Hadley Group bids to create Chilean joint venture
A SMETHWICK engineering business is targeting Latin America for growth. Hadley Group, which currently exports to 33 markets, is in talks to set up a joint venture in Chile.
Stewart Towe, chairman and group managing director of Hadley Group, said the firm’s success in other export markets had prompted it to look at opportunities in South America.
“We have experienced great success in exporting and a key reason for this is the research we undertake to get to grips with our target markets,” said Mr Towe, who is also chairman of the Black Country Local Enterprise Partnership.
“Although funding is a significant barrier for many businesses, I believe the majority of companies struggle to get their export business off the ground because of a lack of understanding. The opportunities are certainly out there, but what local firms would benefit from is a network of businesses, which are already successfully exporting to emerging markets, so they can tap in to their expert knowledge.”
His comments found support from Ashley Hollinshead, partner at Deloitte in Birmingham.
He said: “Entrepreneurial businesses are at the heart of the region’s economy and have the potential to move us away from the alternating periods of recession and slow growth that have marked the last five years.
“Increasing revenues from international markets will be a critical element in securing strong, sustainable growth but they will need support and encouragement from government to fulfil their potential. Measures including tangible support to aid international expansion and a national insurance break to encourage recruitment would provide a welcome boost.”
He said one of the biggest challenges facing Midlands entrepreneurs was finding the development capital required to take on new markets.
Deloitte said its own research had shown only 19% of firms in the region saw banks as the most likely source of finance to grow their business. Almost two-thirds (63%) of entrepreneurial businesses were relying on cash they generated themselves to fund expansion, he said – an increase from 54% last year.
“Whilst discussions on this subject have focussed on what can be done to get banks lending more freely, the evidence from our report (Entrepreneurship UK ) is that many entrepreneurs no longer trust banks enough to borrow from them, and that is concerning.
“This paralysis in entrepreneurial funding is devastating not only to the individual entrepreneurs and banks, but to the UK economy as a whole. The relationship of trust between entrepreneurs and banks must be rebuilt,” he said.
The survey of more than 400 entrepreneurs across the UK, including 78 from the Midlands, shows the challenge of building supply chain, finance, distribution and sales networks in new markets has been identified as one of the biggest obstacles for entrepreneurs embarking on an export strategy.
A lack of knowledge of overseas markets, the ability to accurately price products or services, and logistics are also cited as challenges.
“Midlands entrepreneurs are on the one hand uncertain of the future, but on the other, they are eager to export and are actively preparing for growth,” said Mr Hollinshead.
“In addition to requiring support from government, entrepreneurs can also help themselves by improving forecasting skills to make maximum use of what capital is available and re-engaging with banks, remembering that they are businesses too.”