North East leads the way on exports
- 17 August 2012
- From the section Business
One trillion pounds by 2020 - that is the chancellor's target for the value of the UK's exports. It is an ambitious project, because we are nowhere near that at the moment.
The latest figures for June this year show that in fact British exports have fallen, and our trade deficit - the gap between what we import and what we export - is at its worst level for 15 years.
So perhaps George Osborne should hop on a train to the North East. This is a region that is doing particularly well in exporting, so well in fact that it is the only part of the UK that is a net exporter - selling more overseas than it buys in.
Why? Ask locals and they will tell you the North East is a resilient part of the UK, with a history of adapting to the changes in industry over the years.
"The North East has an excellent work ethic," explains Kevin Cook, managing director of Aesica Pharmaceuticals, a business that ships 90% of the drugs they make overseas.
'Done our homework'
In their labs in Cramlington, a few miles north of Newcastle-upon-Tyne, they make anti-depressants, anti-inflammatories and medicines for diabetics. But their big seller is a high strength pain killer, Flurbiprofen, for which Aesica holds 90% of the global market share.
Last year turnover at the firm topped £155m and they expect to double that by 2015 and take on 100 new staff.
Mr Cook maintains this is because they have worked very hard on their exporting strategy.
"We've built up a lot of export expertise internally - we've done our homework," he says. "Our biggest markets are Japan and the US but our big competitors are in India and China."
Pharmaceuticals are made to the same formulas and standards across the industry, so Mr Cook and his team at Aesica might struggle to compete with countries where labour is cheap.
Instead they are focusing on offering something India and China cannot - a streamlined, efficient operation, using a lot of automation rather than hand processing, meaning that with one member of staff they can produce the same amount of product as five or 10 people overseas.
Down the road in Seaham, County Durham, is a completely different exporting success story.
Prima Cheese processes, slices and grates 200 tonnes of cheese every single week. The operation has really stepped up since the family firm started exporting in the last year.
When Nagma Ebanks-Beni took over the reins from her parents, she wanted to take advantage of the Middle East's growing taste for fast food, particularly pizza, by selling their product to new markets.
"We decided to specialise into what we do best - grating and processing," she says. "Now we sell mozzarella and processed cheese to Dubai, Jordan, Lebanon and even Peru."
Exporting has helped Prima Cheese grow, taking on new staff and offering locals a secure future. As the North East has higher unemployment than the rest of the UK, this is a big bonus.
The mutual benefits stretch much further than the cheese factory floor. On the outskirts of Newcastle-upon-Tyne, the international airport has seen its export values grow to more than £170m every year, driven largely by an Emirates flight service between the North East and the Middle East.
Exporting, after all, is all about relationships. Lesley Batchelor works for the organisation that helps develop these relationships, the Institute of Export.
She has little sympathy for businesses who complain that they don't know how to export.
"If you can't find help in this area you're really not trying very hard," she says. "Even in the highest of the Scottish Highlands there are business advisers building relationships for businesses overseas."
The real sticking point, she says, is expertise: "We wouldn't give our accounts to someone without an accountancy qualification, you wouldn't go to court without someone who knows the law, but for exports we hand multi-million pound contracts to people with no qualifications."
Ms Batchelor cannot say if George Osborne's £1tn target is achievable, but she does say that austerity certainly limits any country's ability to import, and therefore any others' ability to export.
But she is confident that across the UK, not just the North East, there is plenty of business potential that could go global.
"Exporting is not easy," she says. "But it can be really fun."