“There are opportunities in the chaos,” said Aaron Gooding the marketing manager at FG Wilson, hitting on one of the key messages from the World Trade Summit in Belfast on 13 June. Despite all of the uncertainty around Brexit, it’s up to businesses to make the most of it – especially the UK’s exporters.
With the theme of the day being planning for Brexit, there were also plenty of quotes from the famous Donald Rumsfeld speech about ‘known unknowns’ and ‘unknown knowns’. Coming within a week of the shock general election result in the UK, the Institute’s latest summit certainly had an excitable buzz about it to go along with a world-class panel of speakers and a convivial collection of inspiring Northern Irish exporters.
The realities and changing landscape of Brexit
Among the speakers, T Glyndwr Powell, Head of Risk at Merchants Transaction Finance, was keen to discuss some of the realities of Brexit. He pointed out that the UK is second only to Germany in terms of GDP in the EU (making up 17%) and is the second largest net contributor (again after Germany). The cost and risk of Brexit is certainly a two-way affair and Glyn suggested that Northern Ireland alone pays more into the budget than France, which is certainly astonishing.
Yet despite all this, the way UK businesses trade will go through a period of uncertainty with Glyn warning exporters to ‘get ready for a rollercoaster’ due to twitchy markets and unclear political situations and timelines.
Bridges not borders
Brian Telford, Head of Markets at Danske Bank, pointed out that 55% of Northern Ireland’s total goods exports went to the EU in 2016, with another 31% going across the border to the Republic of Ireland.
The border to the Republic was a key issue in the presentations, especially in light of the increased influence of the DUP in Westminster. Glyn did point out that the Common Travel Area between the UK and Ireland predates the Treaty of Rome (which guarantees freedom of movement in the EU) though.
Certainly, the panel were keen to say that it’s vital for businesses on both sides to build bridges rather than borders between Northern Ireland and the Republic, and indeed the UK and the EU.
Preparing for financial volatility
Brian Telford also pointed out the importance for businesses to plan for instability in the financial and currency markets throughout the Brexit process. He pointed out, as many have, that a weaker pound will have pros and cons for UK exporters due to more competitive pricing but increased import and manufacture costs. He advised businesses that the market is too volatile to hedge risk, saying that you need to determine the net FX exposure and consider what the budget exchange is relative to the current spot or forward market.
There are, however, various sources of financial support available for UK exporters as we enter these uncertain times. Banks like Danske of course offer solutions for things like FX volatility, while Elizabeth McCrory, Export Finance Manager at UK Export Finance, pointed out that UKEF have supported 279 companies in entering new markets and given £1.8 billion in support for exports to 69 countries in 2015-16.
Manufacturing a key sector for Northern Ireland
Stephen Kelly, Chief Executive of Manufacturing NI, represented one of Northern Ireland’s most important and sustainable sectors. Manufacturing represents 6.7bn in export sales and he was keen to say that strong ties with Europe are key to growing this.
“Create the most competitive region in Europe in which to start, sustain and grow a manufacturing business, thus creating wealth and work,” he said.
“NI manufacturers cannot afford the cost of being outside of the Customs Union.”
Half of the countries manufacturing exports go to the EU, and ¾ of imports also come from the union. Mr Kelly advocated moving from words to ‘pragmatic solutions’.
Support on hand
Whatever happens, businesses in the UK and in Northern Ireland more specifically have plenty of support organisations ready to lend a hand. Sandra Scannell, Head of Business Services at NI Chamber, spoke of their ‘Learn Grow Excel’ scheme, launched in November 2016 and designed to:
- support growing companies at every stage of development
- encourage more export activity in Northern Ireland
The scheme focuses on inspiring and sharing learning, building capability and networks, providing one to one support, and promoting development and sales opportunities.
Glenn Dale from the Queen’s Awards Office was also on hand to present this year’s run of the awards for businesses in international trade, with the deadline for applications closing on September 1. Winners of the Queen’s Awards earn recognised royal endorsement and global recognition, as well as a grandiose reception at Buckingham Palace.
Companies flying the flag for Northern Ireland
Also on the panel were two exporting businesses flying the flag already for Northern Ireland. Alan Lowry, CEO at Environmental Street Furniture Ltd, a small family owned business in Newtonabbey, advised attendees that overseas customers want preparation, creativity, and flexibility.
Aaron Gooding, Marketing Manager at FG Wilson, spoke of the ‘importance of partners’ when adapting products for specific markets and marketing.
Aaron rather summed up the mood around Brexit with a saying:
“The pessimist complains about the wind.
The optimist expects it to change.
The realist adjusts the sails.”
This certainly sums up nicely the main message of the summit in Belfast – be prepared to change the way you do business as the trading climate begins to change around you.
It was certainly a fascinating day of talks and the feedback we’ve had from attendees has been extremely positive.
We are running further summits this summer in the South West and the Midlands, which you can sign up to now for the chance to hear for yourself from some of the leading thinkers and experts around exporting and Brexit.