30/07/2014


By Michael Oliver, Chairman, Oliver Valves

Export has played a pivotal role in the success of Oliver Valves, the Knutsford-based manufacturer of valves for the oil and gas industry. Here I tell the story of my international success and call for more support for British exporters.

When I started my business in 1979, the thought of bringing potential customers to my modest start-up headquarters – or my garage as it was at the time – was absurd. I wanted to paint a picture of an established company with the resource and man-power to tempt top firms into working with me, so I did this by targeting businesses overseas.

This was one of the main reasons that I began exporting almost immediately, the other being the international nature of the oil and gas industry, which was growing rapidly in the Americas and Africa.

Some 35 years later and 90% of our nearly £100 million turnover comes from overseas trade. The business employs over 350 people internationally, has 10 offices around the world and we sell our catalogue of over 8,000 products in 80 countries across North America, South America, the Middle East, Africa, China and more.

This steady rise in orders has been fuelled by a surge in sales in key markets, including Brazil, the Middle East and Asia. As energy businesses continue to target less accessible oil and gas reserves in deeper and more remote locations, the demand placed on the valves used in extraction will continue to grow more intense, so our hard-earned reputation for 100% reliability and on time delivery stands us in good stead for the future.

Closer to customers on the ground

One of the biggest challenges of selling to customers overseas is convincing them that the service they will receive will be as good if not better than your local competitors.

As the scale of the Oliver Valves operation has grown, we have tackled this by investing in the technical capabilities of our overseas offices - not just sales and customer service - to deliver design and engineering services more rapidly. This helps us to keep ahead of our competitors by not only providing a reliable product, but by being there for our customers, in their time-zone, whenever they need to talk to us.

In 2013, we launched our first overseas design and engineering team in the Kuala Lumpur office. Previously all technical work was delivered from Knutsford. Urgent technical requests from Malaysian customers can now be met without delay.

This has delivered a major improvement in customer service, resulting in a series of large orders and a roll-out is planned for other territories in the year ahead.

Incentivising export

Exporting services and products is the only we will be able to reduce our out-of-control £1.3 trillion National Debt (Government overdraft). The interest alone is costing the country £51 billion annually.

Unfortunately, recent trade deficit figures from the Office of National Statistics (ONS) show the amount of exported manufactured products is not taking off in the way we’d hoped. In the first three months of 2014, figures showed the export of goods decreased by 3.7% to £72billion compared to the same period in 2013.

As the situation stagnates, it is crucial that the government steps in to help incentivise UK businesses to trade internationally. That’s why, for some time now, I have campaigned for an export tax credit which would motivate businesses to export and bring much needed growth to our economy.

This would be equal to 10p for every £1 of overseas sales, which businesses would then use to offset their corporation tax bill. Let’s say a company exported £40million-worth of goods and has pre-tax profit of £8m, it would only pay tax on £4million of the profit, with the other £4million exempt.

Each 10p tax credit would be audited, ensuring every penny was used to reinforce export sales activities. The overseas earnings growth that would be achieved would be huge and this is vital incentive to encourage at least 100,000 extra small firms to take up exporting.

The result would be a sizeable increase in HMRC tax take as sales round-up in export markets. More importantly, businesses would grow and hire more people – reducing UK unemployment, and have a reason to expand in the UK. Ultimately, we as a country need to build our way to a recovery, and the onus remains on the government to provide proper support for established and aspiring British exporters.

Top tips for exporting

Don’t try to be all things for all people. My advice is to focus your success on one opportunity at a time.

· Stay close to customer by having staff on the ground, and show willingness to invest in people who know the language and culture.
· Make sure the products you are selling are the best. Customers depend on reliability and delivery performance. Invest in research and development to stay ahead of competitors.
· Hire the best people you can afford.