Raising the game on exports
Scotland has always had a prosperous exporting history and, in more recent years, it has been overtaking the rest of the UK in terms of seeing increasing demand from overseas.
HM Revenue and Customs’ 2017 export data reported that overseas sales of the country’s goods were up 19 per cent to nearly £29 billion, resulting in a surplus. By contrast, the whole of the UK’S exports rose by 13 per cent.
But Scotland has become famous across the world for its food and drink. Take whisky, for example. The value of exports grew by more than £500 million last year to £4.36bn – a 9 per cent rise.
More encouraging is that demand is coming from all over the globe. In Latvia, the sales of Scottish whisky grew by a staggering 105 per cent to £120m, while outside of the EU, exports to Singapore jumped 29 per cent in 2017 making them our third largest trading destination.
But elsewhere we recently found that the overall number of Scottish firms exporting is actually falling. Bank of Scotland’s latest Business in Britain report found that the number of firms exporting fell to 29 per cent, down eight percentage points from 37 per cent in June 2017. While this suggests that those that are still exporting are doing very well indeed, we believe more firms could succeed with the right support.
So how can Scottish firms make the most of international demand? If you’re exploring a new destination, understanding that target market is key. Bank of Scotland’s International Trade Portal, for example, is a free service that provides insight into markets across the globe.
It is designed to help firms identify exporting destinations and prioritise the best overseas opportunities, with specific advice on how to avoid the potential pitfalls that come with trading in new countries.
It is also vital to make sure you’re protected financially. Trade finance products can help businesses manage the risk that can come with dealing with international suppliers and customers.
Inver House Distiller, one of Scotland’s leading single malt whisky producers, is a great example of how to expand internationally. The business had invested heavily in storage facilities and wanted to improve its margins before exploring new markets overseas. To help it do so, the firm secured a £45m asset-based lending facility, which gave it the headroom it needed to support overseas expansion in India, Kazakhstan and Poland.
This is just one firm out of thousands that sought the help that was on hand, and other businesses should know that support is available if they’re wanting to export for the first time. Considering the value of the Made in Scotland label overseas, we need to make sure we’re making the most of it, so that Scottish businesses continue to prosper on the international stage. ● David Weatherhead, head of SME trade for global transaction banking at Bank of Scotland