Some of the region’s most experienced and knowledgeable exporters, along with those that offer exporting and importing advice – gathered in Cambridge to discuss a range of issues that impact their businesses.
The conversation ranged from how distribution networks and hubs should be managed, the impact of US tariffs, intellectual property and trademark issues and the best way for businesses to break into new markets. The group also discussed what new and emerging trends are being seen.
Ilona Karpanos, international trade & economic development manager, Cambridgeshire Chambers of Commerce
I work predominantly with SMEs seeking to expand into international markets, supporting them in collaboration with the Department for Business and Trade (DBT). One clear trend I’ve observed is that more and more UK businesses are looking to establish a presence beyond the domestic market.
I always prefer meeting businesses face-to-face, as it’s the best way to truly understand their needs and goals so I can provide tailored support. Recently, we helped one of our members expand into West Africa – they are now on the verge of signing a contract with the Port Authorities in Ghana.
Many SMEs simply don’t have the time or resources to pursue opportunities overseas – that’s where we come in. Everything begins and ends with research. The success of any export initiative depends on it. Every product has its own potential market, and understanding which markets are the right fit requires thorough, targeted research.
Emma Queen, tax partner, S&W
I’m a business tax partner, leading the Cambridge team, looking after a lot of private businesses in the region. Many are private equity-backed, trading and being funded internationally and looking to open new markets.
One of the big challenges businesses faces is making sure they don’t accidentally walk into any local tax traps when setting themselves up in a jurisdiction. We can help with some of these structural issues. For example, they need to understand what the risks are if they have people on the ground. If a senior executive, who can sign contracts in an overseas territory, is operating in a country, then that country’s tax authority might say they are acting as an established business and therefore liable for tax. We help clients to navigate and manage these risks.
IP is a really interesting one for us, because clients quite often don’t know the value of their IP until they have to find it out. IP moving overseas can be very expensive without any cash coming in, you can find yourself with quite a significant dry tax charge.
My experience with the UAE has been pretty straightforward but with Saudi Arabia businesses really need to be there and have a local presence in order for them to take the business offering seriously.
With the rise in corporation tax, we’ve seen an increased interest in companies looking to use Patent Box in order to reduce the rate at which they pay corporation tax. We’re very involved in the Cambridge tech bubble, but we also look after clients in East Anglia. And we’re speaking to a lot of entrepreneurs about potentially leaving the UK. A lot of them ask about this but very few of them are actually doing it.
Chris Tattersall, managing director, Woolroom
Our key exports markets are the US and more recently Canada, having launched in North America in 2018 as we know there is a growing awareness of health and well-being, particularly on the West Coast. At the time that Brexit happened, we had a very strong European supply chain but were uncertain how these would be affected. So, we started to explore other markets, the US in particular.
Our products are all made from British wool, traceable back to the farm, and pre-Covid we shipped the product from the UK. We then began to establish a network of distributors, mainly through digital marketing. But doing business in the US has frankly been a nightmare recently, especially with the tariff situation, you’ve no idea what’s going to happen, it’s very difficult to plan ahead.
Manufacturing is done within the EU so we’ve been looking at the EU tariffs. We also do some US manufacturing, which has British components, so we are very mindful of the UK tariff agreement in that respect. We can pass costs onto the consumer but there’s an absolute limit to how much. We look at our competitors to try to work out where our limit is. Fortunately, we can be very agile with our pricing structure.
Companies that export to the US will have multiple distribution points and they will also have Canadian distribution points. There is a growing move these days to use brokerages which have facilities to allow shipping across the border between the US and Canada and paying minimal duty. Because of this we can deliver 30 per cent cheaper to the US out of Ottawa than we can from a northern State.
We’re opening five showrooms in China on the back of the trade war between China and the US, replacing a US brand in fact as a premium UK brand. But the big market for us is Europe – Brexit absolutely decimated our e-commerce business. So, we’ll be looking to establish a distribution hub in Europe. For us, market research is the single most important thing to do, especially with markets being so volatile at the moment.
Martin Hoather, operations director, Cambridge Pixel
We are a software and electronics company exporting 90 per cent of what we produce globally – mainly to the US and the Far East but also to 50-plus countries around the world. In terms of finding customers internationally we have benefited from being in very specific markets, selling to customers who are in the industry, and building machines for them. We go to trade shows, and we have targeted marketing. All this means business comes to us.
About a year ago we were starting working with the Chambers of Commerce because we wanted to move to more of an e-commerce model and with shipping online there’s a WTO agreement in place. Together, we put a policy in place which meant that when Trump started putting tariffs up, we had a system and a policy in place so we could advise our US distributor on being as customs-efficient as possible. And this has worked very well in the US and in other parts of the world too.
Bolaji Sofoluwe MBE, founder & managing director, ETK Group
ETK helps companies expand into export markets. So far, we’ve helped companies into 35 countries, and we’re present in five countries, including Brazil. We have developed a product called Momentum which supports companies in emerging markets that also want to export internationally. And we’ve now adapted that to suit emerging market customers who have unique challenges and complexities in the markets in which they want to export. We’re now feeding the product into projects worth over $300 million across Africa, and we’re hoping to do some more digital transformation as a company and be more of a technology-led business which has implementation capabilities going forward.
Going into Brazil was a strategic move as it has historic ties with the lusophone (Portuguese-speaking) market in Africa. Sending two colleagues out to Brazil to set up there has been an incredible leap for us and they are doing some very strong business out there.
Our future is in Africa, which is becoming a very important market, the amount of middle-income countries has grown by 50 per cent in the last three years. So, more and more companies will be looking for ways to explore the African continent. We’ve done projects in 34 markets, and we have people on the ground, so we can develop some very key market research data points that are crucial for businesses to succeed in those markets. We’re about to launch some software that companies can use to tap into this.
David Hill, managing director, Cocoda
We’re an export agency, supporting the export growth for SME businesses in the chocolate biscuit and confectionery sector. We handle exports to about 30 markets at the moment and spend a lot of time overseas. We represent seven different confectionery brands, effectively working as their export managers. Our routes to market tend to be via distributors. Trade shows are very important to us and officials from DBT often put us in touch with potential importers, but we have no involvement with logistics whatsoever.
In terms of non-tariff barriers, every nation has a different way of approaching imports from other countries. The UK has recently signed an FTA with Australia, which means our tariffs have gone from 5 per cent to zero. Where this becomes less advantageous is when it comes to trading in countries such as Thailand and Vietnam where it is incredibly complex whatever the tariff regime is. But tariffs don’t make our products any less competitive than anyone else’s, so while they are welcome, they are not the full answer to unlocking and growing business.
For some markets, we engage a consolidator in the UK, and they handle all of the shipping, do the registration, do the labelling, so they buy from us, then export them to our customers overseas. In such circumstances, it can feel surprisingly straightforward.
We grow by either selling more products to the same customers or selling the same products to more customers which is a constant dilemma for us. In terms of where we see the future, we’ll continue to be reactive with Europe due to increased friction post Brexit and focus on fast growth economies like SE Asia.
Derek Noakes, international trade team manager, Department for Business & Trade
The Department for Business and Trade supports companies of all sizes to grow through exports – whether they provide services or manufacture goods. In the East of England, as part of the Industrial Strategy, our focus includes technology and infrastructure sectors, reflecting the UK’s strength in services, which now account for around 60 per cent of all UK exports.
Our Export Academy offers practical training for businesses new to international trade. Companies can register via www.business.gov.uk to access tailored sessions and resources that help them become export-ready.
Successful exporters invest time and people into understanding markets. We advise businesses to rely on trusted sources such as www.gov.uk for up-to-date market intelligence and to avoid forcing research to fit preconceived plans. If the data says a market isn’t right – don’t go.
Digital tools are transforming trade, but human expertise remains vital. Our team and the Export Academy are here to guide businesses every step of the way.
Divyesh Kamdar, director, Comline UK
We’re a distributor of car parts in the UK and a European distributor too. We have hubs across Europe, and we serve about 50 countries in Europe and across the world. We initially found business via word of mouth, but things really changed for us when we started to go to trade shows and to build up our contacts across Europe.
Brexit was quite hard for us, we had to completely change our business – we used to be a British business that exported, we now regard ourselves as a European business with distribution hubs in Spain and Ireland which means we’re not restricted by Brexit. We’ve actually enjoyed the benefit of not trading in the US but with the rest of the world coming.
Our focus is very much on Europe but we’re increasingly building the brand across the world and getting a good deal of traction. So, in the next few years we hope to be doing business in some lucrative markets in Africa and also in South America.
Steve Hales, business director, Huxley Bertram
We engineer transformation, making special purpose machines and helping manufacturing companies completely transform their production lines. Half our clients are in the UK; the other half are based overseas. We do a lot of import and export for the machine parts we work on and, while we have some products, most of what we do is different every time – and each presents a challenge of how we can do it. We have about 50 machines going out every year and we have about 1000 spare items going out a year too.
Historically, business has found us and most of our sales come from us dealing directly with the client in their country. We have a distributor in Japan, and we’ve set up agency agreements in countries where we don’t have a distributor. We would of course like to build more products; to make more repeatable products but there is so much friction – we had Brexit, we now have the $800 de minimis threshold for commercial shipments into the US – so it’s sometimes very tricky to work out how to operate internationally.
One of the biggest challenges of most recently is when it comes to shipping materials, particularly base metals with steel or aluminium that need additional information. We therefore make very clear what’s contained in a shipment before it goes out. There are parts that we’ve manufactured ourselves and others we’ve bought in, so the materials certification is very important, being able to substantiate the origin of materials and the composition of the goods that we’re sending out.
Hakan Henningsson, national customs lead, S&W
I specialise in customs, advising UK businesses that are either exporting and also non-UK businesses who want to start importing to the UK. I advise all sorts of businesses, different sizes and operating in different industries, but all moving physical products in or out of the UK. For example, if a UK business is exporting to the US, goods will leave the UK, a declaration will need to be signed, so I can help to make sure the declaration is correct. If this is incorrect, it doesn’t generate any tax risks because there’s no duty on the export, but if you are responsible for goods arriving in the US, for example, and you’re paying the US duty, then we need to make sure you’re not paying more in the US than you need to.
If a UK product is manufactured in Germany, say, and then exported to the US, what is the country of origin? All the technical issues can make a really big difference in the overall cost for an exporter. And of course, no one wants to have goods stuck in customs because the information isn’t correct.
If a company downloads software in the US from a UK provider, there’s no customs declaration, you’re not paying a duty, but there’s a risk that there’s an export licence required because there might be sensitive information, so it might actually use military technology for example.
Even though we see a lot of the tariffs and counter tariffs, there are also free trade agreements being negotiated, which is good because they can reduce the cost for importers. Also, businesses are often paying duty unnecessarily and are not aware of the reliefs that are out there.
Richard Bickford-Smith, IP consultant, Basck
We are a boutique IP firm with about 100 employees across the UK, Poland, India and Sweden, and we support around 650 startups and scaleups from a range of areas. Intellectual property, by its very nature, is a global consideration – if you want to file a patent in one jurisdiction it protects you only in that jurisdiction – there is no such thing as a global patent or a trademark.
When a client starts looking to buy IP, we think very carefully about their strategies in terms of marketing or launching their products. We also need to think about whether they are importing or exporting from any regions and whether there are licensing or sublicensing agreements with any parties. The local law and regulatory frameworks of a country always need to be considered. For example, if you file a trademark in a public registry, anyone can see what’s published there and there are some jurisdictions, especially China, that will just copy your trademark aiming to get a payout in return for using the trademark if you were to then enter that jurisdiction later on. Licensing trademarks and patents can help mitigate tariffs by licensing a product or brand to a local manufacturer in a country with high import tariffs.
There are some interesting times ahead for intellectual property. AI will obviously have a significant impact, companies using it to draft patents. But there are LLMs that potentially scrape a lot of data on patents and trademarks, so it might be the case that companies might not just buy one patent but a whole raft of quite granular applications. Jurisdictionally, we’re likely to see some interesting changes, with Southeast Asia and Africa becoming more prominent.
Jose Richart, international trade adviser, Department for Business & Trade
My role at DBT is to help companies to develop their export strategies and identify opportunities in overseas markets. The most important element of finding a new market is doing the necessary research of that market and we can help with this.
We encourage businesses to look at maybe three or four markets rather than at the whole world. We have people on the ground in markets across the world and they can supply intelligence on issues such as regulation, customs and host of other procedures in that country.
Research must be done properly. But the key thing then is to go out to see the market – you simply can’t do business with someone overseas by email from the UK, it just can’t be done. Europe is only two hours away after all.