Yorkshire Manufacturing: Firms need to step up overseas say experts

YORKSHIRE’S manufacturers may be benefiting from the improvement in the domestic economy but they still need to focus on growing their sales overseas.

Experts and those heading manufacturing companies who took part in TheBusinessDesk.com’s Yorkshire Manufacturing supplement believe that is where the region’s makers can achieve strong growth.

Read our 20 page Yorkshire Manufacturing supplement, sponsored by Deloitte and DLA Piper here.

Richard May, head of manufacturing at DLA Piper, said that a lot of recent positivity has centred on the domestic market which has driven demand.

He said: “Whilst output levels have grown overall, export levels are falling and it is crucial that we continue to address our attitudes towards foreign markets and explore the opportunities that a strong and efficient export strategy brings. It is increased growth in international markets and exports that will really drive the sector forward and this needs to be a focus if manufacturing is to play the part we need it to in rebalancing the economy.”

Simon Manning, partner and manufacturing expert at Deloitte, said many Yorkshire businesses in heavy industry are doing well because far from just being ‘traditional manufacturers’ they are investing in innovation to adapt their old plant to new applications and new manufacturing techniques.

“Many heavy industry companies in this region are a hybrid of the two – using longstanding knowledge of what works but changing through necessity.

“These companies have very experienced engineers, taking what works well in industry and applying new techniques to do it faster and more accurately.

“By successfully doing that, traditional manufacturers are finding new ways to enter new markets,” he said.

Sheffield-based Macalloy manufactures bar and cable systems for big infrastructure projects, airports, stadia and bridges. Around 85% of its £13.5m turnover is from exports – with Europe and the Middle East being major markets.

The company, which employs around 90 staff, is now targeting the US with six agents in different states. Managing director Peter Hoy says that although relatively mature, it is a market where the company does not have much direct competition.

“We have to educate the market about our product as they are using alternative products, whereas our system is already widely used in Europe,” he said.

Mr Hoy, who is also chairman of The Manufacturing Forum, said he is heartened by the Budget announcement that export lending will double to £3bn and interest rates on that lending will be cut by a third but added he would like to see more funding and support for companies to make the most of overseas embassies when looking to enter new export markets.

Engineering wire manufacturer Fox Wire is going for growth by targeting new sectors abroad as well.

The company, which employs more than 50 staff and has an annual turnover of £12m, is the UK’s largest manufacturer of engineering wires in stainless steel, nickel alloys, copper, brass and aluminium and exports into Europe from its UK base in Sheffield and through its German subsidiary, Fox Wire GmbH.

Oliver Baker, who bought the business in 2007, says 2014 has marked an upturn in fortunes and it has seen domestic and export orders bounce back and output continue to grow.

“Around 70% of our business is exporting and while we have seen only a modest recovery in Europe, it is not getting worse,” he said. “We have seen recovery in the UK, mainly in the construction sector.”

Founded in 1861, international conveyor belt and reinforced polymer manufacturer Fenner has its roots in servicing the UK coal industry but today sees only a fraction of turnover generated from within this country.

The £820m turnover group operates two divisions – Engineered Conveyor Solutions (ECS) and Advanced Engineered Products (AEP). In Yorkshire, the group has a factory in Marfleet, which employs around 140 people, while around 40 staff are employed at the group headquarters in Hessle.

Aidan Wallis, director of strategic planning at Fenner, said that over recent years the group has increasingly evolved from being a Yorkshire-centric company into a genuinely global enterprise.

“Globally the outlook for mining is reasonably positive. Demand for commodities is growing at the rate of GDP, so about 3% to 4% a year. But you do have to be prepared to go to far away parts of the world to secure growth,” he said.