It’s a remarkable trading trend. Exports from the North East of England to Belgium soared 393% during 2014, a cash rise of £840m, latest UKTI figures show. Also one year ago Bmi regional airline introduced a regular scheduled service between Newcastle and Brussels.
Coincidence? Hard to tell, but about 60% of passengers using the service are on business. David Laws, chief executive at Newcastle International Airport, describes Bmi’s service as having been well received by the North East.
But to imagine tickets are being snapped up by small businesses in the region might be misleading. Ken Cuthbert, North East regional marketing manager for UKTI trade development, says the trade spike with Belgium is mainly down to 97% automotive, with much of the rest pharma/ medicinal.
“Take out sectors dominated by larger organisations – organic chemicals, pharma, automotive, steel and power generating machinery – and the increase over the year is £2.8m,” he explains. “But this is for the whole SME community, and within ‘smaller’ sectors there are ups and downs.”
Yet one smaller North East company proving Belgium pays is HTL of Cramlington, operating also from Aberdeen, Manchester, Iraq, Singapore – and the Benelux countries. It began with two employees working from, virtually, a double garage in 1994.
Today, thanks partly to Belgium, it’s in a new 65,300sq ft headquarters at Nelson Park Industrial Estate, turns over around £7m, and is excelling at subsea work through its controlled bolting and high pressure hydraulic engineered solutions.
HTL Benelux opened in 2013, HTL having traded with continental firms over many years. Sander Magnin, managing director of HTL-Benelux, tells BQ: “By establishing an ‘own’ company, HTL has shown commitment to the local market, hence positive feedback here.
Customers also benefit from HTL covering exchange rate differences through HTL Benelux trading in euros.” All products carry “excellent” customer support which, Magnin says, differentiates HTL from its competition.
Belgian companies present in the North East include, in Newcastle, Cathie Associates, specialists in offshore pipeline geotechnics and trenching engineering; and, at Redcar, Katoen Natie, a privately owned supplier of logistics and semi-industrial services to various industries and shipping firms.
Cathie Associates also operates from Paris, Hamburg, London and Milan, while Natie employs more than 10,000 people around the world.
What of Belgium itself? Its population may be only about 20% that of Britain but its requirements and offerings are relevant to the North East. Its widely diversified chemicals include plastic and rubber processing, pharmaceutical, biotechnology, cosmetics, soaps, detergents and paints.
It’s keen to share in the UK’s creative media and ICT. State support for clusters in micro-electronics and e-security, broadband technology, and mobile applications makes Belgium a good European springboard.
Belgians love food and drink; see the proliferation of restaurants and food shops in Brussels alone. So opportunities exist in convenience foods, snacks, exotic foods, health and bio products. In healthcare and life science demand is high for products serving an ageing population and growing resort to e-health.
Innovative cost-saving products to speed patient care can find a niche, and Belgium indeed wants its life science research and development involved with Britain’s. Energy sub-sectors - tidal, offshore wind and the nuclear supply chain - draw interest. And hosting headquarters of Nato, the EU and many other international organizations as it does, Belgium is receptive to advanced security and services.
Keen investors in UK service industries, Belgians also want to sell their IT products into banking and insurance here. Interest is mounting also in Smart cities – enter Science Central, Newcastle, perhaps – and innovative and sustainable technologies in public buildings.
The Newcastle-Brussels air link was welcomed in the North East from the outset by P&G, the world’s largest consumer products group, which considers it vital to connecting two of the group’s innovation centres at either end, and offroad vehicle builder Komatsu, which saw it bring its Birtley operation closer to its European HQ.
But people I spoke to in Belgium feel it can also profit small firms, Belgium being partial to family and other small businesses.
Filip Van Kerckhoven, senior trade officer at the British Embassy in Brussels, told BQ “Belgium is open and welcoming to foreign investment, open in a global sense, open through minimal regulation, open in personal communication and open in willingness to trade with companies of any size.”
Smaller businesses may find it particularly welcoming, he says, since Belgium itself has few “flagship companies” but a strong pattern of family and other small businesses.
“Britain’s trading with Belgium is considered very important here, given its history back to the Middle Ages. That China has recently overtaken Benelux – Belgium, Holland and Luxembourg – to take sixth place in Britain’s league table of main trading partners doesn’t reduce Britain’s importance to Belgium.”
Sander Magnin at HTL is equally encouraging. “I think the Belgian market is open to suppliers from abroad, especially when they offer a unique product and support it well. Belgian buyers judge a product offer on merit. But personal interaction is also important.”
Van Kerckhoven cites two plusses for running a European export campaign from Belgium. It’s a crossroads of Europe, bordering France, Germany, Luxembourg and Netherlands, with good transport communication complementing that. Also, popularity of English there
Belgium also has a skilled and productive workforce, and a fascination for new technologies. I found the scarcity of hailable taxis strange but the underground transit system excellent.
Bmi Regional, the UK’s most punctual airline over a nine year period, has made Newcastle its third British airport linking to Brussels, with 16 flights weekly. Though that’s 144 miles further than London, the 85minute flight is only 15 minutes longer than to Heathrow.
Its 49 seat Embaer 145 aircraft, during its first year until March, operated a double daily direct service. Now it has stepped up daily weekday flights from two to three, giving Newcastle more options also to Europe, the USA and Africa. While ticket prices vary, they can cost as little as £65 one way if booked sufficiently in advance.
As you’d expect of a capital, Brussels has a wide variety of hotels and tariffs thereof. I stayed at the Aloft Brussels, part of an American chain established also in London and Liverpool, and whose major asset apart from comfort is its proximity to various European institutions.
Another reason to test Belgian markets presently is that sterling is now worth 15% more against the euro than two years ago. That could save EU-bound travelers around £66 a trip on value of their spending money, the travel money business Centrip says. So what prospects for the smaller firms?
Without some innovation, breaking into brewery and confectionery might be tough, given strengths of the home products. But amid the stepped gables and ornate towers of Brussels stand some well known and thriving retail businesses started by British businessmen taking their chance in a previous century.
Sander Magnin at HTL-Benelux suggests: “Just sending a quote by email and waiting for an order will not – in most cases – establish a long-term business relationship. It’s important to visit the customer yourself or have a local dealer/representative look after your business before and after a deal is made. It’s also important to be at trade shows and similar events.”
Also: “Inviting a customer over to your premises in the UK is something well appreciated – especially by larger companies.”
But always remember: Belgium has a tense linguistic split: a Flemish speaking part (with 60% of the 10.6m population) and a French speaking (Walloon) part, so there’s no such trade convenience as “one approach fits all” in labelling.
Don’t quote either Deutsche Bank’s conclusion that Flanders could be better off breaking away – especially as that report suggests likewise about Scotland within the UK. The latter conclusion, after all, arose before oil prices plunged and Russian aircraft began probing UK territorial integrity, taunting Scotnats’ economic and defence suppositions.
Things change in Belgium too. Filip Van Kerckhoven even suggests first time business hunters shouldn’t, when in Flanders and Brussels, try to speak or write in the French they may have learned at school 20 years before.
“No offence meant,” he stresses. “But if you speak French somewhere that prefers not to use it you may be off to a sticky start, similarly if you try Dutch in a mainly French-speaking area. English generally bridges things nicely.”