Find a Distributor Service

1) The UK Construction Market Today
2) Opportunities In Housing Construction                                                          
3) Opportunities In Non-Housing Construction
4) How We Can Help

1)   The UK Construction Market Today

The construction industry in the UK is the second largest in the European Union, and current (2009) output is estimated to be worth in excess of £75 billion (source Experian) with the industry employing over 2.1 million people.  Over the last decade the industry has enjoyed a period of prolonged and strong growth, buoyed by a significant housing shortage and substantial public and private investment in infrastructure and the commercial construction sectors. However, in mid 2008 output from the industry began to fall as the effects of the slump in the world economy began to manifest themselves.

At the time of writing (spring 2009), the overall industry is suffering from significantly lower levels of demand than it has enjoyed in recent years due to the impact of the slowdown in the international credit markets, higher energy costs, and lower demand for new housing resulting from the reduced availability of mortgages. Housing construction is the worst-hit sector with output expected to be some 30% lower* than in 2008. By the same measure, industrial construction is expected to fall by some 16%.

2)   Opportunities in Housing Construction

Consequently, industry forecasts remain generally depressed for the short term, particularly for the housing sector. According to the Construction Products Association (CPA), the number of housing starts in 2009 will be just 70,000, whereas the latest forecast from the National House Building Council (NHBC) suggests that the figure will be 80,000.   Nevertheless, the underlying fundamentals for future growth in housing construction remain strong for the medium and longer term given the country’s continuing (and worsening) housing shortage and the aspiration of the overwhelming majority of adults to own their own home (88% according to the YouGov survey of March 2009). Therefore many commentators view the current depressed state of the UK housing market as short-term and now expect significant growth to return in the year 2011/2012.

Further evidence of the prospects for growth in this sector can be derived from the UK Government’s own research which, before the recent decrease in the number of housing starts, identified the need for the construction of 3 million new homes by 2020 (now thought to be underestimated by some commentators) to meet the expected increase in the number of households. If the Government’s projections are correct, the number of new homes constructed each year need to average some 240,000 (the research was published two and a half years ago). Clearly the most optimistic estimate of 80,000 starts for 2009 falls substancially short of this target, suggesting that, when the market does recover, there will be significant opportunities for those international companies ready in the UK market.

3)   Opportunities in Non-Housing Construction

The sectors where forecasts continue to predict growth in both the short term are social housing and other public sector funded projects as well as infrastructure construction where scheduled major projects include; the M25 motorway widening scheme (start late 2009), the construction of the ‘Crossrail’ railway line linking east and west London (start 2010) and the construction of new nuclear energy power stations – (11 potential sites announced April 2009) to name but a few.

There are many hundreds of thousands of planned construction works throughout the country which contribute to the sentiment of the forecasts for social housing and other public sector funded industrial projects. Key schemes in the planning pipeline include:

•    Regeneration of major cities – investment of approximately £4 billion a year in over 80 major projects towards the regeneration of UK cities, including Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham, and Sheffield.

•    Healthcare development and renewal, promising substantial capital investment each year on a rising scale and culminating in some £6.1 billion for the year 2010-11, to help deliver:

-    Over 20 new hospitals
-    150 new walk-in health centres
-    100 new doctor’s practices
-    Approximately £3.7 billion of repairs and restorations

•    Transport infrastructure construction and renewal, including:

-    Widening of the M25 railway
-    Crossrail, the £8 billion scheme to connect east and west London
-    Heathrow Airport Terminal East
-    Station expansions/re-development at London Victoria, Reading, Birmingham, and Nottingham
-    £3bn input for the ‘Transport Investment Programme’ in Scotland
-    The East London Line (railway) extension
-    Docklands Light Railway (DLR) extensions in London
-    Power station projects in Pembroke and Newport in Wales
-    Thameslink railway expansion
-    Major expansion of Belfast Harbour
-    Some £600m of motorway and trunk road construction and renewal, nationwide

•    Education construction via the Government’s ‘Building Schools for the Future’ programme promises capital investment of some £45 billion to build or renew around 3,500 state secondary schools in the years to 2015.   More immediate opportunities are provided through the ‘Academies Programme’ (already under way) which aims to have some 200 academies open by 2010, supported by £5billion worth of capital spending.

•    The 2014 Commonwealth Games in Glasgow promise approximately £3billion of expenditure on venues, hotels and transport infrastructure.

•    London 2012 Olympics– undoubtedly the most high profile construction project – is now estimated at some £9billion. Preparatory construction has already begun and the bulk of the work is expected to be carried out on venues, facility buildings and infrastructure between now (spring 2009) and the end of 2011. To help businesses take full advantage of the opportunities

4)   How We Can Help

As well as being publisher of ‘The Exporter’s Guide to the UK Construction Market’, Construct UK is a specialist research and information provider benefiting from over 20 years’ experience in the UK construction industry which includes the marketing and promotion of building products, materials and services from across the world.

Drawing on our extensive resources and unique network of industry contacts, our Distributor Finding Service is a cost effective solution designed to help you find the most suitable UK-based business partner with established links in the construction market. A typical programme would include the following activities and would incur an average cost of €1850:

  • Research into the relevant market sector and provision of a report on the number and range of companies already active and an assessment of the sector’s potential.

  • Research and identification of potential business partners based on suitability, e.g. existing client base and supply-chain links, resources, sector positioning and profile in marketplace.

  • Telephone campaign to obtain appropriate contact names, generally at Director level.

  • Promotional campaign to develop interest. Typically, direct mailing of literature and proposal details; however, campaigns can be extended to include other activities such as advertising and exhibition attendance when appropriate. Copy-writing, translation and proof-reading support for all marketing material.

  • Thorough telephone canvassing campaign to assess and then develop interest from prospects, with full step-by-step progress reporting to client, culminating in a short list of most suitable interested parties.

  • Exchange of contact details between all interested parties and arrangement of introductory meetings as necessary.

The most suitable programme of activities depends on the nature of the product(s) or service(s) and the relevant sector(s). If you would like us to provide a detailed, fixed price, proposal, free of charge and without obligation, please Contact Us and provide a brief outline of requirements.

Case Study: Mobirolo Spa.

Italian Staircase Manufacturer Seeking Distributors to the UK Construction Specification & Home Improvement Markets

Leading Italian staircase and loft ladder manufacturer Mobirolo S.p.a. commissioned Construct UK to find potential distributors to expand its existing UK-based network. The criteria included the requirement for potential partners to have strong and established supply links into both the home improvement/loft conversion market for the range of space-saving loft access staircases and also the specification sector of the UK’s construction market for the range of bespoke spiral staircases.

Construct UK recognised that, not only did the two sectors possess different characteristics in terms of sales channels but also, in both cases, the UK market was already very well served by a high number of manufacturers supplying similar products from the UK and overseas. It was clear therefore that, in a competitive, price-driven market, any promotion to possible distributors would require emphasis to be given to the enhanced level of potential sales to be derived from supplying high-quality products produced with unique finishes and a proven, long-established track record of sales and product reliability.

After first researching the sector, Construct UK created and pursued a detailed strategy designed to achieve maximum interest in the company’s products and which can be summarised as follows:

Stage One: Using its extensive in-house resources and a network of contacts in the UK construction industry, Construct UK identified 224 potential distributors with established supply chains into the relevant sectors of the markets, including:

  1. Specialist spiral staircase fabricators

  2. Specialist loft staircase and loft-ladder suppliers

  3. Timber & builders merchants


A telephone research programme was undertaken to obtain suitable contact names, and narrow down the target list by assessing initial interest levels. 48 companies were removed from the list at this stage.

Stage Two: Construct UK carried out a dedicated marketing campaign targeting the remaining potential distributors by direct mail. This included a promotional brochure, summarising each of the main products in the Mobirolo range and an introductory covering letter introducing the proposal. Construct UK’s service included help with copy writing and proof-reading of text supplied by Mobirolo.

Stage Three: Construct UK carried out a comprehensive telephone canvassing campaign, contacting all of the remaining potential distributors to assess interest in the opportunity and to provide further details to interested parties. A constant correspondence was maintained with Mobirolo’s export office to keep them fully informed of the progress and allow a fast reaction to any technical questions.

Results and conclusions
After concluding the second round of telephone canvassing to the remaining 176 potential distributors, the results of the project showed that 24 distributors expressed serious interest in supplying Mobirolo products, 6 expressed possible interest for the future and two were identified as already supplying the products. Concluding the project, Construct UK arranged for exchange of full details between parties and mediated subsequent dialogues/meetings as required. Throughout the project, which lasted two months, Construct UK provided regular scheduled updates to Mobirolo.

On completion of the project, Mobirolo’s Export Manager, Daniele Morandi, commented, “The excellent service provided by the Construct UK team has been thorough and accurate throughout and extremely helpful with our plans to develop the UK market. We would not hesitate to use them again in the future.

 

Case Study: Canaletas S.A.

Spanish Manufactured Plumbed-In Water Coolers Seeking Distributors to the UK Construction Specification Market

A leading Spanish water cooler manufacturer commissioned Construct UK to find a selection of potential business partners with strong and established supply links into the specification sector of the UK’s construction market.

With water coolers being on the margins of construction product specification, Construct UK recognised the potential opportunities for specification of the manufacturer’s plumbed-in range, the services for which need to be designed-in at the planning stage of both new-build and refurbishment projects in the commercial and industrial market sectors.

After first researching the sector, Construct UK created and pursued a detailed strategy designed to achieve maximum interest in the company’s products and which can be summarised as follows:

Stage One: Using extensive in-house resources and a network of contacts in the UK construction industry, Construct UK identified 75 potential distributors with established supply chains into the market, recognised profiles and links into the required sectors. A telephone research programme was undertaken to obtain suitable contact names and to assess initial interest levels.

Stage Two: Construct UK subsequently carried out a dedicated marketing campaign targeting the potential distributors by direct mail. This included the preparation of specially designed literature and an introductory covering letter introducing the proposal. Construct UK’s service included help with translation and proof-reading of text supplied by the Spanish manufacturer.

Stage Three: Construct UK carried out a comprehensive telephone canvassing campaign, contacting all of the identified potential distributors to asses interest in the opportunity. From the results of this exercise, a shortlist of the most suitable business partners was created based on the initial profile provided by the manufacturer, and Construct UK arranged an exchange of details and meeting options between relevant parties.

Results and conclusions
After the first round of telephoning, the initial list of 75 possible distributors was reduced to 50, with 25 companies expressing no interest or identifying a potential conflict. Of the 50 interested in the proposal, 27 supplied alternative water-coolers to the general UK market, 9 supplied water-coolers to the UK construction market and 14 supplied other related products to the UK construction market and were interested in expanding their range.

The second, more intensive round of telephoning allowed more detailed discussions to take place and a shortlist of the 11 most suitable prospective partners was produced which included very serious interest from a number of high profile and established product suppliers to the UK specification market. Concluding this stage of the project, Construct UK arranged for exchange of full details between parties and mediated subsequent dialogues/meetings as required. Throughout the project, which lasted two months, Construct UK provided regular scheduled updates via email and telephone.

 

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