As Britain enters back into recession, this is a clear indication of just how important it is to economic recovery that UK companies look to overseas markets for growth. The proportion of UK firms doing business overseas has risen over the past two years and whilst there is an increased awareness and interest in High Growth Markets such as the BRIC countries and other developing markets; relative to our competitors, UK businesses don’t export enough particularly to these markets.
Furthermore the UK’s biggest export markets, Europe and US, have themselves become sluggish and thus UK companies will find themselves in a vicious circle of stagnancy if they don’t break free from this reliance and exploit the booming consumer wealth and appetite for western products and brands evident in these developing markets.
Throw into the mix that the UK’s share of global exports over the last decade has fallen (it now stands at around 4%) whilst Germany’s share has risen to nearly 9.5%, and it becomes clear that the UK needs to export more in order to boost the economy and for UK companies to accelerate growth.
Whilst the opportunities can be plentiful they can also be challenging.
In his interview with LondonlovesBusiness, Matt Jackson, High Growth Markets Practice, KPMG in the UK explains the benefits UK companies can enjoy by taking advantage of the export agenda as an avenue for growth in the current tough climate. Matt talks about the benefits for business, popular destinations to export and what businesses must consider when exporting overseas in particular some of the nuances that can be expected and how they can be mitigated.
Chairman, High Growth Markets
KPMG in the UK
Many companies are ready to embrace such opportunity but can fall short due to a lack of understanding of such markets and often due to a lack of export finance or credit insurance.
KPMG continues to support UK Export Finance (ECGD) push this agenda forward and help UK companies overcome some of the constraints they currently face when looking to grow their business in these developing markets.
UK Export Finance has already been pivotal in supporting the likes of Rolls Royce Plc, Atlas Risk Management and Creative Communication in driving their growth agendas in such markets. Whether stage of development you may be in with your export strategy, ask yourself the questions below and if you find you answer yes to any of these, access the information leaflet below to get the help you may need.
- Is there a developing market you want to expand in but you are worried about the political or credit risk?
- Do you need to give long credit terms for your export contracts, and would like to obtain payment protection?
- Do you have export customers where your credit insurer will not provide cover?
- Are you unable to obtain a financing package for the buyer from your bank to support your export offering? Or have working capital needs specific to an export contract that are not being met by your bank?
- Do you have to provide contract bonds to guarantee performance? If so, do you have access to all the bond capacity you need from your bank? Do you need to reduce the cash collateral that your bank requires?