http://www.nwda.co.uk/pdf/wiNWin%206%20final

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Autumn 2007

INTERNATIONAL BUSINESS MAGAZINE FOR THE NORTH WEST

Aerospace High Flyers • North West aerospace industry at the Paris air show • Liverpool firm launches successful JV in India

Heating Up! Environmental Industries

Strategic Alliance Service

Fast Track To The World

Global market forecast to grow to $700 billion by 2010

North West companies to benefit from recent expansion

With help from the experts

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Nasty financial blockage The upheaval in the financial markets which began in July is still continuing into late September. While equity, bond and foreign exchange markets are experiencing sharp daily movements, it is the staid and little-noticed markets for short-term money and commercial paper which have been making the news. As financial commentators are straining to explain the ins and outs of structured investment vehicles, conduits, and collateralised debt obligations, all that really needs to be understood is that the world’s financial system has developed a very nasty blockage, which is only slowly shifting.

The cause of this logjam is not in doubt: it is the meltdown in the sub-prime mortgage lending market in the US. The problem stems from the boom in US mortgage lending to low-income buyers with poor credit ratings that took place when US interest rates were low. Since June 2004, US interest rates have risen steadily from 1% to the current level of 5.25%. Faced with much higher mortgage repayments, there has been a sharp rise in the number of borrowers unable to service their mortgages and then defaulting.

The reason why this has spilled over from a purely US problem into an international financial crisis is that US mortgage lenders packaged up these sub-prime loans and sold them on as tradable securities to other international investors. In this way, the contagion has spread well beyond American shores. It is a vivid demonstration of the global nature of financial markets that the apocryphal Billy Bob, from a trailer park in Baton Rouge, Louisiana, can cause havoc in Newcastle upon Tyne.

For some time, regulators and analysts have been concerned that in this new opaque world nobody knows for certain who is exposed to what risks and who is sitting on large unreported losses.

A loss of trust The consequence is that the usual trust and confidence which exists among banks and other financial institutions has been temporarily undermined. Banks who would normally lend money to each other in the money markets are now hoarding their liquidity and not lending.

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Generally, the larger UK Clearing Banks are in a position to finance commercial lending from the money that they receive from the deposits of their retail and commercial customers, some others, including specialist mortgage lending banks, are heavily dependent on the short term money markets to raise finance. Some banks which have no direct exposure to the US sub prime market, have nevertheless found it almost impossible to borrow money at any price and this has put them under intense pressure and has severely damaged customer confidence in the banking system. Indeed, the UK has witnessed its first run on a high street bank since 1860.

In the UK, the benchmark interest rate in these markets is 3-month LIBOR (which stands for London Inter-Bank Offer Rate). In the past year or so this has typically been about 0.2 percentage points above the Bank of England’s Bank Rate. But in recent weeks the gap has widened markedly, amounting to almost 1.2 percentage points on 10th September simply because the supply of available funds has almost totally dried up.

With mounting pressure from Government and media to relieve the situation, it is no surprise that the attention of policymakers has suddenly switched to maintaining financial stability rather than fighting inflation. In the US, interest rates were cut by 50 basis points to 4.75% while the Bank of England voted unanimously to leave Base Rate on hold at 5.75%. Until the present dislocation in the money markets is resolved and its economic consequences become apparent, further UK rate rises seem unlikely. Similarly, it is now expected that the European Central Bank will forego the two

further hikes that had been pencilled-in for the autumn.

In addition, having only added liquidity to the money markets sparingly in the extreme short end, finally on September 19th the Bank of England announced plans to inject up to ÂŁ10 billion in the 3 month money market to ease the liquidity crisis.

It is hoped that the worst of the banking crisis is now behind us but confidence remains fragile in the face of a severe shock to the system. There are concerns that banks are now likely to adopt a more conservative approach to their lending and to re-price risk making it more expensive to borrow money.

Whether this will cause a slowdown in the real economy remains to be seen.

In the meantime, the markets will remain very sensitive to forthcoming data releases so the current volatility on the foreign exchange and money markets is likely to be a feature for some time to come yet.

For advice on how HSBC can help your business develop an effective interest rate and FX risk management strategy please call Richard Baigent on 08457 125450 or Janice Russell on 07778 933556 or E-Mail: richard.baigent@hsbcib.com E-Mail: janicerussell@hsbc.com

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R&D and innovation initiatives in the North West

By David Booth, International Trade Adviser for UKTI North West UK Trade & Investment (UKTI) in the North West is taking a pioneering approach to help R&D and innovation companies improve their international trade potential, in keeping with the new 5 year strategy ‘Prosperity in a changing world’.

Companies need to develop new products and services to stay at the forefront of modern technology and ensure they remain competitive in a global economy – but they also need additional assistance to maximise the benefits of getting these new technologies to market.

Taking the initiative, UKTI commissioned Manchester Business School (MBS) to deliver an independent report on existing R&D activity in the region. The report highlighted factors constraining small R&D companies’ abilities to effectively export new products, and a pilot project was developed with Daresbury Science & Innovation Campus to help R&D / Innovation companies maximise their overseas potential.

The six month project was launched on 28th March 2007, and aimed to identify companies already actively involved in R&D who would benefit from an intensive programme to help them internationalise their businesses.

Fourteen companies were selected to participate, and two specially appointed International Trade Advisers (ITAs) worked with and mentored them throughout. The companies were able to research and develop new products and services with full support from ITAs with related sector and market experience, who helped them develop overseas action plans and access UKTI assistance.

or partner is most often via the company web site, and UKTI is committed to ensuring that UK firms get the best advice on how to present and market via the internet.

Technology and Media Park in Berlin, which is Europe’s largest Science Park and offers excellent opportunities for UK companies to gain knowledge on leading technologies.

During the programme, the project team identified common areas of interest relating to the participating companies and organised specific focused events and programmes to maximise the time and effectiveness of this project.

The North West R&D Pilot Project has proved such a success that other regions are now looking to replicate it. UKTI North West is carefully monitoring the effectiveness of the investment into this project, which is already proving beneficial for participating companies and has attracted great interest from the Universities, Science Parks and Incubator Facilities as well as other businesses looking to access similar projects.

These included an Asia Pacific awareness seminar in conjunction with the China Britain Business Council (CBBC) to introduce specific routes to market, best business practice and cultural issues. Other companies from Daresbury and across the region were invited to the seminar, which proved to be extremely popular with a total of 33 companies attending.

Another successful full day clinic was ‘Doing Business in the USA’, which attracted 34 companies and was supported by the British American Business Council (BABC) and the Greater Richmond Partnership in Virginia.

Two more overseas market visits – to the USA and Germany - are currently being arranged to help companies develop a greater understanding of opportunities in these markets and to give them direct access to overseas centres of excellence in their own fields.

The USA visit will include a trip to the Massachusetts Institute of Technology in Boston and introduce companies to relevant sector cluster groups in Richmond, Virginia.

Companies participating in the market visit to Germany will visit Adlershof Science,

UKTI are now looking to secure additional funding for future initiatives based on the effectiveness of the Pilot Project. UKTI hope to work in partnership with organisations such as Knowledge Transfer Networks, Science Parks, Incubators and Universities to deliver a comprehensive programme of assistance and advice to companies involved in R&D and Innovation. This will not just be in ‘High-Tech’ enterprises, but encompass sectors such as food and drink, construction and creative media where companies are continually developing new ideas and products and could benefit from these initiatives.

For further information on the R&D pilot project, forthcoming visits to the USA and Germany or other services available to help companies with R&D projects, contact the North West International Trade Team Tel: 0845 603 7053 E-mail: info@uktinorthwest.co.uk

A UKTI ‘drop in’ centre was also set up at Daresbury, where companies could discuss any issues related to their individual programmes of development - from international marketing and legal advice to licensing and agent / distributor agreements and intellectual property rights.

Each company also received a funding package specifically aimed at the three core activities identified in the MBS report. These are: Professional Consultancy - encompassing activities such as patent reviews, legal agreements and specific research papers Market Validation which includes market research and visits to investigate competition, opportunities and possible partnerships – and Web Site Development. It is recognised that today the first contact with any potential buyer

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Fast track to the world With help from the experts No serious business would consider trying to break into a new market without first establishing the opportunities for their products or services there. However, such research can be a costly and timeconsuming task – unless you enlist the help of the experts.

UK Trade & Investment’s staff in the British Embassies, Consulates and High Commissions from Mumbai to Moscow and Chicago to Chongqing can offer comprehensive support to help stop you making expensive mistakes.

A key service is UKTI’s Overseas Market Introduction Service (OMIS) – which can put you on the fast track to overseas success, providing research, introductions and practical help from the people who really understand the market.

The Introduction Service gives accurate and up to date information on trading

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opportunities, and an honest assessment of your company’s potential in a chosen country.

Once prospects are established, OMIS can be used to advise on market-entry strategies, identify and assess potential business partners and distributors and make introductions. Companies also benefit from the kudos of being associated with the British Embassies, High Commissions or Consulates.

When a company has decided they want to trade in a country a market visit will be in order and here the service can offer a great deal of practical help, from one-to-one previsit briefings to appointments with selected business contacts.

Overseas staff can accompany customers to meetings to help with translation and advise on business etiquette and culture, and will even organise launches, receptions and seminars at the embassies for businesses to present their products and services to a specially invited audience.

Lynn Shaw, Head of International Trade Services in UKTI’s North West International Trade Team says, “The Overseas Market Introduction Service is far more than just a paper-based market report service. The success of the scheme lies in the unique value of having staff in Embassies, High Commissions and Consulates all over the world, who have the local language skills, market knowledge and political and commercial contacts to really help North West businesses find a foothold overseas.

“There is a vast range of services available which can be tailored to suit a company’s individual needs. They include everything from market analysis and local introductions to arranging entire receptions and business events, and the service has opened many doors for UK companies, saving countless hours and significantly reducing costs for businesses intent on exploring new markets.”

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through the introduction service to make the most of their visit. Robert Dabrowski and Iwona Bogacz from the commercial team in the British Embassy in Warsaw also arranged appointments for them with senior people within the airports and aviation industry, with very positive results.

Chris Taylor of FS Walker Hughes says, “Without UKTI’s help we would have found it difficult to meet the right contacts at the event, but the staff at the embassy put us straight in touch with the key airport decision makers. Thanks to the introduction service, we are now in the process of organising a return trip to Poland to formally present our products and services, and we have been very impressed with the work of the Warsaw commercial team, and UKTI in general.”

Following the initial visit, FS Walker Hughes used the service again to arrange further meetings with airports that wanted a formal presentation. This enabled them to focus on the preparation for the meetings and the commercial team helped to ensure that the visit went smoothly.

Case studies FS Walker Hughes FS Walker Hughes are definitely on their way to becoming high-flyers in the European aviation industry, thanks to some help from the Introduction Service.

A Cheshire based company delivering high quality software and solutions to the Airport and Aviation Market, FS Walker Hughes were already successful in the UK but were keen to increase their international sales… especially in Eastern European markets, and Poland in particular.

Polish airports are currently experiencing rapid growth as a result of the fastest increase in air traffic anywhere in the world.

The sector is also expecting investments worth an estimated €1.2bn between 2007 and 2013, with plans to establish several new civil airports there.

With the help of their International Trade Adviser (ITA), Hannah Sinclair, the company were able to use the service to take advantage of some of these opportunities.

They attended the Kielce Airports Trade Fair in May this year, and used contacts identified

Chris Taylor adds, “We have now visited Poland three times including the exhibition, and are currently arranging a fourth visit there. We have had interest from six major airports and are producing detailed proposals and costs. In addition to this we are also in the process of negotiating a contract with a Polish technology partner who are coming to visit our offices in September. All of the contacts were identified through the Overseas Market Introduction Service, which saved us countless hours and reduced our costs considerably, as well as opening up exciting new opportunities for us.”

The Jem Associates An off-the-cuff remark at a Passport to Export course committed Eilidh Millnes of The JEM Associates to holding a business reception at the British Embassy in Dubai … but fortunately UKTI staff were on hand to help her keep her promise…

Eilidh, founder and director of a motivational speaking and personal development coaching company, first experienced UKTI’s services when she signed up for the Passport to Export scheme, UKTI’s flagship programme for new and inexperienced exporters.

As a total novice to the world of overseas trade, Eilidh found the course invaluable, and especially benefited from the strategic planning guidance given as part of the course.

Having decided to focus on the Middle East as a market for The JEM Associates, Eilidh delivered a presentation to her fellow course graduates at the Passport to Export event,

and found herself saying, “and of course, you are all invited to a reception I will be holding in Dubai in June.”

Eilidh says, “I was caught up in the enthusiasm of the moment, but having announced it I was determined to see if organising a reception in Dubai would be possible and - with the help of the UKTI advisers - it was.”

The next step for Eilidh was to commission a joint Overseas Market Introduction Service report on two specific areas in Dubai – Education and IT – with colleague Chris Davidson of Active Presence, who has worked on joint ventures with The JEM Associates.

She planned to attend the International Gathering event in Dubai in June 2007 to meet key players from her chosen fields, and found the service invaluable.

She explains, “Our International Trade Adviser, Claire Burgess, was a great help – we organised a work plan and she helped identify cultural and language differences so we could avoid misunderstandings.

“Claire then put Chris and I in touch with Sunita from the British Embassy in Dubai.

Sunita and Namita helped to organise the luncheon we had planned, inviting guests from our targeted sectors, organising the food and the venue and generally helping everything to go smoothly.

“The event was a huge success. I had originally been told that it would take a long time to begin doing business in Dubai after initial contact, but I have already begun coaching clients there, and am going back out there this month (October 2007) with a UKTI Trade Mission to further develop business relationships.

“Although it is still early stages, I have great hopes of expanding The JEM Associates in the Middle East, and having a reputation as an international speaker is also enhancing business here in the UK. “I would recommend UKTI’s services to any business thinking of breaking into a new overseas market. The prestige of being associated with the British Embassy meant that people took us seriously from the outset, and helped to take me to the heart of the industries I was targeting. I would not hesitate to use the Introduction Service again in the future.”

For further information about the Overseas Market Introduction Service (OMIS) and other UKTI services, contact the North West International Trade Team Tel: 0845 603 7053 E-mail: info@uktinorthwest.co.uk

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North West event - India focus Many businesses are aware of the massive market in India but few know of the exact opportunities for their business, or how to capitalise on these opportunities.

Why trade in India?

India has one of the fastest growing economies in the world. It is the second most populous country with over 1 billion inhabitants of whom 350 million fall into the prosperous middle class bracket. India is currently the world’s 10th largest economy but many analysts predict that, if current trends continue, it will be third in the ranking sometime in the 2020s. With such untapped potential, it is the ideal place to look for future business.

India is one of the priority high growth markets where long-term growth potential is enormous.

It is emerging as a global manufacturing centre with rapidly improving quality and productivity leading to increased exports of both vehicles and components, and has a rapidly expanding consumer class. The UK has strong ties with India, and with liberalisation of the economy and reduction of trade barriers progressing swiftly, UK companies are well positioned to take advantage of this growing export and investment market. UKTI have identified opportunities in a range of sectors from advanced engineering, through energy, ICT and biotechnology / pharmaceuticals to creative and media.

Learn more about India Doing business in India 29th November 2007 UK Trade & Investment North West is organising a major event for companies who are interested in opportunities in India. The event is being held in Preston. It will include case studies and discussions on how to approach the market, key presentations and informal networking with like-minded North West businesses.

To reserve your free place, contact Sue Ainscough on 01925 715202 or email sue.ainscough@wbv.org.uk

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Opportunities to visit the India market Autoexpo, India January 2008

North West market visit to India February 2008

AUTOEXPO, a high profile bi-annual exhibition, is the premier marketing event in the Indian Automotive industry with over 800 exhibitors representing both vehicle and component manufacturers. It is the largest auto show in Asia with over one million visitors expected.

It will provide UK companies with a platform from which they can maximise the potential for gaining business and forming new partnerships. In addition it will seek to raise awareness in India of the capability and scope of UK advanced engineering expertise in the auto sector and help to overcome the commonly held view in India that the UK is no longer an important player in the global automotive market.

Over 30 British companies from the North West, East Midlands and London – travelled to Mumbai in February this year on a market visit supported by UK Trade & Investment and organised by UKTI North West. Following on from the success of this large UK delegation, a further visit is scheduled for 16th – 23rd February 2008.

Indian companies traditionally seek collaboration with the UK - but UK companies have been slow to recognise the opportunities - this important flagship event will maximise the potential for collaboration on R & D, Technology Transfer and Joint Ventures in India. It is important to participate now – this event only takes place every two years and there is a limited window of opportunity as other countries are active in this market. The visit is scheduled 10th – 17th January 2008.

For further information contact Barbara Singleton on 0845 603 7053 or email Barbara.Singleton@uktinorthwest.co.uk

The visit will help new exporters and companies new to the Indian market explore the economic opportunities of this vast emerging market beginning in Mumbai and then travelling to 2nd & 3rd locations.

Participating companies will be able to access the best Indian business opportunities thanks to expert advice and tailored introductions, briefings from local British High Commission sector specialists, assistance with market research and the support of an experienced Market Visit Manager. A subsidy is available for SME’s who are new to this market.

For further information contact Julia Powell on 0161 237 4464 or email info@uktinorthwest.co.uk

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High flyers NWAA champion North West aerospace industry at Paris air show The North West aerospace sector is one of Europe’s leading industrial clusters, employing more skilled people and generating more overseas income than anywhere else in the UK - and for the past 13 years the North West Aerospace Alliance (NWAA) has played a pro-active role in maintaining our prime position in the industry.

Formed in 1994 (when it began life as The Consortium of Lancashire Aerospace), the NWAA is also the longest running regional aerospace alliance. NWAA has over 300 members and continues to grow, with membership increasing by almost 20% in the last year alone.

The organisation works hard to provide tangible benefits for its members, and provides vital links between the prime contractors, all supply chain levels, academia, local government and other stakeholders.

As well as a range of support including skills improvement, supply chain growth, supporting R&D and technology development and providing a forum for an industry voice, the NWAA has for many years helped members promote their products and services in key markets worldwide at major international airshows such as Paris and Farnborough.

Attracting thousands of visitors, these prestigious events have the potential to create millions of pounds worth of new business for exhibitors, and NWAA provide members with an affordable platform to place their company in the spotlight by exhibiting on the NWAA stand – benefiting from subsidised costs, administrative and marketing assistance and professional support.

The 47th Paris International Air Show at Le Bourget in June this year set a new record with more than 153,920 trade visitors, and the North West aerospace industry played a full part in the proceedings, with several major new orders being announced at the show.

Supported by the Northwest Development Agency, NWAA took 22 companies to Paris, where they had a stand that occupied 200 square metres, and amongst the announcements were orders worth billions of pounds for aero engine manufacturer Rolls-Royce plc, which has a major facility in Barnoldswick, Lancs, and Airbus, which builds aircraft wings at its plant at Broughton, near Chester.

Martin Wright, Executive Director of the North West Aerospace Alliance predicted that these successes would filter down the supply chain to help secure the thousands of jobs in the sector. He said, “...The North West has a well-developed aerospace industry and these orders will significantly secure both workloads and employment within the region.”

It is estimated that there are almost 1,000 companies associated with aerospace in the North West, employing over 50,000 people, approximately 4.5% of the region’s employment figures.

Worldwide, the UK aerospace industry is second only to the USA, and the North West accounts for almost £7 billion per annum – or a third of the country’s £18.6 billion annual turnover in this sector.

As well as the major North West based players such as Airbus Industries, BAE Systems and Rolls-Royce plc, there are also a number of smaller specialist companies that play vital roles in both equipping the armed forces and generating high quality technology jobs.

In addition to major orders for the prime manufacturers, other North West manufacturers and suppliers also reported key orders during the Paris Air Show, including a £40 million boost for MB Aerospace, which has facilities in Burnley, Lancs.

Adds Martin Wright: “Companies exhibiting with the NWAA are doing extremely well in attracting new business. This demonstrates that the region is successfully developing a very robust supply chain within the North West.”

He also welcomed additional orders for the double-deck A380 Airbus, which continues to attract more orders despite delays in its entry into service.

The next Paris International Air Show takes place in 2009.

Book now to secure your place at Farnborough 2008!

The NWAA will have a major presence at next year’s Farnborough International Airshow, to be held from 14 to 20 July 2008.

Specially tailored packages ranging from literature display and exhibition ‘pods’ within the NWAA stand enable companies of all sizes to gain a foothold at this major international event – which generated over $42.5 billion worth of business at their last event in 2006.

Companies interested in attending the show should contact Lorna CampbellCassidy, NWAA Marketing Executive Tel: 01282 604444 or email lorna.Campbell-cassidy@aerospace.co.uk NWAA has its own International Trade Manager, on secondment from UKTI. Sue Dale works on behalf of NWAA’s member companies, assisting them with a range of opportunities including: • Inward and outward market visits to meet potential customers and partners in key markets including France, Germany, Italy, Spain, North America, China and India • Seminars and workshops on specific markets or overseas issues such as Offset • Development of links with overseas aerospace networks worldwide • Access to business-to-business events organised both in the UK and overseas • Access to International Support Activity of partner organizations such as the Society of British Aerospace Companies (SBAC) and Defence Manufacturers Association • Access to UKTI support including market research, Passport to Export scheme, intelligence, sales leads, publicity and financial assistance For further information on NWAA’s International Trade Services contact: Sue Dale: (01282) 607146 Email: sue.dale@aerospace.co.uk

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North West Strategic Alliance Service Until recently UKTI has largely focused on helping exporters develop the core skills to trade internationally. With the launch of UKTI’s 5-year strategy – Prosperity in a Changing World, there is now greater emphasis on also working with R&D intensive companies and broadening the scope of assistance to include support for overseas strategic alliances, which are increasingly fundamental to the competitiveness and survival of UK companies and can lead to major gains in profitability.

During late 2005 ChamberLink piloted the Strategic Alliance Service (SAS) to help companies in the Greater Manchester area.

The service has recently been expanded to cover the whole of the North West of England, and provides practical assistance to help both manufacturing and service sector companies with complex procedures such as Manufacture under Licence (MUL), Overseas Joint Venture (JV) and Foreign Direct Investment (FDI).

Three companies in the North West who have benefited significantly from the assistance provided by the Strategic Alliance Service are Comid Engineering, Aerogistics and ATG Willland – and whether it resulted in a 5 year odyssey in the Middle East or a big splash in the American water purification market, all three companies found the help and advice offered

by UKTI expert Julian Birchett invaluable.

Oldham valve firm opens up in Saudi Arabia Comid Engineering is a small company with big ambitions. The Oldham-based business, which has just 15 employees, specialises in repairing and reconditioning valves used for handling fluids in a variety of industries, and has finally completed a successful joint venture in Saudi Arabia after 5 years of negotiations.

The company first looked to set up a Joint Venture (JV) in 2001, after market research established Saudi Arabia as a potentially lucrative market, thanks to its relative stability, escalating oil revenues, increasing investment by the major oil companies and very little competition in the valve repair sector.

Initial negotiations with a potential partner fizzled out, but Comid were not easily

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Julian Birchett, UKTI’s Strategic Alliance Service (SAS) Adviser

discouraged, and in November 2003 the company began talks with a new partner, Saudi Pan Gulf who already had existing contracts with Saudi Aramco.

Julian Birchett, UKTI’s Strategic Alliance Service (SAS) Adviser, provided assistance to help with the commercial and legal procedures involved in setting up the new company, as well as preparation and mentoring for key business meetings and negotiations, and by August 2005 a Memorandum of Understanding (MoU) and draft JV Agreement and Articles of Association had been established and local planning permissions were at an advanced stage.

In December 2005, a Spanish valve company asked to participate in the JV. The deal was restructured with further assistance from the Strategic Alliance Service and major commitments were made to move the project forward including updating of market research, company registration, licence applications and compilation of a detailed business plan.

However, in June 2006 Comid and Saudi Pan Gulf decided to acquire instead an existing company, Saudi Valve Manufacturing

Establishment, that had recently come up for sale and the deal was finally completed in October 2006. The JV had taken 5 years to set up from start to finish, but the odyssey has been worthwhile, with Comid enjoying many new opportunities including export into other Gulf states as a result of the Saudi alliance.

Paul Rowbotham, Managing Director of Comid, says, “Taking time to identify the correct partner is a key element, but there are also cultural factors that need to be understood when dealing with Saudi companies, including the fact that our working weeks only meet for 3 days per week, so there needs to be dedication from both parties to see the deal through.

“We have leant many lessons from our experiences setting up the JV – not least that you need to have a long term commitment to make it actually happen! It has been an arduous journey, and at times it seemed that we would never reach our goal, but with perseverance and determination we finally made it.”

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Tom Dawes, Managing Director of Liverpool company Aerogistics with Alan Bold and new partners Arunakar Mishra and Sumant Mitra of new joint venture King & Fowler India

High flying Liverpool firm launch successful JV in India Aerogistics Holdings Ltd are flying high with the launch of a new joint venture in Bangalore – King and Fowler India.

The Liverpool company are successful supply chain integrators to the aerospace industry – buying a range of components from multiple manufacturers to provide a convenient one-stop shop and manage risk for large aerospace companies such as Airbus, BAE Systems and Rolls Royce.

Aerogistics is also parent company to surface treatment facility King & Fowler, soon to move into a purpose built £2.4 million facility in Merseyside. This enables them to provide components which have been fully treated and finished in line with aerospace regulations.

Established in 2003, Aerogistics represent a global cluster of multi-commodity manufacturers, and also own King & Fowler Polska, who provide their world-class metal

finishing services to Western and Eastern Europe from a base in Central Poland.

But it was a tip off from their existing customers that inspired Managing Director Tom Dawes to look into setting up a JV in Bangalore, after being told that India would be a great opportunity, having no surface treatment capacity of their own.

Sue Dale at North West Aerospace Alliance (NWAA) (see page 6) introduced Aerogistics MD Tom Dawes to Julian Birchett who briefed the company on negotiating and successfully concluding a JV, explaining funding and legal issues, commercial due diligence and pointing out potential cultural pitfalls.

UKTI supported Aerogistics throughout the process, even giving them pointers on how to behave in India so that when they were approached by Bangalore-based company Genser they were able to negotiate with confidence.

a valued mentor to us. He helped us to work out what was right for King & Fowler and it was a valuable learning process. We were also very fortunate to meet another UKTI adviser, Jaimie Rogers, who was working on secondment at Airbus in Bangalore, and who helped us forge links with Genser.

“Genser were willing to invest in King & Fowler and also to roll in their current business as they already had a relationship with the supply base in India, and we finally negotiated the JV agreement in June, with Aerogistics holding a majority stake in the business.

“We are due to start trading early in 2008, and are hoping eventually to set up more JVs in Mexico and China. We would definitely recommend the Strategic Alliance Service to other companies as it helped us negotiate what can be an extremely complex and long drawn out process quickly and efficiently, avoiding many of the pitfalls that can happen to inexperienced partners.”

Tom says, “Although we conducted the business of setting up the JV, Julian shaped the process all the way through, and acted as

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Wigan water purifying company make a splash in America A Wigan based company specialising in environmentally friendly water purifying systems is currently making a worldwide splash. In the last year the company have doubled overall turnover, increasing from £1.5 million to £3 million, thanks to their burgeoning international business.

The company’s ultra violet water disinfection systems are used for a range of applications including municipal water, food, pharmaceutical and industrial projects – but their biggest success is in the leisure sector, where UV treatment is more effective and less environmentally harmful in swimming pools than traditional methods such as chlorination.

Market research confirmed major potential in the USA, where the relative affluence of the country enables the hotel and water park trade to invest in ATG’s sophisticated systems.

However, US business quickly began to dominate the company’s exports to the extent that they were no longer comfortable just supplying a distributor, and high shipping costs meant that it would make sense to manufacture goods in the US. It was at this point that International Trade Adviser Charles Jacobson suggested consulting the Strategic Alliance Service to help Sales Director Tony Leigh and Managing Director Chris Purslow approach appropriate partners in the USA, and to brief them on the major processes involved in successfully concluding a JV. UKTI also helped ATG Willand with negotiations with their prospective US partners and referred them to another adviser Fred Willan to resolve IP, tax efficiency and legal issues.

By January this year, ATG had successfully concluded a JV agreement with existing distributor, Engineered Treatment Systems and a commonly owned company ATG USA was formed, with all parties contributing a financial investment, ATG offering continuous access to IP and the US shareholders bringing their market knowledge to the table.

The company now have 22 American distributors, and US turnover is expected to be $3 million this year. ATG USA already have more than 50% of the American market in their sector, and are planning to expand into Canada next year with the recent appointment of 2 Canadian distributors.

The US business is currently supplied from the UK or subcontractors in the US, but plans are underway to begin manufacturing operations in America next year.

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Managing Director Chris Purslow adds, “The preparation, discipline and structure provided by the Strategic Alliance Service was invaluable. I thought that I already knew a great deal about international trade, but the twists and turns involved in the process of setting up a joint venture has been a whole new learning experience and it was immensely helpful to have a team of people to turn to for advice along the way.”

For further information on help available from the Strategic Alliance Service contact: Julian Birchett Strategic Alliance Service Adviser North West Tel: +44 (0)845 603 7053 Mob: +44 (0)7764 836915 Email: julian.birchett@chamber-link.co.uk

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An environment for matchmaking With the recent G8 Summit and all the evidence of the impact of our use of energy, resources and materials on climate change – the Energy and Environmental Technologies sector is a key growth area.

The global market is forecast to grow to $700 billion by 2010, mainly in the EU, US and Japan and by 2015 the sector will be worth $800 billion - larger than chemicals or aerospace. The primary technology areas are clean air, waste reduction, clean water and dealing with contaminated land but with a rapid move towards cleaner technologies and renewable energy.

The UK market was valued at £25 billion in 2005, and the UK currently has a 4.7% share of the global market - France has 7% - US 16% - but China and India will soon be competing.

In the North West we have over 1800 companies in the sector, with over 90% of these being small and medium sized enterprises (SMEs). The sector employs over 53,000 people and has an annual turnover in excess of £2.7 billion, with exports of approximately £320 million. North West recycling technologies has seen 141% growth in turnover to £292m in 2005, and the region’s waste technologies market has had a 49% growth in turnover to £1.3b in 2005.

With so many companies in the North West being SMEs, partnering is often the best way for exploiting the opportunities in a sector which is growing so quickly – and where innovation is key.

PAVE trademeeting is a business-to-business matchmaking event, which offers the opportunity to meet other European companies to discuss business and create networks of mutual benefit in order to become even more competitive.

At the events people from all over Europe who are interested in doing business meet each other in 30 minute intervals and discuss cooperation possibilities. The business meetings are pre-booked according to the clients’ needs and wishes, so they are a cost-efficient opportunity to meet up to 20 potential business partners during two days - a kind of business speed-dating!

PAVE trademeeting is a cost effective and targeted way to meet with potential buyers, suppliers and co-operation partners from many different regions. The PAVE trademeeting events reflect the growing trend towards more sector specific and technology oriented events.

The first event in the 2007/08 programme is PAVE Vilnius2007, an international business-tobusiness matchmaking event for the water treatment, water supply and related water services sectors in Vilnius, Lithuania on 3rd 5th October 2007.

The event in Vilnius is followed by similar events: PAVE Berlin2007, 3 - 5 December 2007 will be focusing on the waste management and recycling sectors, PAVE Wels2008, Austria, 4 - 6 March 2008 is primarily for the renewable energy and energy efficiency sectors and PAVE Viborg2008, Denmark, 21- 23 April 2008, will concentrate on the biomass and bioenergy sectors.

Each event is expected to bring together 150200 companies and organisations from more than 15 countries. All will have opportunities, over the two days of the events, to discuss commercial, financial and technical / production co-operation.

Once all companies have registered for matchmaking and decided who they wish to meet, a final schedule is sent to all participating companies. If during the two-day events, you hear of an interesting company which is not on your list, simply contact the event organisers at the help desk and a meeting can normally be booked. All the meetings will be in English.

For more information contact Lynn Shaw at UK Trade & Investment North West on 0845 603 7053 or email info@uktinorthwest.co.uk or visit the website www.trademeeting.com

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North West manufacturers urged to seize untapped potential of emerging markets “Regional manufacturers are being urged to look at the wider opportunities and the challenges that globalisation offers as other emerging economies seek to ride the wave of China's success.” says Philip Storer, audit partner at BDO Stoy Hayward.

“The North West relies on China for 8.5% of imports. Although this figure may appear to be relatively small, the increase in trade between the North-West and China in the three years from 2003 to 2006 is 49% - a significant increase.

and are investing in skills, science and infrastructure to meet these goals.

“This is backed-up by our additional research with the centre for economics and business research (cebr) into the North West region’s dependence on imports from five key economies.

“50.6% of imports are from the EU, 8% from the USA, 1.8% from India and 1.1% from Japan (the fifth key economy being China at 8.5%).

challenges and opportunities as a result of the rapid pace of globalisation. Many are already responding in a number of ways – from enhanced focus on the customer through innovation and intellectual property through to reducing costs by off-shoring and business re-engineering.

“However, what is clear from this report is that there is still considerable untapped potential in low cost economies – opportunity which North West firms have the capability to unlock.

“Between 2003 and 2006, the region’s import trade with the EU increased by more than 29%.

This is the largest increase in trade with the EU of all UK’s regions. Between 2003 and 2006, the North West’s export trade with the EU increased by more than 52%.

“Historically the UK has relied on European and North American markets for export growth.

This means however that they may have been slower to tap into new and emerging markets.

The rapid pace of globalisation means that firms cannot ignore the range of competitive threats and opportunities that will continue to emerge.

“The study provides an in-depth analysis of where key low cost economies are heading and what this will mean for manufacturers in the UK.

“UK manufacturing still has significant competitive advantages and the opening up of these new and rapidly growing markets offers considerable opportunities to take advantage of demand for higher technology products and expertise.

“The majority of manufacturing companies already have some form of connection to a low cost manufacturing process – either through outsourcing or direct ownership.

“China and other emerging economies have clear ambitions to move up the value chain

“North West manufacturers – along with their UK counterparts - face a wide range of

“UK manufacturers have therefore been able to build in a low cost platform to their own production process and supply chain as a way of addressing price pressure in the market.

“Recently we have worked closely with the EEF, the manufacturers’ organisation, on a piece of research called - Global Challenge – Opportunities and Threats for UK Manufacturers’.

“However, it’s important for North West manufacturers to remember that low labour cost does not automatically mean a lower cost of production. If labour cost is not a large part of the cost of sales, obtaining low labour cost benefits becomes less compelling.

“In addition, the logistics of the supply chain must be considered: Where should you outsource or locate? What are the freight and insurance costs? What are the inventory hold and working capital costs? What are the management and control risks?

“There are many factors that need to be considered before any move to an offshore location. But the advantages can be significant.

“But businesses who are looking to expand into emerging markets do need to be aware of potential pitfalls and ensure they work with advisers who have international capacity.

“Many of our clients are already following this strategy and are able to benefit from our network of 600 offices in 100 countries.”

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Employ international students and open up your business to a world of experience North West businesses looking to research or expand into overseas markets can tap into a wealth of experience, cultural knowledge and specialist language skills by employing students from over 160 countries worldwide.

International Talent is a professional brokerage service organised by The University of Manchester and launched earlier this year.

The project helps companies hire international students for short-term project work, in order to support their business development and provide an opportunity for the students to gain valuable work experience.

Over 7,000 students from countries including China, India, USA, Malaysia, Saudi Arabia and across Europe currently study a range of subjects at the University, from Business and Finance to Science, IT and Engineering. Several come to study mid-career and have previous business experience.

The International Talent team provides a simplified route to accessing this pool of talent.

Services include discussion of individual business requirements; assistance with shaping work experience briefs and job descriptions; advice on student availability, appropriate salaries and alternative options; targeted vacancy advertising, and other practical

recruitment assistance. All services are free of charge.

Examples of projects that overseas students have assisted organisations with include: market research, assessing new overseas markets for products and services; document translation; regulation investigations for export; customer satisfaction surveys with overseas clients; developing international contacts, and event management for overseas clients and visitors.

Amanda Wood, Head of International Career Development at the University of Manchester, says, “International students can help North West businesses in a variety of ways, bringing multilingual ability and a depth of knowledge and understanding of various nationalities and cultures. Companies that have employed our students have found them to be mature, intelligent, motivated and reliable employees.

We would encourage any firm with international opportunities, either here in the UK or overseas, to get in touch.�

The company recruited six students from The University of Manchester as multi-lingual marketing assistants, to assist them in exploring overseas markets for their new system in Germany and France, then Korea and South East Asia.

Managing Director Paul Banks says, "Recruiting international students has helped my business enormously, since I wouldn't have been able to complete my brochures and foreign web pages or communicate with overseas buyers and trade magazines without their help.

"It has been very useful for a small start-up business such as myself to have the services of International Talent. The service is quick and highly professional, and the quality of candidates applying for positions has been outstanding. This scheme is way ahead of anything else within the commercial sector and it has really helped my business develop.�

Print technology company improve their overseas image with student help

For further information, call the International Talent Team at The University of Manchester on 0161 275 2828,

Image Alchemy is a digital technology company, whose new photographic print system enables both professionals and hobbyists to create better quality pictures.

or visit the website at: www.manchester.ac.uk/careers /international talent

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STOP PRESS! £4.9m of NWDA support helps UKTI to reach more firms in the North West The Northwest Regional Development Agency (NWDA) has committed £4.9m of funding over the next three years which will boost UKTI’s aims to raise companies’ awareness of global opportunities and risks and to assist them in competing internationally.

A full, integrated specialist international trade support service will be provided to North West businesses combining nationally-funded services and targeted regional services into one single offer to businesses.

UKTI will use NWDA funding to target priority sectors and markets as set out in the Regional Economic Strategy and the Internationalisation Strategy and Action Plan. It will support five key workstreams: 1. An Enhanced Sector-Focused International Trade Adviser Service 2. Six Sector Missions Per Annum 3. A Priority Country Market Programme 4. A Regional Economic Strategy Priority Sector-Focused Meet the Buyer Programme - more details below 5. A Strategic Alliance Service - more in the centre pages of this issue

Dates for your diary UKTI, with the strong support of the NWDA, will be continuing its programme of International Meet the Buyer events over the course of the next two and a half years. The next two events will be: FOOD & DRINK 4 March 2008 at Tatton Park, Cheshire AEROSPACE PROCUREMENT 13 March 2008 at Old Trafford, home of MUFC If you are a NW company with an interest in either of these sectors and want to meet new international buyers from a wide range of countries in one day and under one roof then these are the events for you.

Over the last three years UKTI has organised 10 Meet the Buyer events in the region which have attracted over 400 NW companies and involved over 200 foreign buyers.

These events have generated over £20million worth of business for NW companies.

Further details about both events can be obtained from our organisers: Business to Business Exhibitions Ltd on 0191 281 5777 or www.business-business.co.uk

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Sometimes it’s just pure luck that helps your company win its first overseas contract.

And sometimes it’s not.

Companies across the North West can access a complete package of professional, international trade support services from UK Trade & Investment by calling: The North West International Trade Team Tel: 0845 603 7053 Email: info@uktinorthwest.co.uk

Where will your business be on 28th February 2008? ...Smart companies from the North West will be making a world of difference to their overseas trade potential at International Business Day 2008...

Sussex and London universities. He is responsible for advising the bank and its customers on developments in the UK and global economies and the performance of regions and key industry sectors.

Now an established and much anticipated event in the region’s business calendar, next year’s International Business Day – taking place at Manchester United’s Old Trafford Stadium - is set to be even more popularthan ever...

UKTI’s International Trade Director for the North West, Clive Drinkwater, will be speaking on ‘Why Internationalisation is Good for Business’.

There will be four informative panel sessions, chaired by industry experts who will be sharing their knowledge of specialist subjects and answering questions. The panel sessions are: • • • •

Keynote speaker is renowned Senior Economist in the Business Economics Unit at HSBC, Mark Berrisford-Smith, who studied economics at

How to research your markets effectively Bringing international plans to life Optimising your websites and e-commerce Cross cultural issues

Companies will also have the chance to meet a selection of UK Trade & Investment staff experienced in operating in overseas markets, who will be on hand throughout the day and

over lunch to offer one to one advice and discuss trading opportunities.

Last year’s event was voted a huge success by attending businesses, with the vast majority of those providing feedback saying they would be keen to receive information about future events and services.

Demand for places for this year’s event is likely to be high and places are strictly limited, so companies are advised to register their interest by contacting the International Trade Team below.

Call 0845 603 7053 or email info@uktinorthwest.co.uk

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UKTI North West region Calendar of events at home and overseas In partnership with Chambers of Commerce North West the UK Trade & Investment International Trade Team is the first point of contact for local companies looking to unleash the business growth potential of international trade.

All enquiries

Environmental Technology, ICT, Manufacturing and Engineering and Creative Industries.

Specialist teams include the Asia-Pacific Team, the European Information Centre with its tender service (TED), Export Documentation, Strategic Alliance Services and International Trade Agreements Services.

The experienced advisory team delivers a range of UK Trade & Investment programmes, working closely with companies at all stages of the international business development cycle.

International Trade Advisers have experience in key sectors such as Chemicals, Biotechnology,

The team also organises a comprehensive programme of trade events and international market visits, geared to giving companies the confidence and information needed to develop their trading potential - details below...

Companies across the North West can access a complete package of professional international trade support services from UK Trade & Investment by calling:

The North West International Trade Team Tel: 0845 603 7053 E-Mail: info@uktinorthwest.co.uk

17 October 2007 Asia Pacific ICT Clinic, Daresbury

29 November 2007 India Event, Preston

3 - 12 March 2008 Trade Visit to Australia

21-27 October 2007 FIMAI Exhibition, Brazil

3 - 5 December 2007 PAVE, Berlin, - Waste management and Recycling Business Matchmaking

4 March 2008 Meet the Buyer - Food & Drink Tatton Park, Cheshire

29 October - 3 November 2007 North West Market Visit to China

29 January - 1 February 2008 InformexUSA Exhibition, New Orleans, USA

30 October - 1 November 2007 Mini mission to Prague

8 February 2008 Greater China Roadshow

6 - 9 November 2007 Trade Visit to Budapest, Hungary

9 - 13 February 2008 Trade Visit to Dubai, UAE

8 - 9 November 2007 Scandinavia Consultation Business Day

13 March 2008 Meet the Buyer - Aerospace Procurement, Manchester United Football Club, Old Trafford

18 - 22 February 2008 North West Market Visit to India

13 November 2007 Metro Atlanta Chamber of Commerce, Manchester 17- 27 November 2007 North West Market Visit to South Africa, and UK Vocational skills and education mission

Overseas Locations

4 - 6 March 2008 PAVE, Wels, Austria Business-to-business matchmaking event Renewable Energy and Energy Efficiency sectors

21 - 23 April 2008 PAVE, Viborg, Denmark Business-to-business matchmaking event Biomass and Bioenergy sectors

28 February 2008 International Business Day, Manchester United Football Club, Old Trafford, Manchester

3 - 5 December 2007 PAVE, Berlin

21 - 23 April 2008 PAVE, Viborg, Denmark

30 Oct - 1 Nov 2007 Mini mission to Prague

6 - 9 Nov 2007 Trade Visit to Budapest, Hungary

4 - 6 March 2008 PAVE, Wels, Austria 29 Jan - 1 Feb 2008 InformexUSA Exhibition, New Orleans, USA

29 Oct – 3 Nov 2007 North West Market Visit to China

OCT NOV DEC

18 - 22 February 2008 North West Market Visit to India

JAN FEB MAR APR

9 - 13 February 2008 Trade Visit to Dubai, UAE

21 - 27 October 2007 FIMAI Exhibition, Brazil 17 - 27 November 2007 North West Market Visit to South Africa

3 - 12 March 2008 Trade Visit to Australia