BQ North East Special Feature

SPECIAL FEATURE Conversion: Winning sales from the Rugby World Cup

Photo courtesy of Newcastle Gateshead initiative

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The game of many sides A welcome from David Coppock, regional director North East, UKTI We are delighted to have the Rugby World Cup coming to Newcastle this October. It’s a real coup for the city and for the region, particularly because we have international teams from countries such as South Africa and New Zealand coming to play here.

The City Council, International Newcastle and the NECC, along with UKTI, will be running a series of cultural and business events around the three-day celebration.

October 1 will see a large business engagement event hosted by Newcastle City Council and supported by the North East Chamber of Commerce. Many South African businesses and North East businesses which have interests in developing markets in South Africa will be attending. There will also be a number of high profile VIPs including Lord Francis Maude, Minister for South Africa Baroness Scotland, Guy Warrington, the Foreign Office prosperity director, and the High Commissioner for South Africa.

The following day we have a Europe and Africa debate to explore the North East’s position in Europe and business interests in Africa. The highlight will be the South Africa versus Scotland game on October 3.

The following week on October 9 sees New Zealand versus Tonga and we are running

similar events, with the New Zealand High Commissioner coming to speak along with various other people with interests in New Zealand.

It is significant that the Northern Powerhouse is focused on developing our markets overseas, particularly markets outside Europe.

The Prime Minister invokes the spirit and passion of Elizabethan traders and wants British business to look at markets further afield than just Europe, such as South Africa and New Zealand. So the Rugby World Cup is a fantastic opportunity for the North East to work with that agenda and to develop links with these fast growing markets.

South Africa is of particular interest to North East businesses engaged in the energy sector including renewables. There is also a lot of oil and gas activity in Sub Saharan Africa and off the West Coast of Africa and there’s now a large sub-sea requirement off the East Coast of Africa. Also South Africa’s National Ports Authority has just launched a huge redevelopment programme and it is looking for partners and there will be much activity there for North East business to get involved in. There are strong links between Sunderland AFC and South Africa with their involvement with the Invest in Africa initiative.

New Zealand is a major player in agri-tech, life sciences and pharmaceuticals – all of which have a strong overlap with this region, so a lot of North East business interest will be developed with New Zealand.

Now, of course, the North East has excellent transport links to South Africa and New Zealand through the daily Emirates connection of Newcastle to Dubai, which links to Wellington or to Johannesburg.

Following on from the Rugby World Cup, UKTI has commissioned a series of high profile trade missions with business partners such as NOF Energy and RTC to lead on Northern Powerhouse trade missions.

South Africa and New Zealand represent excellent opportunities for the North East and we have every intention of making the most of them. n

‘The Prime Minister invokes the spirit and passion of Elizabethan traders and wants British business to look at markets further afield’ David Coppock, regional director

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Great spot for business

Export success in South Africa has opened up many opportunities for Profile Analysis, as Peter Jackson reports

Middlesbrough-based Profile Analysis looked at exporting to South Africa nearly five years ago, as part of a strategy of seeking markets in English-speaking countries.

The business has developed a field sales management app and reporting system.

Chief executive Alan Timothy explains: “When a field salesperson has done a visit it lets him record that visit in a minute or less.

Rather than having to come back and log onto a CRM system, this lets them do it in the field. That can link to a CRM system and it automatically generates information and reports for both the sales person and the sales manager.’’

The seven-year-old business’s clients include blue-chip names such as Jewson, Nestle and Snap-on-Tools. It has 10 employees.

In targeting South Africa Profile Analysis used the help of UKTI’s OMIS – overseas market introduction service.

“Their OMIS scheme is very flexible and we have used it two or three times,’’ says Timothy. “Typically with an Omis you

‘We concluded we were not going to do very much business if every time the currency changed our price changed.’

Alan Timothy, chief executive

are encouraged to get market research but what we bought was a launch in the embassy. The invitations come from the High Commissioner, so people tend to come, like the managing director of Nestle South Africa.

When he got the invitation from the High Commissioner he accepted and was very keen to attend.’’

He adds: “We used UKTI to do a launch down there to identify a distributor and to get some interest from potential clients.

We achieved both of those aims. Since then we have continued to grow and serve the South African market.’’

The company now does about £70,000 worth of business in South Africa every year.

As the product is licenced software IP, that is all profit.

The distributor is based in Johannesburg and, although there are some clients in Cape Town, most of the focus is in the Johannesburg area.

“South Africa is a great place to do business,’’ says Timothy. “The people there are very receptive to British technology. I look forward to going down to see the distributors. The people are really nice, you always get a good hearing when you go down.

They are less impressed by the big company approach. In Europe the attitude is `Oh, you’re not salesforce.com or you’re not Microsoft’. In South Africa they are much more inclined to take you as you are.’’

Success in South Africa has encouraged the company to sell into other markets, such as the US, Canada, Saudi Arabia, the Emirates, Jordan, India, Germany and France.

“We have progressed since we have been to South Africa so we now do a lot in the Middle East, because in most of the Middle East English is spoken,’’ says Timothy.

“The product has come on a lot and our understanding of the export market has come on a lot.’’

“We made the decision always to price in local currency. Across the euro, the dollar and the rand – usually one is up, one is down. We came to the conclusion we were not going to do very much business if every time the currency changed our price changed. Now 35% of Profile Analysis’ turnover is export and that proportion is growing. Timothy says: “Of all the support agencies we deal with UKTI are by far the most positive, the most supportive and the most helpful.” n

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A significant partner South Africa is open for business, explains Pumela Salela, country head, Brand South Africa : UK South Africa remains a competitive business and investment destination despite challenges in the global economy. The country continues to compare well with other emerging markets and it is committed to improving its global competitiveness and reputation.

According to the OECD’s Restrictiveness Index, South Africa ranks amongst the most open jurisdictions for FDI (foreign direct investment) in the world. Openness is reflected in the overall trend of growing FDI into South Africa over the last 20 years and FDI now accounts for around 42% of GDP. Over the last five years South Africa accounted for the bulk of new investment projects in Africa with investment arriving from the US, some member states of the EU and increasingly from China, India and other Asian countries. The 2014 AT Kearney Foreign Direct Confidence Index ranks South Africa 13th among 25 leading economies moving up two places from 2013 and ranking higher than countries such as Switzerland, Sweden and Netherlands. South Africa ranks 56 out of 144 in the WEF Global Competitiveness Index 2014/15 survey and ranks second overall in Africa. In the energy field, Eskom is currently constructing two mega coal fired power plants and a pump storage facility. The projects will see over 10,000 megawatts of capacity connected to the national grid.

Apart from the Eskom new build programme, the government has procured 4,000 megawatts from the Independent Power Producers (IPPs) under the REIPP procurement

‘At Brand South Africa we encourage any investor with an interest in South Africa to look at these priorities and bring about solutions’ Pumela Salela, country head process in three windows. The first two bid windows of the REIPP procurement process attracted R82.7bn from private investors, with window three expected to be R51bn at financial close.

In mining, although South Africa has steadily declined in terms of production ranking in recent years, it remains a significant strategic partner as it is not only within the top ten major production sources in the world, but the Government’s beneficiation strategy seeks to align it to the national industrialisation programme, which sets to enhance the quantity and quality of exports, promote creation of decent employment and diversification of the economy, including promotion of the green economy.

South Africa is the last frontier country for petroleum development, including off shore oil and gas as well as shale gas prospects. It has possible offshore oil and gas resources of 9 bn barrels oil and 11 bn barrels oil equivalent of gas. The country has an estimated shale gas resource of 490 trillion cubic feet (TCF) and the conservative estimates for an economically exploitable resource range from 18 TCF to 70 TCF.

President Jacob Zuma has indicated nine areas that will be a focus for the financial year 2015/16: 1. Resolving the energy challenge; 2. Upping the agricultural value chain; 3. Beneficiation through adding value to mineral resources; 4. More effective implementation of higher impact industrial policy action plan; 5. Encouraging private sector investment; 6. Moderating workplace conflict; 7. Unlocking the potential of SMEs, cooperatives, townships and rural enterprises; 8. Reform of state owned companies, broadband roll out, water sanitation and transport infrastructure and 9. Operation Phakisa which aims to grow the ocean economy - such as the shipping and storage of energy products.

At Brand South Africa we encourage any investor who has an interest in South Africa to look at these priorities and bring about solutions that will assist in each of the respective spheres.

South Africa is a new democracy having attained its freedom in 1994. As part of its developmental trajectory, South Africa has developed a National Development Plan or Vision 2030 which will drive its economic and social development. South Africa has also realised the importance of diversifying its traditional economic partnerships with developing countries.The BRICS markets are critical to this objective. The National Development Plan is the underlying foundation on which all the above mentioned opportunities are built. It is the blueprint for achieving South Africa’s economic success. n

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Shining on the kids South Africa is a growing market with great export opportunities as one North East company has discovered. Peter Jackson reports

An innovative lighting project has transformed Sizanani settlement in South Africa, cutting electricity consumption by 70% and improving children’s education chances. The solar street light has also ended the local residents’ fear of walking outside at night as the light’s brilliance covers the area almost half the size of a football pitch.

The solar street lighting technology was donated in February by Newcastle based Videre Global in partnership with a South African company.

“Our life has totally changed,” said one of the project beneficiaries, Ms Anna Mahlangu.

“The solar lights are keeping us out of the dark and our children are enjoying longer hours of reading.”

Videre Global was only formed earlier this year but is already winning contracts to supply its solar PV lighting throughout South Africa.

Managing director Craig Morgan explains: “There’s a massive problem with energy in South Africa, so we looked to create our own solar street lights. We decided to look for products already out there and innovate

those products.

“Now we are supplying rural, off-grid, rural solar energy lights and solar home packs to rural locations.’’

In December 2014 they got an opportunity in South Africa from the Agricultural Development Department to deliver an energy project for Sizanani settlement.

They went on a North East Chamber of Commerce trade mission to the country, launched the business in South Africa in March and delivered that project.

Morgan adds: “Since then we’ve agreed a distributorship and we’ve set up Videre Solar Africa and we are exporting our product to them and they are selling into South Africa and through into Botswana. In Botswana we are looking at five or six large projects for government and for private industry on solar farms and energy storage.’’

Videre is also bidding for an EU funded electrification contract project to supply energy to schools in Botswana, which is worth 6m euros.

“We are looking at doing about US$180,000 every two months to South Africa in

container values of renewable products,’’ says Morgan.

There are currently just the four directors in the company but it is planned that when Videre reaches an annual turnover of US$1m, which it hopes to achieve next year, it will look for premises and take on employees.

“We are working with a consortium looking to do a feasibility study for solar PV in the Democratic Republic of Congo and have put a tender together which will be submitted shortly. We are looking at a few projects in Mauritius and we are looking at a potential market in Zambia and Namibia.’’

Morgan urges other businesses to look at the South African market but to do their homework first.

He says: “Doing a market visit is crucial and going on a UKTI or Chamber of Commerce trade mission to the country and meeting people through their networks is crucial to get in. You have to create good partnerships in Africa because it’s all about who you know and if you find the right partner you’ll make progress.

“You have to have a presence on the ground.

It’s not like Europe where you can go and have a couple of quick visits and do business.

Things do not happen if you are not on the ground and are constantly in contact.’’

There are also important cultural differences to be aware of.

He explains: “There’s a thing called Africa time that Europeans tend to find very frustrating. You go out there with all your meetings planned and think you have a great itinerary but when you get there everything will change, meetings will get cancelled and moved. You have to have patience.

It’s a time-consuming and complex market but it’s a great market and there are huge opportunities in Africa in all sectors. It’s definitely worth looking at. n

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London’s less of a magnet There are great opportunities for business between the North East and New Zealand, as Peter Jackson discovers talking to Daniel Taylor

Daniel Taylor is London based but encourages his countrymen and women to look beyond London.

The trade commissioner UK and Ireland with New Zealand Trade and Enterprise, NZTE says: “We are seeing many more companies actively consider locations outside London and I think that’s a positive – London’s not always the answer. We encourage companies to think about where their customer base is, how they are going to service that customer base and if it happens to be in the North East then it makes eminent sense to be physically located there.’’

Which is good news for the North East and Taylor has made a couple of trips to Newcastle to meet with various agencies.

A major role of NZTE in London is to support New Zealand businesses once they have made the decision to do business in the UK or Ireland, either through exporting or investment.

“Once they make the decision our intention, as the Government’s national business development agency, is to help those companies grow bigger, better and faster,’’ he says. It does this through market research and intelligence, forging connections and, of course, making sure people are aware of the advantages of trading with New Zealand.

Chief among these, he argues, is the ease of

‘New Zealand used to be seen as being the other side of the world, now it’s seen as the other side of the clock’ Daniel Taylor, trade commissioner UK doing business over there. He explains: “New Zealand has very business friendly conditions, it’s very open as an economy.

“Another advantage from a UK perspective is that whereas New Zealand used to be seen as being the other side of the world, now it’s seen as the other side of the clock. It provides a location that enables 24-hour support and activity, so while we’re asleep here the team in New Zealand is able to do their work and you are getting 24-hour activity, which is a real positive.’’

He also points to a familiar legal, political and cultural environment.

“We speak roughly the same language,’’ he adds. “New Zealand has a workforce that tends to have an international view. New Zealanders are great travellers and you’ll find there are a large number of New Zealanders who have spent some time living outside New Zealand and that provides a global view that

enables rounded decisions to be made.’’

For ambitious exporting companies New Zealand can not only be an export market in its own right but also serve as a gateway to the enormous Australian and Asian Pacific markets. It has an extensive free trade agreement with China and perhaps the most comprehensive free trade agreement in the world with Australia and also has strong connections with North and South Asia.

Similarly, for any New Zealand company, the UK provides a conduit to Europe.

“We see a lot of New Zealand companies that beachhead themselves in the UK and use that as a branching out point to Europe,’’ says Taylor.

Any North East company thinking of doing business in New Zealand or with New Zealand should contact NZTE as a first step.

“We’d welcome the chance to have those conversations,’’ he says. “We try to make it as easy as possible for companies to make an investment into New Zealand and we work hard to tie in with the other New Zealand government agencies to provide a one-stopshop for investors and potential investors.

“I think there’s a real opportunity to do more around partnering with New Zealand companies and UK companies.” n

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Digi hub’s appealing One New Zealand firm has set up an operation in Newcastle and is thriving Spotlight Reporting was set up in 2012 in Wellington, New Zealand, by accountant Richard Francis.

His aim was to present financial information in an easily digestible and understandable format by taking advantage of moves towards online reporting. It puts financial information into graphical formats to explain reports such as profit and loss accounts, or any other key performance data.

About a year ago Darren Glanville set up Spotlight Reporting’s UK operation based in The Toffee Factory Newcastle and since then the team has expanded to five.

“We look to expand that over the next three to six months to probably include between eight and 10 people,’’ says Glanville. “In growth, we’re over 170% up on where we were this time last year. Revenues have almost tripled in terms of what we have done over the last 12 months.

He estimates that between 60% and 70% of the business comes through accounting practices. Glanville worked for a number of New Zealand technology businesses before joining Spotlight Reporting, including five years with the New Zealand Cloud-based accountancy software business Xero.

Value added the selling point With its temperate climate, high rainfall, fertile land and low population density, New Zealand is a major food and beverage producer with products including dairy, meat, seafood, horticulture and wine. 54% of NZ’s export goods by value are in food and beverage manufacturing 1/3 global trade in dairy products is generated by New Zealand and it has 3,783 food and beverage manufacturing firms.

A quarter of the country’s food and beverage manufacturing sector is foreign owned and New Zealand currently has investments in place from more than 60 global food and beverage multinationals. Daniel Taylor, trade commissioner UK and Ireland NZTE, says: “In food and beverage the focus is on value-added, high end niche products. We are never going to be a commodity supplier into the UK market, it’s much more about providing something that is differentiated and is able to articulate a lot of the values people associate with New Zealand around sustainable, traceable, clean, well produced and managed food and drink.’’

Apart from food and drink, New Zealand specialises in manufacturing high-value, short-run production cycles. Its key areas of strength include the aviation, energy, healthcare, marine, security, industrial equipment, and food, beverage and bio-processing technology sectors.

Taylor says: “Often the focus for New Zealand companies is solutions in those tech spaces where they can enhance productivity and efficiency, which is something New Zealand does very well. We are very much a producer of niche rather than broad brush.’’ £606m of NZ’s exports are from high tech manufacturing and it has 5,380 high tech manufacturing firms.

Significantly for North East England, New Zealand is also a fast-emerging oil and gas producer with underexplored basins and significant petroleum potential. Oil and gas exploration and production has grown strongly in recent years and is New Zealand’s fourth largest export. The Government aims to increase the value of New Zealand petroleum exports ten-fold by 2025.

Oil and gas companies are spending up to £1bn on almost 90 new oil exploration and production wells. New Zealand now holds rights to some 5.7 million sq km of ocean and seabed (22 times its land area) containing 18 known sedimentary basins.

All of New Zealand’s producing oil and gas fields are currently in the Taranaki region. However, the Government believes 17 other basins are likely to yield significant finds. n

“There’s something about the technology and that drive to make things really simple yet really effective coming from New Zealand,’’ he says. “We see that wave of tech businesses coming out and establishing themselves and it’s so innovative and disruptive to traditional technology.’’

So why choose the North East?

“It’s not just London that’s attracting Kiwis, it’s also the North East,’’ he explains. “It’s a great tech and digital hub. Generally in a New Zealand business people look to have a London HQ but the North East is a great cost base, we can get great premises. n

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09.00 – 09.30 09.30 – 10.30 10.30 – 11.30 11.30 – 12.30 12.30 – 13.00 13.00 14.00 15.00 16.00 –16.30

Registration Intro & presentations Sectoral session – renewables Sectoral session – business Services (Inc call centres) Lunch Presentations Sectoral session – education, skills & training Sectoral session – oil, gas & marine engineering Wrap up

https://www.necc.co.uk/events Celebration of the Rugby World Cup, Evening Dinner and Fashion Show, Banqueting Suite, Newcastle 18:30 – Welcome drinks, networking 19:00 – Opening welcome 19:05 – Presentation 19:20 – Fashion show 19:35 – Starter 19:55 – Fashion show 20:15 – Main course and dessert 21:20 – Presentation 21:50 – Final presentation and thanks.

22:05 – Networking and close. https://www.necc.co.uk/events 2 October 12:30 - 15:30 Europe v South Africa Debate Newcastle Falcons Debate pitches from France, Romania, Italy v South Africa Debate, 15 minute pitches with questions by each speaker followed by a roundup and vote. Debate to include subject matter relating to ease of entry into market, using one country as gateway into other markets with geographic or historic links.

09:00 - 12:30 Sector-based visits

16:00 - 17:00 International Networking Club, Press Room, Newcastle Falcons Informal meeting with a couple of short presentations from South Africa contingent 17:15 - 22:00 Legends match, Newcastle Falcons 3 October 13:00 – Pre-match refreshments, Newcastle, Science City 14:45 – South Africa v Scotland, St James’ Park 6 October 08:30-6:00 MSB Golf Day, Ramside Hall, Durham Elaine.tatters@mobile.ukti.gov.uk 7 October 09:30-13:30, Oil and Gas Market Briefing, NOF Energy, Venue TBD 09:30 Registration 10:00 Welcome by NOF Energy 10:10 Australia High Commission 10:40 Australia case study 11:55 Break 11:15 New Zealand High Commission 11:45 New Zealand case study 12:00 UKTI North East services 12:15 NOF Energy International Business Services http://www.nofenergy.co.uk/n25-events.html 12:30 Network with lunch (13:30 close) 8 October Evening, Durham and Northumberland Rugby Union Evening Dinner, RWC Fan Zone 15 October 08:00 – Doing Business in Northumberland, Linden Hall, Northumberland Insider Breakfast meeting with a Rugby World Cup focus.

Rececca.baron@newsco.com http://www.insidermedia.com/northeast/ If you are interested in any of this activity or for more information on any of the above contact the UKTI North East on 0345 1360169 or northeast@mobile.ukti.gov.uk