to season oak barrels which would then flavour the whisky. The beer was tipped away, until distillery workers decided to sample it and were amazed at how delicious it tasted. Since then Dougal Sharp’s priority has been perfecting this unique oakaged beer. And he’s found a ready market from beer connoisseurs around the world. The first Innis & Gunn oak barrelled beer is now under the label of ‘Original’ and it set the foundations for a range of other beers which have just as much character and appeal, including: Toasted Oak, Rum Finish and Scottish Pale Ale. The business was established in 2003 in Edinburgh and is considered to be a specialist independent brewing company and has been successful overseas, particularly in Canada where it has become the most popular British bottled beer sold in 2012. Turnover in 2012 was £9.137million, with exports of 80% of its products. Douglas Sharp says: “Innovation has always been at the heart of the business. In our three international markets, Sweden, Canada and the United States, our ambition is to grow a business of scale, instead of having lots of small markets.”

www.bq-magazine.co.uk/export-awards

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NOMINATIONS >> Thomas Hancock & Co

>> Totseat Ltd

The name Charles Mackintosh is synonymous with the waterproof raincoat. But his colleague Thomas Hancock, who helped invent the famous vulcanised ‘Mac’ is less well-known. This has been changing thanks to the creation of new men’s outerwear label, set up two years ago by Daniel Dunko and Gary Bott, who both worked for Mackintosh. In 2007, Daniel Dunko sold the company to its Japanese distributor and in 2011 both Dunko & Bott left Mackintosh to start Hancock. Within three months, the company had created a ‘cool’ new brand, opened its factory in Scotland and designed and manufactured its first collection, which was taken to Japan. In 2012 and 2013 Hancock was invited to participate in the prestigious Artisan Day at Barney’s New York. In 2014, new showrooms are opening in Dubai, Hong Kong and Taiwan. The handmade rubber-bonded raincoat still has a massive following as ‘modern heritage’. Daniel Dunko is renowned for his product expertise and credited as the designer behind Mackintosh’s branding in recent years. In 2013 both Edifice and United Arrows dropped Mackintosh altogether in favour of Hancock. The strategy has been to build the brand in Japan first, which has inspired greater confidence among global retailers who look to the Japanese market in search of ‘the next big thing’. By continuing to visit international markets, the firm understand the retailers and the customer. By presenting its new seasonal collection at Pitti Uomo in Florence, Hancock was able to open new markets and start working with retailers in New York, Paris, Amsterdam and Melbourne. Daniel Danko says: “Gary discovered a book by Thomas Hancock written in 1856, which contains his life’s works, his inventions, patents and original Victorian etchings and designs for outerwear, bags and shoes, this is the inspiration for all of our collections.”

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When she went out Rachel Jones wanted a clean and safe seat for her baby. She often found high-chairs were grubby and broken. It was difficult to find a suitable place, so she invented Totseat, a fabric chair harness. [Her story was featured in BQ Scotland in 2011]. It’s pocket-sized and designed to safely anchor a toddler in an adult chair. It was designed with safety experts and has been thoroughly tested. The first Totseat was made in Edinburgh from Rachel’s wedding dress, but now it is made from a strong and comfortable cotton mix, which is more robust. Totseats carry a lifetime guarantee but there have been counterfeit imitators. Totseat has been taking part in trade shows in Europe and Asia where it is increasing its sales. In 2013, Totseat was included in the Best of British in Beijing, and since then sales have increased around the world. It is now sold in over 40 countries, including Japan, the United States (13%) and Germany (10%), and 78% is exported, generating £394,000 income, with turnover £500,000. Combined with Totseat is a children’s cuddly baby called Oobicoo, which fits into the Totseat once the baby has outgrown it. “We are working with MBA students at the University of Edinburgh Business School to look at the emerging market of Croatia. In addition, we are supporting our US distributors with a tailored product for Target and have signed a worldwide licensing agreement with Paddington Bear to develop our first licensed character Totseat. Export will remain a core competency adding value, distributors’ networks and profit as the business prepares for a three to five year exit or trade sale,” says Rachel Jones.

www.bq-magazine.co.uk/export-awards


NOMINATIONS >> Vegware Ltd An eco-friendly food packaging company is in the vanguard of a biodegradable revolution within the food service industry. Vegware, founded in Edinburgh in 2006 by Joe and Lucy Frankel, specialises in manufacturing completely compostable catering products for food outlets across Britain, all keen to jump on the ‘green’ wagon by combating bad waste habits through the process of recycling. The message is that reducing waste is a good thing, but once a plastic box has been soiled by food, it then becomes non-recyclable. This is not the case with Vegware boxes, which biodegrade in less than 12 weeks. Vegware is part of the movement encouraging zero waste, helping to reduce food waste and prevent landfills being used to store it. More than 250 types of product - including cutlery from corn, drinking cups, plates, bowls and takeaway boxes - have been made and sold since the company began in 2008 and all are made from renewable or recycled materials. Unlike styrofoam, which is used to form most takeaway boxes, bagasse, a fibre that remains after sugarcane have been crushed, is a main material. It is an environment-friendly alternative and allows food to breathe which keeps it as fresh and crisp. Products are available throughout the world through United States, South Africa, Europe and Australia and more recently in the UAE and New Zealand. Customers range from contract caterers and food distributors to small food outlets such as cafes and delis. Turnover is expected to reach £6.5 million and the firm has been named the third fastest growing company in Scotland. The UK’s first and only completely compostable food packaging firm has also won several awards for environmentally friendly schemes and setting up partnerships in order to reduce food waste. They include Outstanding Contribution to the Scottish Environment 2013, UK national champion in the European Business Awards 2013/14, and Vision in Business for the Environment of Scotland 2013.

www.bq-magazine.co.uk/export-awards

>> Vermilion Software Ltd Today’s asset managers, private wealth companies and hedge fund companies need scrupulous financial management to satisfy customers and regulators. Vermilion Software, set up in 2003, signed-up its first customer in 2005, and now has over 50 clients. The company’s Vermilion Reporting Suite (VRS) is a one-stop, browser-based solution designed to address all critical business issues concerning client reporting and client communications. VRS is designed to fit into established business processes, using existing data which can then be enhanced with market commentary. This generates personal client reports which can then be sent on. It is underpinned by a total process audit feature, satisfying corporate demands for compliance, marketing requirements for branding and business requirements for timely, accurate and professional reports. VRS comprises six key integrated services: Workflow Service; Data Gateway Service; Commentary Service; Report Generation Service; Distribution Service and Account Management Service, VRS delivers a transparent and proven method of streamlining the entire client reporting process. Vermilion Software opened an office in London earlier this year to complement its Boston and Singapore offices. The business has achieved more than £2 million in exporting sales and sees great opportunities in the Asian market. It is offering a 24 hour sales support around the globe. “Our software enables transparency of reports and its content. It enables clients to deliver the information that their own clients are demanding. In today’s market everyone is being squeezed so it is about delivering efficiencies and lowering the costs,” says Simon Cornwell, co-founder and global sales and marketing director.

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INSIGHT

SPRING 14

legacy will live on after games

It is not just the athletes that can win gold at the Glasgow 2014 Commonwealth Games; it is a key opportunity for Scottish businesses to also secure big victories

This year is a unique one for Scotland as it hosts not just the Commonwealth Games but also the Ryder Cup at Gleneagles and all the 400 plus events associated with the Year of Homecoming. Of course, many businesses have already gained from the Games long before they begin in Glasgow in July, having been awarded

SPECIAL REPORT | SPRING 14

contracts related to these events, with around 73 per cent of all Games-related contracts going to Scottish companies. And there are still direct Commonwealth Games-related opportunities to be had with around ÂŁ12m worth of contracts yet to be awarded. The influx of visitors, many of them involved in key positions in businesses, is an opportunity

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that Scottish companies can capitalise on and win business not just for now but for the future as well. There is, for example, a large delegation coming from Gold Coast, the Queensland city that is hosting the Commonwealth Games next time around in 2018. Scottish businesses that have already won

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Games-related contracts will have an opportunity to network with the Gold Coast delegation and see if there is a possibility of them winning similar contracts for next time around. Linda Murray, head of Scottish Enterprise’s 2014 team leading efforts to encourage economic development opportunities from Scotland’s ‘year of sport’ says: “One of the key opportunities is for businesses to not only win Games-related contracts but to leverage those opportunities to win more work based on those successes. “It has been one of the advantages of hosting the Commonwealth Games in Glasgow just two years after the Olympics in London. We have looked carefully at the experience of companies that won business around the Olympics and shared that knowledge and tailored our advice for firms seeking opportunities now.” There have already been 72 business engagement events held to highlight the opportunities around the 2014 events that have been attended by around 9,500 Scottish businesses with the biggest of these having been at Celtic Park in Glasgow which hosted around 400 enterprises. Technology specialists NVT is an example of a company whose Commonwealth Games contract is already making a significant contribution to its business. NVT will be responsible for the planning, design and implementation, testing and operation of the technology infrastructure for the Commonwealth Games. The company, headquartered in Bellshill, Lanarkshire will oversee the Commonwealth Games computer network and technical infrastructure across all Games sports venues, the Athletes’ Village and the main media centre. As part of its Commonwealth Games programme, NVT is creating 15 new Modern Apprenticeships, of which 13 have already been filled giving young people valuable work and training on such a prestigious project and building the company’s skills base. Given that prior to this the NVT workforce was 75-strong then it is clear the scale that the Games can add to

EXPORTING AND INTERNATIONALISATION

It is a great opportunity to show Scotland’s assets in a very positive light and demonstrate how we can deliver global events and services

INSIGHT

the company’s business. Linda Murray says that the cumulative effect of all the events, the visitors that will attend them and the global media focus, will put Scotland in the spotlight. She says: “It is a great opportunity to show Scotland’s assets in a very positive light and demonstrate how we can deliver global events and services innovatively and to extremely high standards.” As part of Scotland’s ‘year of sport’ Scottish Enterprise is to host a major business engagement programme around the Games itself. The programme is designed to connect Scottish businesses with new and emerging international commonwealth markets, opening up new avenues for growth and collaboration. This programme will have a very strong sectoral focus, seeking to highlight Scotland’s strengths in areas where the country already has capabilities and where the global opportunity for growth is greatest. These will include oil and gas, renewables, technical textiles, creative industries, food and drink and education in the form of Scotland’s universities. On the eve of the Commonwealth Games a major business conference will take place in Glasgow. This will highlight the UK and Scotland as a great place to invest and do business and will be attended by over 200 senior executives. Business and political leaders from across the Commonwealth will address the event which will focus on securing new opportunities, showcasing key sectors and considering the issues that companies and economies across the world face. The conference will be jointly organised by the Scottish Government and Scottish Enterprise, and UK Trade & Investment on behalf of the UK Government. A key part of this approach in capitalising on business and economic development opportunities will be seeking to ensure that they are not temporary but can be built on to deliver for the future. If businesses do seize the opportunities available there is the possibility of benefits for the economy of Scotland lasting long after the Glasgow Commonwealth 2014 closing ceremony. n

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INTERVIEW

SPRING 14

YOU’VE GOT A FRIEND IN SE Taking your first steps into an export market as a business can be a daunting prospect It is difficult to know what markets to target, how to enter the market in the most efficient way and to know whether the business has everything in place to make that jump from domestic to international trade. Having a friend in your corner that understands, that can talk you through what you are planning and look at where the problems may lie can make a key difference. Neil Francis, international operations director at Scottish Enterprise (SE), says that Scottish companies can access just such a service free through one-to-one support from SE’s export advisers. “Our export trade advisers will ask straightforward questions about the current state of play in the business, their target customers and their future aspirations and ambitions,” he says. Francis says that a trade adviser can guide you through some of the complexities of the international market that you may not have foreseen “One example is that people approaching the American market tend to think of the US as being a single country and expecting consistency throughout. But a lot of the regulation that affects business is done state by state,” he says. “You have to be aware of these things or your export efforts can hit problems.” SE offers free export training through workshops and online and potential funding may be available to help bring in external exporting expertise to a company if that is needed for a particular export market. Francis says that SE worked with more than 2,000 companies to help them develop their international business in 2012-2013. “Just less than 230 of them have the expectation of raising international sales by more than £1m,” he says. These high value international projects are expected to lead to

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an increase in export sales of £818m over the next three years – up from the £733m figure achieved in the 2011-2012 financial year. These are the projects that will deliver most for the individual companies and collectively for the Scottish economy but Francis stresses: “We will talk to any Scottish company with an ambition to export.” He says that help in planning strategy and building export skills through finding new markets and setting up overseas, export advisers can help whatever the size of the business or whatever the sector. It is not a one-size-fits-all service, he says, but is based on an understanding that growing

We will talk to any Scottish company with an ambition to export Scottish businesses’ needs vary depending what stage they are at in developing their export strategy. For those that are not yet exporting, there is a need to understand the opportunities and the potential that exists in new overseas markets. There is a need to provide local, relevant and accessible business support and there is a need for training, guidance and tools that are practical and specific. “There may, for example, be businesses whose product is very attractive to a particular overseas market but for some reason the packaging that has worked at home just won’t work in that

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international market,” Francis says. “It is the kind of issue that can completely blindside a company and may mean they put a lot of investment into something that is just not going to succeed because of one limited issue.” For existing exporters the emphasis is less on building up skills and capabilities and more on introductions to specific markets and providing access to particular business networks. There is help with strategy planning and marketing advice and help with building a Scottish company’s presence in-market. There is also support to enter and expand into new markets and geographies. Francis says that help is tailored to exactly the scale of the opportunity and how quickly it catches on. “With a technology business they may have no revenue but instantly go global. This creates a very particular set of demands that the business needs to meet to seize the opportunity.” While the value of exports have increased – rising 6% year on year to £26bn in 2012 (a figure that excludes oil and gas) – the number of exporting businesses is still comparatively narrow. So a key facet of export advisers’ work is to encourage more companies to realise their ambitions and view international trade as a vital part of their growth strategy. Francis stresses that it is not just about increasing international sales, it is also about the business’s mindset. “We want Scottish companies to think internationally to become more productive and innovative and to be up there with international best practice.” n

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INTERVIEW

SPRING 14

LARGE AND SMALL – LET’S WORK TOGETHER

SPECIAL REPORT | SPRING 14

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INTERVIEW

A new approach from Scottish Enterprise aims to see Scotland increase its innovation, company base and exports all through the one programme. Ken Symon talks to Jim Watson Many international eyes are turned to Norway to see what we can learn from it and other Scandinavian countries. A new programme being developed in Scotland follows and adds to work being done there to boost innovation, smaller businesses and international sales. Jim Watson, director of enterprise and innovation at Scottish Enterprise, says that SE is developing a programme that will invite large corporates to get smaller companies in Scotland involved in supplying their innovation requirements. “We are discussing with corporates right across the piece from financial services to oil and gas to look at what their innovation requirements are and how we can encourage them to put a call out for innovation to the Scottish company base.” Watson and his team will then work with small and medium-sized companies (SMEs) that might bid to carry out that innovation. Under such a deal the large corporate would put in an investment and the SME would service that call for innovation. SE would be involved as a third party in the deal contributing financially to share the risk and working to support the SME. Watson says: “The advantage for the SME is that they’ve got a customer at the end of it. It’s a huge advantage to know that if the innovation process works they’ve got an end customer who will buy that product or service, rather than developing something and hoping it might work.” The other advantage for the SME, Watson says, is that SE would work with them to build their capacity, helping with the innovation process and working with them on their sales and marketing capability. “What we’re trying to do is to position the SME to then sell elsewhere so we would be looking with them at other market

EXPORTING AND INTERNATIONALISATION

opportunities beyond the programme and the innovation process. And we would encourage customers to think internationally as the global market is where the potential for growth is. “From a large customer perspective what they get is a stronger supply chain” and greater confidence the SME can deliver to expectations. Watson stresses it’s not just about technology. “It’s innovation in its widest sense – it could be business model innovation, design innovation, as well as development and creation of products and services.” SE is currently talking to about 15 large corporates, discussing their innovation needs and seeing whether they would be prepared to

– Statoil’s experience with the Norwegian programme is that it adds about £700 million annually in sales. “It’s central to their business model now – as it adds so much to their top and bottom line,” says Watson. Statoil already have a strong relationship with SE and they have offered their support to help develop a programme in Scotland. “This is an ideal situation,” Watson says, “as they are a great example of how a large corporate organisation can benefit by placing innovation at the centre of their strategy.” SE will work with large corporate companies from Scotland and those based internationally as the programme is not restricted to large

What we’re trying to do is to position the SME to then sell elsewhere so we would be looking with them at other market opportunities beyond the programme and the innovation process

put out a call to Scotland’s SMEs to work with them to help meet those needs. In developing the approach SE has been taking advice from Innovation Norway, who have a similar programme, and Statoil, the oil and gas giant, which has been a key part of a similar highly successful programme in their home country. Watson says that the Norwegian experience proves there can be a significant benefit to large companies who get involved too

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companies with offices in Scotland – the only condition is that they work with Scottish SMEs to supply their innovation needs. Watson says: “The primary objective here is for SMEs to develop. We want to stimulate more demand for innovation from a very capable SME supply chain in Scotland. “By investing with large companies downstream benefits will be gained by the SMEs which in turn creates positive impact on the wider Scottish economy.” n

SPECIAL REPORT | SPRING 14


OVERVIEW

SPRING 14

India is emerging as one of the titans of the global economy. It is home to some of the world’s most successful companies and its business structure is being transformed. This means that huge opportunities exist for companies with the ambition, determination and wherewithal to succeed

INDIAN MARKET IS KEY TARGET FOR SCOTTISH BUSINESS Scotland’s connections with the world’s largest democracy are longstanding. They lie in the trade of commodities such as tea and textiles, but are being replaced with technology and training in industries such as life sciences, IT and business services. India’s vibrancy can be attributed to a series of factors with the key one being the reforms, dating back 20 years, which saw the country become more open to the influence of the outside world. Those reforms were followed by economic advancement and increased foreign investment and led in turn to a growing urban middle class population as well as a boom in information technology and property. In the economy of 21st century India, a country with a population of 1.2 billion, sectors such as infrastructure, energy, IT, manufacturing, education, business and financial services and healthcare are enjoying strong growth. And it’s that continued progress which makes it a key destination for Scottish firms with export ambitions. Julian Taylor, Executive Director – Asia Pacific at Scottish Enterprise, said: “While growth in some traditional markets for Scottish products and services has slowed,

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there are excellent opportunities in new markets with India being a prime example. “As Scotland increases its competitiveness on the global stage it is essential that our firms are alert to new possibilities. “The Indian market epitomises these opportunities. Whilst entering a market like India does require some degree of capability in international trade, our research tells us that companies typically over estimate the difficulties and under estimate the rewards. The fact that English is commonly used as the language of business is an immediate positive start and there are many longstanding relationships to build on. And of course, a mutual love of whisky brings us closer still. “Innovation has been key to India’s continued growth and there is a hunger for new ideas and collaboration. There are some things at which Scotland is simply amongst the best in the world and our undisputable track record in technological innovation and cutting edge research

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provides a real platform for engagement. Sectors like life sciences and health care offer real potential.” One innovative company already making its mark in India is Perthshire based company This-tel. They recently signed a deal with Indian IT firm Crane Global Solutions to bring their digital pen technology to the Indian healthcare market. The partnership will revolutionise the way data is captured, aggregated and reported, putting India at the leading edge of world e-health technology and bringing healthcare advantages to both urban and remote rural communities in India. There is also potential in sectors in which Scotland has already established its reputation. Julian Taylor continued: “Our strengths in sectors such as business services and education mean Scottish companies are ideally placed to gain new markets in India. “There are a number of Scottish universities already building relationships, undertaking collaborative research and educating students in India, but further opportunities arise, for example the Indian Government has

EXPORTING AND INTERNATIONALISATION

recently outlined plans for the creation of 40 million new university places by 2020 and the building of 11,000 new secondary schools. This has corresponding opportunities in infrastructure investment – especially ‘low carbon’ areas such as water, waste and energy management.” Scottish Enterprise can offer a wide range of support to firms considering India as a market, particularly in terms of preparation for entry. The Smart Exporter programme, delivered in partnership with Highlands & Islands Enterprise with funding from the European Social Fund, provides all types of support, from one-to-one advice to help explore markets and opportunities, strategy development and preparing to export workshops, to online learning tools and much more. In addition, the Scottish business trade missions programme offers an excellent platform to visit an export market, conduct market research, appoint an agent distributor or visit existing clients. Scottish Development International, the international arm of Scotland’s enterprise agencies, has offices in

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OVERVIEW

New Delhi, Mumbai and Hyderabad and their on-the-ground experts are on hand to help companies make the most of the visit. From helping to arrange meetings with a potential client, to introducing them to local chambers of commerce, local government and UK Trade & Investment, the team in India are the best advisers to help globally-minded companies take the first steps into the market. The next trade mission to India is scheduled to take place in September 2014 and companies can register their interest to participate on the Scottish Enterprise website.

Get involved To register your interest to participate on a Scottish Business trade mission and learn how Scottish Enterprise can support your export ambitions, visit www.scottish-enterprise.com/international

SPECIAL REPORT | SPRING 14


INSIGHT

SPRING 14

Protect your most valuable assets – your brand and reputation Prevention is better than cure when it comes to safeguarding your intellectual property, yet only 4% of UK businesses have an IP strategy The biggest risk that a company faces when it enters a new market is that a rival effectively steals its business. Martin Layton, an intellectual assets specialist with economic development agency Scottish Enterprise, has seen too many times just what damage can occur. In one case a Scottish company had early stage discussions with a potential Chinese distribution partner. But the negotiations didn’t work out so the Scottish company went on to hold talks with another potential partner – only to discover that the first business they had talked to had already filed their trademarks. In other cases, third parties in China have registered trade marks belonging to Scottish businesses, who were then prevented from importing their product to China. “In China, as in other jurisdictions including the UK, it’s a ‘first to file’ system where the first person to file to register a trademark can secure a monopoly right to use that mark,” Layton explains. “What is tending to happen is that third parties are able to use a registered trademark to undermine the legitimate business looking to enter the territory.” In certain cases such IP theft may have happened completely without a company’s knowledge until they try and enter a foreign market – only to find someone has beaten them to it by registering what is their own intellectual property. As the World Intellectual Property Organisation stresses, all IP rights are territorial – they only offer protection in the country or region where

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they have been applied for and granted. You have to make sure you have the rights to offer your goods and services in each new market you are seeking to enter. This is a case where prevention is very much better than cure. As Layton says: “It typically costs a great deal to file an action to get trademarks filed by such third parties overturned. It is also a huge distraction from a business’ core activity.” Given the uncertainty and length of the process, Scottish companies can even find themselves having to adopt different brand names in order to enter new target markets.

It typically costs a great deal to file an action to get trademarks filed by such third parties overturned But despite this type of cautionary tale being around in the marketplace, there are still very few Scottish companies that seem to do enough about it. Specific Scottish figures are hard to quantify but the UK Intellectual Property Office research suggests that only 4% of UK businesses have an IP strategy in place. Layton says that dealing with this should be among the first items on your to do list before you enter an international market.

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“When companies look to internationalise, intellectual property and an intellectual property protection strategy are fundamental to enabling them to protect themselves in new markets,” he says. But Layton stresses that while it is vital that a protection strategy is put in place it is equally important that it is the right one for the size, scale and type of business. He explains: “You can throw a lot of money at IP protection, so it’s important that it is proportionate to what the business requires and that the protection strategy is closely aligned with the wider business plan and internationalisation strategy.” The ‘jewels’ that companies need to consider ‘securing’ include patents to protect technical innovations, trade marks to protect brand names, registered designs to protect the look and “eye appeal” of products and copyright to protect creative work. Layton feels that many businesses do not know what they possess: “We can help businesses to identify and manage their key intangible assets.” He says that protecting your brand and other intellectual assets can not only stop damage but also they can be employed to create further value for the business. Companies may be able to ‘bundle up’ their intellectual assets and realise revenue by selling them on – either by licensing them directly or working through a franchise model. “This can allow Scottish businesses to enter overseas territories that they would otherwise be unable to reach”, he says. n

EXPORTING AND INTERNATIONALISATION


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The move from national to international business is an exciting step which can significantly grow your business. At Smart Exporter, we can help you discover your export potential with our free advice and resources. Speak to one of our Export Advisers to get things off the ground. Visit www.scottish-enterprise.com/international or call 0800 019 1953.

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Exporting and Internationalisation  

A BQ2 Special Report

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