With the UK government pushing the idea of Global Britain and encouraging business to find new markets outside of the EU, Simon Cronin talks to an award-winning Greater Manchester exporter.
High-technology manufacturer IPEC is blazing a trail for British business in the Middle East with its success in major markets in the region.
The company, which recently moved to Stockport, began life in Manchester in 1995 as a spin-out from the university with a focus on looking for defects in high-voltage insulation for the electricity supply industry.
Carl Eastham, Business Development Director at IPEC, explains: “What we look for is a phenomenon known as ‘partial discharge’, which is a spark caused by a defect or a problem in electrical installations, which could be underground cables or switchgear inside sub-stations. This spark can slowly damage insulation and eventually it can lead to catastrophic power failure or power outage.
“We’re looking at the high-voltage supply network, so that could be utility networks or it could be private networks that have high power requirements. What we do is make a variety of instruments and systems that detect these defects and give early warning that an asset might fail.”
Unusually for a British manufacturer, everything IPEC supplies is manufactured in the UK and, where possible, is made right here in the North West. The company’s success has been built on combining that strong domestic manufacturing base with a flair for finding new international customers. IPEC’s achievement in expanding into new markets was recognised in December last year when it won the New Markets Award at the Insider International Trade Awards.
Carl says: “Traditionally our products were sold in the UK and then in about 2010 we made quite a large effort to push internationally. Outside of the UK our two main markets are the Middle East and Asia and that’s where we do a lot of our business.
“Our Saudi Arabia market is quite established now but before that we had the usual main hubs of the UAE and Dubai that are really built for international trade. Since then, we’ve stepped into Qatar and neighbouring countries. We appoint distributors locally in each market. Because of the high-tech nature of what we do, we spend a lot of time in the country as well helping our distributors sell.”
By focusing on the high-growth market of the Middle East, IPEC has seen a significant increase in its exports in the last five years. In July 2020, this strategy led to it winning one of its largest ever contracts when it signed £5.3m deal with Saudi Arabia.
IPEC is now a major player in the Middle East with its top market being Saudi Arabia, followed by Qatar and then the United Arab Emirates (both Dubai and Abu Dhabi). Such is the importance of the Middle Eastern market that IPEC has set up a small office in Abu Dhabi, which it hopes will help it get into Oman and Kuwait.
Like many businesses around the world Covid has had an impact on the businesses, but tariff barriers and Brexit have been less of an issue.
“Tariff barriers haven’t been a big issue for us as we don’t have local competition in the Gulf Cooperation Council countries. Most of the competition is from outside the region, so we are on an equal footing,” Carl says.
“The biggest barrier for us has been Covid because our products are quite high tech and for the customers to really get a good understanding of the product we need to be face to face. Brexit hasn’t been as a big an issue for us as our products are made in the UK and we trade outside of Europe. However, the global supply chain has made an impact caused by the shortage of electrical components, which has caused the challenges of longer lead times.”
While Carl acknowledges that the business culture in the Middle East is “massively different” to the UK, he believes British companies can succeed if they take the time to understand the local markets and find the right partners.
“The key to our success has been the local contacts. It‘s one of the first things we prioritise. We employ people who speak the local language, so we have Arabic and Mandarin speakers. We also set up IPEC Middle East, so we are even closer to the customer.
“The distributor that you choose to work with locally has been key for us, to pick the right partner in country to represent you to the end user is really important. The only hindrance we’ve had has been the effect of Covid on travel, but travel to the Middle East is pretty open now and it’s just a case of a PCR test and a piece of a paper.”
IPEC has benefited in the past from Innovate UK funding for product development and has received advice and support from the Department of International Trade (DIT), which has put it in touch with embassies in the UK and Saudi Arabia.
“I think there is enough support out there. I think the only barrier may be in finding that support. Once you do find support it leads onto the next level of support. I think it can be a bit of a confusing picture at first, but I think once a company does make contact with DIT there is quite a lot of support out there with moving into new markets.”
Greater Manchester Chamber of Commerce has also played its part IPEC’s success by helping with export documentation and advice.
Carl adds: “A lot of our customers do require documentation from Greater Manchester Chamber, such as the verification of the origin of the goods, so we do work with the Chamber a lot.
“Along with the overseas embassies and the Department of International Trade, we do see the Chamber as a place to go for advice and support as well, because sometimes when you are moving into new markets you might have a lot of different questions. There are multiple networks you can go down and one of them is the network of Chambers.”
Alongside the Middle East, IPEC’S key market is Asia, which includes the more established economies of China, South Korea, Hong Kong and Taiwan, as well as the growing economies of South-East Asia. Travel to Asia remains difficult though due to ongoing covid restrictions.
“Travel in Asia is still impacted with periods of isolation needed which makes our travel quite difficult as you want to visit a number of countries in the region and that’s not viable if you have to isolate in each one.”
While many British manufacturers have often struggled to compete with cheaper foreign competitors, IPEC has succeeded through a winning formula of high-tech products and after sales support from highly skilled staff.
“We can’t compete on cost with a component. What you need to do is establish the whole package - not only supply the component but the technical knowledge and support. We’ve been around since 1995, so we’ve got a long history of experience in this field. Ultimately by putting the whole package together the customer is satisfied that, although you might not be the most competitive price wise, what they’re getting for their money is improved. It’s a combination of technically innovative products and the support service that goes along with it.”
Looking ahead, Carl says Asia and the Middle East will remain IPEC’s main markets for the next few years, but in the past 18 months to two years it has also seen an expansion in its Africa network. Wherever IPEC exports to in the future, he believes that the personal touch will always be its main selling point.
Carl adds: “The message I always like to get across is that it’s about that local connection. Customers are extremely busy, especially in this type of industry, and the easier you can make it for a customer the better. So instead of an online meeting and multiple phone calls, you get face to face in their sub-station. They’re engineers at the end of the day and they really want to get to work and if you can make their job easier that’s the whole point and you fit in with them.”
If IPEC’S success has inspired you to look for new markets around the world, you can get in touch with the Chamber’s International Trade Team at exportbritain@gmchamber.co.uk to find out how they can help you on your export journey.
Pictured: IPEC equipment being used in the Middle East