5 December 1997

MAKERS KEEN TO GO ON THE EXPORT TRAIL

Farmers overseas are increasingly looking to UK

manufacturers for the best in farm machinery ideas,

technology and quality, as Peter Hill reports

IN MANY a far flung field, British farmers on overseas study tours will come across familiar names on familiar machines. Stanhay precision seeders in Saudi Arabia; Reekie potato equipment in South Africa; Teagle bale shredders in Japan; Househam self-propelled sprayers in Australia.

And many more besides as a growing number of UK companies broaden their horizons and join manufacturers with an established export record in seeking new markets across the English Channel, the North Sea, the Atlantic and beyond.

Hitherto, the tendency has been to accept overseas enquiries as a bit of a bonus with little effort from many companies to actively encourage them. Now, with farm machinery being a more global business and a home market declining in size and becoming ever more competitive, more implement manufacturers are hitting the exports trail.

"Exports are crucial to our future," states Gordon Skea of Forfar-based Reekie Manufacturing. "Apart from helping to grow the business by increasing volumes, it reduces our dependency on a volatile home market."

Rob Willey of Househam Sprayers in Lincolnshire takes a similar view.

"We have got to export; the UK is a limited and very competitive market for self-propelled sprayers. Besides, there is big potential for the sort of equipment we produce, especially in countries where agriculture is becoming more sophisticated," he says.

For others, its a recognition that, with the right product, there is simply good business to be had.

"Weve been actively exporting since the early 1960s and its become part of the culture of our company," says Mike Heywood of Stanhay-Webb.

Should UK farmers be bothered about the success or otherwise of British companies exporting farm machinery, apart from, perhaps, the odd twinge of nationalistic pride at the contribution to Great Britain PLCs coffers?

Yes, say those who do it. With production costs dependent upon manufacturing volumes, anything that sustains throughput and keeps UK manufacturers in competitive shape helps keep prices in check.

"Potato harvesters are relatively cheaper now than they were thanks to the more effective competition that our Continental colleagues face from domestic manufacturers," argues Gordon Skea. "Without that competition, prices would rise."

Filter down

Technical improvements and new ideas can also filter down to UK-bought products, suggests Stanhays Mike Heywood, from working in different conditions or using different techniques overseas.

"Im sure our overseas activities contribute beneficially to the way we design and build our products, and UK buyers get the benefit of that," he says.

For some, the perceived barriers of geography and language are enough to discourage any attempt to step foot beyond the UKs shores. Not so at Stanhay.

"We dont regard anywhere in the world being more difficult to sell into than anywhere else," comments Mike Heywood. "Some markets just need a different approach, thats all. As long as you feel comfortable about selling abroad and are prepared to meet local requirements, then it can be very successful."

For John Teagle, of Cornwall-based Teagle Machinery, actively pursuing export sales is a relatively new – and so far rewarding – experience.

"Previously, we regarded exporting as a bit of a perk on top of home sales," he admits. "But now weve realised the potential and gone for it, it is definitely worth the effort. But you do have to be committed and prepared to put in a lot of hard graft."

In addition to commercial pressures to find new customers outside the home market, the new confidence among fledgling farm machinery exporters partly comes from a realisation that, when it comes to innovation and build quality, UK manufacturers can more than match overseas competitors.

"I think we have been guilty of under-estimating the quality of our products, although it is also true to say we have made great strides in improving quality in recent years," says Reekies Gordon Skea.

John Teagle agrees: "As an industry, we are certainly producing better products now than, say, 20 years ago. In our case, it has been a conscious policy to raise quality to meet Continental competition head on. We now aim to make machines that farmers are proud to own. They cost a little more and you have to put in more effort to sell them as a result, but the products are better value for money and you lay good foundations for sales in the long term."

The challenge, reckons Gordon Skea, is to meet expectations for parts and service back-up when, being on an island, Britain remains at a disadvantage to companies on the European mainland.

"It simply takes longer to do business and get parts to customers at reasonable cost," he emphasises. "But it is something British manufacturers have to address and get right if we are to maintain our new position in the market."

Reekies solution has been to join a Dutch-based machinery group that already holds a strong position in the potato sector.

"Becoming part of Netagco, which owns Miedema, Hassia, Rumptstad and Structural, gives us a Continental base and new distribution opportunities," explains Mr Skea.

Househams route has been to extend to Continental suppliers the original basis of its UK business – producing self-propelled vehicle chassis for others to complete and sell.

"Although we are now selling complete sprayers in the UK, our core expertise lies in the design and construction of the power unit," explains Rob Willey. "That is what we supply our overseas distributors who then add booms, tanks and spray equipment to suit local requirements."

L W Househam has shipped more than a dozen such vehicles to Japan and smaller numbers to sprayer companies in France and Belgium. Closest links, though, have been forged with Germanys Rau. Rob Willey is optimistic about the sales potential, especially in east European states where Rau has the credibility to pursue new business.

For others, the inclination is to "go it alone", whether in the pursuit of new markets or the servicing of existing ones.

"I do talk to other UK companies, exchange leads and contacts and occasionally share a shipping container," says John Teagle. "But, otherwise, its all down to our own efforts."

Most UK exporters work in this way in marked contrast to a recent agreement between four German family-owned companies – Krone, Amazone, Grimme and Lemken – to tackle together the burgeoning eastern European markets.

United Front

The attraction of working together, explains Krones Wilhelm Voss, is that sales, administration and exhibition resources and costs can be shared instead of duplicated. And new dealers – as well as large farms and state purchasers – can be offered an attractive package of implements rather than just individual machines.

There is some evidence of UK manufacturers being prepared to present a united front, though. The British potato equipment manufacturers grouping at the SIMA show in France, for example, has proved a successful strategy in emphasising the industrys prominence in this sector. Similarly, the AEA/MAFF-run British pavilion at this years Hamilton Fieldays in New Zealand provided a blueprint for future such efforts.

As the trade organisation for UK-based machinery companies, the AEA gets involved in a number of activities aimed at supporting export efforts. Outward missions, usually run with Department of Trade and Industry financial support, provide a useful introduction, maintains AEA director general Jake Vowles.

"It must be helpful for inexperienced exporters to travel with regulars to overseas markets," he suggests.

Although he accepts that government backing for export initiatives will never satisfy demand, Jake Vowles reckons UK manufacturers have access to reasonable support in the way of contributions towards travel and exhibition costs – even though companies can apply for such support only so many times.

"Last year, we handled more than £209,000 of DTi funds in support of the agricultural and groundcare machinery industries, and did a lot more besides with other organisations," he points out.

Other AEA export support activity includes fact-finding visits to potential new markets to find out how UK manufacturers might meet equipment needs – Australia, NZ, the US and Indonesia have been among recent destinations – and organising visits to UK shows and manufacturers by overseas distributors and journalists.

Ultimately, though, cracking new export markets means shipping machines for local demonstration. And thats expensive.n

Another stone-clod separator takes shape in the assembly area at Reekies Forfar factory.

Stanhay-Webb has a long-established export record but new products open up new markets. This Salvo 650 large bean seeder working in Mexico is from one of three consignments sent in as many months to the companys new importer.

Export case study 1

Reekie Manufacturing, Forfar, Angus

Export experience: 10 years+

Products: Potato harvesters, planters, stone-clod separators.

Main markets: France, Scandinavian countries, Netherlands, South Africa, Poland, Czech. Developing in Middle East, South America, Australia, New Zealand.

Export sales: 35-40%, aiming for 60-70%.

Comment: Has put a lot of effort into selling the "UK method" of stone-clod separation, planting and harvesting in recent years; now yielding particular success in France, and with harvesters in Netherlands. Reekie has joined the Netherlands-based Netagco group to gain a Continental base and distribution.

Export case study 2

Stanhay-Webb, Exning, Newmarket, Suffolk

Export experience: Since 1960.

Products: Mainly Singulaire vegetable and Salvo 650 large seed pneumatic drills.

Main markets: USA, France, Germany, Denmark Spain, Czech, Saudi Arabia, Australia, South Africa, Mexico.

Export sales: 65%; aiming for 80% by 2000.

Comment: Stanhay-Webb has a four-strong export team and directors Mike Heywood and Allan Marshall spend more than half their time visiting established and potential export markets. Stanhay has recently sent its third container load of drills in as many months to its new importer in Mexico.

Britains farm machinery exports and imports – £m


199419951996change % change

94-96 94-96

Exports 233.4277.7303.570.130.0%

Imports 405.0467.9484.379.319.6%

Balance-171.6 -190.2 -180.8

NB: Export sales of new tractors and engines for tractors were worth £1088m in 1996, creating a favourable overall balance of trade and reinforcing the UK agricultural engineering industrys position as a leading net exporter.

Source: AEA / HM Customs & Excise. Includes official and industry figures.

Being prepared to go out and demonstrate products is the only way to win new business – a Teagle Tomahawk straw shredder is put through its paces in Latvia.

Drawing on existing expertise but being prepared to build one-offs helps L W Househams export prospects. This high clearance wide-track sprayer, shown alongside a European-spec version, is destined for Australia.

Export case study 3

Teagle Machinery, Blackwater, Truro, Cornwall

Export experience: Has put a lot of effort into export sales over the past two years.

Products: Tomahawk round bale shredder/dispenser and some fertiliser broadcasters.

Main markets: USA, most mainland Europe and Scandinavian countries, Japan, South Africa.

Export sales: 50% Tomahawk sales now overseas.

Comment: Hard graft and a lot of travelling is paying off for John Teagle who concentrates wholly on exports. Sales to North America have been particularly successful.

Export case study 4

L W Househam, Leadenham, Lincs

Export experience: Three to four years.

Products: Self-propelled sprayers, complete, boomless or chassis/cab only.

Main markets: Japan, Continental Europe.

Export sales: 30% expected to rise substantially.

Comment: Export sales mainly generated from prompt response to overseas enquiries and willingness to adapt basic design to local requirements. Supply deal with Rau holds promise of sales in sophisticated German and potentially high volume eastern Europe markets. First machine for Australia shipped recently.

Britains farm machinery exports – destinations


Country Share of UK

exports 96

Eire16.6%

France14.4%

USA9.1%

Germany 7.9%

Netherlands5.6%

Denmark 3.2%

Belgium and

Luxembourg2.9%

Sweden 2.8%

Australia2.6%

South Africa2.1%

Norway 1.9%

New Zealand1.9%

India1.7%

Spain1.6%

Japan1.5%

Poland1.5%

Czech1.3%

Syria1.1%

Canada 1.0%

Hungary 1.0%

Italy1.0%

Austria 1.0%

Source: AEA / HM Customs & Excise. Based on official export figures.