Engineering news
Twice as many British engineering and manufacturing companies could see most of their revenues coming from overseas at the end of the decade, according to new research.
The research, by HSBC, found that the number of manufacturers who expect the majority of their turnover to come from international trade is set to double by 2021, from around 10% now to 20%.
Street Crane Company, the Derbyshire manufacturer of large industrial cranes and hoists, already exports all over the world, with 70% of its £25 million turnover coming from abroad.
Andrew Pimblett, managing director, said Street Crane had had to develop a new strategy for growth in the 1990s. “We had hit a glass ceiling in the UK,” he recalls. “The new strategy was to sell crane components to other independent crane makers around the world.” The company now has 63 partners worldwide.
Having spent some 15 years trying to establish itself in the Indian market, Street Crane now has a partnership with Chennai's K2 Cranes, in which the Indian firm distributes high-end Street Crane product featuring both companies' brands. K2 could well become Street Crane's biggest customer within the next year, Pimblett says. “There are simply more sophisticated customers for cranes in India than there were 10 or 15 years ago, and of course the market is growing like mad.
“Having worked with K2 for two years, the rate of growth is quite astonishing. They are not the biggest customer yet but if we project forward even a year they could well be the biggest.”
As well as a focus on export markets, Street Crane has invested heavily in R&D – £1million a year – and worked to develop its own component selection and design software. As part of the company's partnership with K2, engineers from the Indian firm, which exclusively distributes Street Crane's products, will get the chance to learn about areas such as crane design from their British counterparts.
Pimblett said: “I've been in the crane industry 40 years, and I can remember when the UK market for bridge cranes or factory cranes was 3,400 units a year; it's now less than 1,000. Well, India is several tens of thousands. The market for our product is now Asia, places like India and China and a lot of the developing markets.
“To be really successful in an export market you've got to find a sector or a niche where you can co-operate with the people locally. Where we've been very successful is effectively coming up with a strategy where the crane is designed in the UK, probably about 60% of the value is in UK components, but the 40% of fabricated crane structure is done locally.
“That's really what makes us competitive.”