If the economic climate of the last few years has taught us anything it is that UK manufacturers cannot rely on the domestic market alone, they must make every effort to maximise exports. Tony Ingham of Sensor Technology says manufacturers must export, but they have to hedge all bets to mitigate the risks.
In business it is all too easy to close your eyes to difficult truths and hope they will resolve themselves before they affect you. Many UK manufacturers fell into this trap last year over the Euro. Europe is a key export market for most British producers, which generates considerable overseas earnings for UK plc and helps stabilise the national economy. But last year its currency, the Euro, wobbled alarmingly.
As it turned out catastrophe was averted. We can speculate whether its recovery was luck or judgement - but that is not really relevant. What should be understood is that the Euro may have further troubles ahead and they may be worse the next time around.
In fact, this is the application of the simple prudent business principle of always at least considering the worst case scenario. However, there can be no manufacturer who is in a position to say, "we are going to pull out of Europe and concentrate on other markets'. It has probably taken years to establish some European customers and they probably want to continue the relationship - which is great if there is a viable currency.
The answer is, of course, that each company needs to export to a number of different regions, ideally in relatively even proportions so that they are not over exposed to any one currency. This is obviously expensive, difficult and time consuming to set up - it has taken Sensor Technology a couple of decades, and the company has always been export-oriented.
The salient points for each region can be summarised as follows:
The conclusion is that UK manufacturers must put every effort into export, and find as many support mechanisms as possible, including local distributors, export guarantees/insurance, exploration visits, help from trade associations, trade councils etc. Exporting is not easy and it won't make you rich, but it is quite simply a necessity. To learn more about Sensor Technology Ltd please go to www.sensors.co.uk/mbn.
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