Construction Exports: The Possibilities
99.1% of the world’s consumers live outside of the United Kingdom. Enough possibilities? The construction industry is a peculiar industry amongst other industries. The United Kingdom is a peculiar country amongst other countries. These two facts allow for enormous possibilities as well as a whole lot of other stuff going wrong when seeking sales abroad. My own introduction to the construction industry came from being recruited from a successful exporter of polythene to people who make nappies to running the nascent export operation of a leading materials manufacturer. It took at least six months for me to understand the complexities of specification selling, the exporting bit was a piece of cake. Every country has its own culture and practices and the British construction industry is unique, so offers unique products and services as well as incomprehensible (often to us as well as foreign clients who really don’t care) practices, Identify your strengths and exploit them, only now you potentially have a strength your competitors do not. As an example, I quickly discovered PU cements didn’t really exist in much of the world due to the original patent so selling against local competition was easy.
The obvious reason that UK companies fail to take advantage of the potential is fear. However, the vast majority of successful British exporters I have known have achieved this success through a mixture of good fortune and (to a lesser extent) our imperial past. The world has changed, British reputation does not count for so much and global trade is now the norm. If people have made money by being lucky (essentially getting specified by British architects), imagine what can be achieved by doing things proactively. I will attempt to describe some of the possibilities, bearing in mind that strategies differ depending on where in the supply chain you find yourself.
Demand: UK GDP is a small fraction of global GDP. The EU is the same country, economically speaking, with a population of 503 million. There are a lot of customers out there.
Profitability: On average, exporters create more jobs, grow sales faster and their employees earn more.
Risk mitigation: This is especially relevant to the construction industry. The ups and downs make Blackpool’s Big Dipper look like a kiddies’ slide. Of course, other countries suffer as well, but often at different times, so you can spread the risk and maintain sales in lean periods.
SMEs: Smaller businesses have greater potential. The Sunday Times' SME Export Track 100 shows what is possible as well as the notable absence of construction companies.
With a large export market researched and identified, you can then actually manage your profitability. It depends on the service or product, but an export order is usually larger, a project might be enormous and economies of scale can be achieved. Products or services which are common here may be scarce and demand a large premium elsewhere. Knowledge is crucial. With a larger potential customer base to call on, you can pick and choose business according to which is more profitable. I could name at least three companies who have built a worldwide reputation after feebly following up an enquiry which very fortuitously turned into a multi-million pound project. Be the first to look for opportunities and you have a better chance of seizing them.
This article is intended to highlight the possibilities of exporting, so, while I could write at length about how to achieve exporting success, here I just want to examine a few different approaches for different types of organisations:
Sub-contractor: Possibly even 2 men and a van. With specialist skill and knowledge and a good relationship with a materials manufacturer, you may be able to do specialised work abroad where no suitably skilled staff are available. Talk to them.
Main contractor: Endless possibilities. If not involved, speak to a specialist
QS: This area is a little more difficult but this link http://www.icoste.org/ may help.
Architect: Possibilities will depend entirely on the philosophy of the practice. If open to the new, get out there.
Materials manufacturer: If not the most possibilities, certainly by far the easiest to achieve. Find the same kinds of people in other countries whom you sell to here and sell to them. If you are not doing this already, speak to someone who knows how to do it.
Builders merchant: Huge possibilities where demand exists, research is crucial.
Equipment manufacturer: If your existing export sales are not already over 50% of the total, you maybe need a strategy rethink.
During the course of my work, I read a lot of literature about exporting. It is usually prefaced with, ooh, it’s scary, risky, people do things differently and speak funny languages. While it is true that, if you insist on British working practices and payments or insist on your own company’s way of doing things, you are unlikely to export anything, if you open your mind, the world is that oyster. Your most important strength will be your adaptability. Nevertheless, exporting offers up a whole new set of possibilities. Evolution comes from mixing, matching and finding the best. You will find certain British products or practices are very highly valued overseas but, at the same time, discover all those products and practices which are better than ours and bring them home. There is no doubt that exporting makes you stronger.
In my experience, one of the big weapons in the arsenal of the typical construction industry sales person is the treasured list of project references. If you really want to show off, you have to have some international ones. The transformation in a company’s reputation once they are successfully exporting is astounding. Any specifier is going to place a far higher value on your company if you are working internationally. Exporting boosts your domestic sales too - you cannot lose.
Aside from building your reputation by exporting, you will also make your company stronger. If you have ever coveted the reputation of German engineering or Japanese technology, get out there and compete with them, learn what they are doing and do it better.
Whatever you do as a company, you are in the business of getting things built. Getting something built in Barcelona is just the same as doing it in Barnsley. You may possibly have more fun in Barcelona, that is up to you. You want to make profit, there are a lot more projects out there than British ones. Why not find them?
Kevin McGowan was the South American Business Development Manager as well as the Country Manager for Spain and Portugal at Flowcrete. He was Mediterranean Area Manager for Thorn Lighting. He now works as an export consultant.