Alongside their headquarters in Oldmeldrum, Aberdeenshire, Flowline Specialists has also launched subsidiary businesses in Norway and Dubai, an operating base in Singapore, and a presence in the Netherlands since it started exporting back in 2009. BQ found out how they made it happen.
What does the company do?
Flowline Specialists is an independent company that designs, engineers and manufactures cost-effective solutions for the global oil and gas, subsea and renewable industries. The equipment is used to safely handle, deploy and recover flexible pipes, umbilicals and cables.
Most of the equipment is manufactured in-house and is modular in construction which allows for quick and economic mobilisation by road or container. A team of experienced technicians is available to commission and operate the equipment on and offshore.
How long has the company been exporting?
Flowline Specialists was established in 2001 to primarily service the North Sea marketplace. Until 2009, the firm’s focus had been on the domestic UK market with some overseas activity. CEO Jim Smith has driven expansion in international markets in order to develop the business and reduce the reliance on one geographic area.
What do you currently export, and where to?
Flowline Specialists’ entire range of reel drive systems, tensioners, under rollers, subsea and standard turntables and pallets, winches, shears and hydraulic power packs can be used around the world. The equipment is commissioned and operated by our team of technicians who are experienced in working in both onshore and offshore environments.
Alongside the headquarters in Oldmeldrum, Aberdeenshire, we have subsidiary businesses in Norway and Dubai, an operating base in Singapore and a presence in The Netherlands. These bases help to drive growth and activity in Scandinavia, the Middle East, Asia and Europe respectively.
The countries that we work in each year is dictated by the projects we are contracted to deliver, however work in countries in Scandinavia, Europe, the Middle East, Africa and Asia occurs each year. We have also delivered projects in Russia and recently secured work in Canada. Opportunities in Australia, the Caribbean and other global markets are currently being explored.
What motivated you to start selling overseas, and how long did it take?
It was clear that for the business to grow it had to expand internationally. The products and service we offer can be provided in any overseas market, so exporting was a natural step. Some overseas work was undertaken prior to 2009, but this was driven by approaches from clients. When I joined the firm in 2009, we began concerted sales activity in targeted overseas markets which has led to significant growth in overseas sales.
Exports have increased consistently over the last six financial years and now make up a larger proportion of the firm’s turnover than ever before. In the financial year ended 31 March 2010, turnover sat at £0.85m with exports accounting for 15% of this. During the following five years turnover grew by 643% to stand at £6.36m in the year ending 31 March 2015, exports made up 54.5% of this. Overseas growth has been steady since 2009 with many new markets being entered in this time.
What is the easiest part of exporting?
Knowing that the job is basically the same wherever we are contracted.
And the most challenging part?
Exporting brings many challenges, not least the pressures it can add to how your business operates day-to-day. A job that was only 50 miles down the road is now 500 miles away and involves a lot more logistics than before to deliver – shipping equipment, deploying personnel and arranging their travel and visas for example.
It’s a whole change in mindset, which you don’t necessarily realise at the outset. A little more work is involved in getting things ready for a project and personnel are away longer. These can then impact other projects if not planned properly. The skillset of our office staff has also changed in order to manage travel arrangements for staff and ensuring they have all the correct documentation.
Have language barriers, currency changes, etiquette and culture ever caused you any difficulties? How did you overcome them?
As yet, no difficulties have been encountered, but you learn a lot about different cultures as you export, particularly if you decide to establish subsidiary businesses in country.
We are very lucky in that English is the most common language used worldwide in our areas of business. Many overseas companies employ different nationalities and they tend to converse in English. I have a smattering of several languages – just enough to get by although I should try to improve my language skills.
Did you get any support when you wanted to trade abroad? Who from, and was it helpful?
International expansion has had great support from Scottish Enterprise and Scottish Development International. Flowline Specialists has been part of overseas trade missions that have provided opportunities to explore markets and gain vital insight into them. The firm has been a partner on the SDI pavilion at a number of exhibitions and maintains regular dialogue with the agency. We have received orders for cable deployment as a direct result of exhibiting on the SDI pavilion. There is also a network of Global Scots in most overseas locations who can offer invaluable local advice. Before we set up our operation in Dubai we took reference from various Global Scots in the area for their advice.
We also established a memorandum of understanding with Dutch firm Blue Offshore, who we work in conjunction with on a number of projects and partner with at some exhibitions.
What advice would you give to someone just starting to explore overseas markets?
Set up the best website that you can afford. Monitor where the enquiries and orders originate from and arrange a visit either as part of SDI or on your own. Meet your clients face to face and understand their requirements.
Have belief in your products and the services you provide and remain enthusiastic about them and in what you do. Building a strong team that you have confidence in and ensuring that they are suitably trained is also crucial. Breaking into new markets won’t happen overnight and can take some time, but remaining positive and keeping faith in your business is incredibly important. Keep knocking on doors until they open.
No regrets, however being reliant on people who are not part of your company and do not share your drive and goals can provide disappointments. Try to control your overseas business through your own company as much as possible.
Where next? What markets are you looking into and where do you see the company in 5 years time?
Flowline Specialists continually looks to expand its operations around the world. In 2015, we established a wholly-owned subsidiary business in Dubai in order to better exploit the opportunities that exist in Dubai and the Middle East. The base will also provide an operational hub to enter the Australasian market and grow business levels in Africa.
We aim to grow turnover to £9m by 2020 and exports will be crucial in achieving this. In November 2015, we visited the Canadian MRE conference as part of an SDI trade mission to the country to further explore the market’s potential. A contract for the deployment of subsea cables in Canadian waters in early 2016 has already been secured.
In Europe, our target is to become a primary provider of subsea cable deployment solutions for the marine renewable energy sector which is set to witness significant growth. Our recent experience in deploying the subsea cables for the French SEM-REV marine renewable energy test centre will aid this.
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