17/07/23

Key Lessons For Export Success

Recently our Managing Director, Derek Carr had the opportunity to spend some to time being interviewed by Scott Wallis from the podcast WTA Freight Club part of the WTA group. The interview covered a range of topics looking to help new businesses to begin their journey as exporters.

We are already active members of the Exporting Champions initiative as part of the Midlands Engine where Derek regularly presents and supports businesses to follow in our footsteps.

It was a great interview and uncovered a number of valuable tips for businesses. To ensure that this information will be available for the future we have transcribed the podcast and also uploaded our own version to Youtube which you can watch here.

To hear more from the WTA Freight Club Podcast you can visit https://uk-podcasts.co.uk/podcast/wta-freight-club and also visit WTA Group directly by visiting here: Freight Forwarding Experts – wta group

We hope you enjoy the interview, and if you have further questions, please feel free to reach out to us via email sales@addfield.com    

So over to Scott and Derek

Scott: Hello and welcome to another edition of Freight Club, a WTA Group podcast. Today we’re taking lessons from Addfield, a British SME who are world leading manufacturers of incinerators Addfield, began their exporting journey in 2012, and they now export to a staggering 140 countries worldwide, making managing director Derek Carr ideally placed to give advice for businesses exporting for the first time and established exporters looking to expand their portfolio.

And Derek joins me on the podcast today. Brilliant and so thanks very much for joining me on the podcast today. Derek So if you could just start then by just explaining Addfield and your products and what your role at the company is?

Derek: Yeah, of course. So the business is called Addfield Environmental Systems Ltd and I am the Managing Director of AES and Addfield Projects Ltd. So a base in Staffordshire and we design manufacture and export goods to 145 countries around the world.

Scott: Yeah. So it’s like incinerators and things as is the.

Derek: Yeah, that’s it. So we’re going back to the very beginning. We was very much a British manufacturer for British farmers when they would have fallen stock onsite. There’s the risk of vermin spread of diseases.

So they would manage the waste onsite. It started for British farmers. It got to a point in the last recession where we realized that we were putting all of our eggs in one basket, which generates risk. So we started working more with it used to be called UKTI, and then its, the Department of International Trade and the Department for Business and Trade so its changed its name a few times, but really to actually have an export plan to say, okay, who is Addfield?

What’s our USP? Which markets may be interested and get us focused? And so, not all have all our eggs in one basket. So the journey in exporting world really started in 2012.

Scott: Yes. So talk me through that then. So you started looking at exports in 2012. How has it moved since then?

Derek: I think at the very beginning it was very much, as I said, British manfuacturers, British farmers. Our telephone numbers on the website, which was 01543, is very much thinking of small business and it wasn’t internationalised, so it was all .co.uk.

It was really looking at the business as a whole. We went through a big branding exercise. So even though the name hasn’t changed on every van or marketing material, it will say it will just say Addfield Incinerate Cremate. Right. So it says exactly what we are. Get away from all the fluffy stuff. That that’s what we do we build incinerators and cremators and then look to internationalise the business.

So change to a dot com, changed to a +44 making sure that people felt like it was a bigger company. Even if at the beginning there was. I remember when I joined the business in 2010, there was three of us in a two and a half thousand square foot factory. So we we knew where we wanted to be and we knew that we wanted to give the market the best products on the market.

I’d love to say when we did our export strategy, we went to the neighboring countries, Europe, where obviously before Brexit there was trade agreements in place which made it a lot easier. But actually our first large one, which turned a bit of a corner for us, which allowed us to reinvest, was everything that was happening in Libya with Gadhafi and aid agencies being able to support hospitals with their medical waste.

So that was our first large export one. And it was a bit of a journey because we we had it was a quarter of a million time contracts on one contract then. And at that time, our turnover was only around 600,000. So it was a big, big project for us, which we had a small team. We had to project manage and bring in other contractors

To help us build it. that this was equated to of the top my head. It was about 6 40ft containers worth of goods, so it was actually understanding who we’re going to use, how we’re going to get there, how we’re going to get it insured, what inco terms we was going to use. So it was a whole new journey for Addfield. Yeah. So it was a bit of a rollercoaster at the beginning.

I know that there was a few lessons learned that I looked at. Like letter of credit said, Never worked with a letter of credit before and feeling you had to educate yourself. It felt like there was no one really that to speak to. But once the turnover increased and once we started to do more, the lessons learned and the systems in place our SOP’s in place, policies in place.

We found then we could find where our weaknesses are. Look to recruit people to to fill those gaps.

Scott: Yeah, Addfield is a great example really to talk to about exporting because or in the recent history you’ve kind of gone from from that introductory stage that you’ve spoken about there to becoming sort of an established, a very well-established exporter that’s, you know, distributing to 140 countries.

So I suppose the message here, the lesson for for business leaders could be that the opportunities in exporting can lie in perhaps the most least expected areas.

Derek: No you are totally right, yeah, I think you have to be opportunistic and look at what’s happening around the world and saying, okay, well can you bring added value? We did a project for UNICEF, which was in Togo and the commissioning engneers.

Imagine they are very used to Europe at this time. So put bins outside. It was taken away. You go to the hospital, you find bandages taken away. They are put in separate bins, everything is coded where the went to this facility that was in Togo, where they had all the medical waste that was near the hospital in an open pit. Animals were living off the land.

So where all this medical waste was, the people were living off the animals, so they were using the milk from the goats where the goats were eating from this land. And that whole circular economy was just wrong. It didn’t mean they were wrong. It was just that whole education of how you manage waste is different. So it allowed us to look into, okay, what do we want to do?

We just want to sell as an incinerator or do we want to sell the idea of a solution? So it then came into saying, okay, I don’t want to just manufacture them put them on a boat and allow the customer to have them plug and play, but it was really that we go in there and say, okay, this is why you have these products to prevent this from happening. This is your risk.

This is how you would turn that into a solution and we’ll stop this reoccurring. So I think this is the one I feel that Addfield is quite special. I go to many events and a lot of people are involved in export would say if it’s I’m going to say food and beverages, but we can talk about any market and say that there are so many great stories about whiskey at the moment, which is great and it’s really helping the British economy, but you normally find it won’t sell.

It to the end user. You sell it to supermarkets, get within the beer community or the pub. So wherever you are going to sell it to where with the incinerates Because you’re getting straight to the problem and understanding where are these machines really bringing value? And I think this is where it brings us in quite grounded as a business instead of like just selling the machines and patting ourselves on the back, it’s actually feeding back to guys who were doing all the fabrication, doing work in the factory and actually appreciating you’re actually building these machines and making real-life differences in country and people are reaping those rewards.

With managing waste correctly.

Scott: Yeah, I thought it was really interesting what you said about when you sort of said you’re kind of not just selling the incinerator, you’re selling a solution. And I think the the lesson here is absolutely around, you know, really focusing in on what the issues are for the buyer and to have success at exporting, you know, finding a solution that fits that that pain point or that problem that they’re having.

I just wanted to ask you, though, about because you’ve said about how basically in 2012 was when the exporting began and now you’re you’re exporting to over 140 countries, which is a phenomenal, phenomenal scaling by any standard. You know, how is how has that been achieved in such a short space of time to have such a widespread export portfolio in such a short time.

Derek: No, great question.Sometimes go to these events and I sit back and to think of that journey and how fast it was the right thing to take on board from this podcast is one, having the right type of support and the people around you. So they always say the difference between a manager and a leader. I’ve always seen myself more as being a leader instead of someone micromanaging.

So a lot of the guys that’ve been with us since the very beginning are still with us today, moving up the ranks. So you filled all of those lessons learned being stored in the business, keeping an open relationship with the Department of International Trade or DBT. So you do get to bounce ideas. I’m not going to say that they have all the answers because they would just generically know about international trade, but probably not about incinerators.

Don’t think they’ve got a magic wand and they will do everything for you. You have to do that journey yourself as well. But also not being scared of it. I think often you will make mistakes. I’m not going to sit here and say, as I said about the DBT, there isn’t a magic wand and you’ve just got to have a plan, maybe go for the low dangling fruit in the beginning.

So if it’s the fact that you want to only work in GBP and the euro go to the countries that are going to be able to trade in those markets, If you if you scared of looking at international trade and you’re thinking of inco terms instead of just worrying about it, speak to competent logistic companies, pick two or three that best suits your business and only offer them.

Don’t go and try and be everything to everyone. Don’t make it so much the scary burden and just make little bite size each stage and think you might enjoy it. I have. It’s been a great experience and a lot of our distributors now I would regard as friends.

Scott: Yeah absolutely This is some great really good stuff There and lessons for certainly people kind of starting their export journey which you know, so many SMEs are.

I was hoping that if we could make the conversation for this, the second half to, to talk more about the challenges that you now have as kind of an established exporter?

Derek: Probably the biggest issue that we’ve got at the moment, I feel, will be whenever you go to the seminars, is having the right people to fill positions, all the jobs.

That’s the probably the biggest problem that we have. There’s lots of job applications out there. People don’t want them and that really concerns me. Definitely Brexit. Now we had a lot of the European community that would fill these jobs, whether it was for British farmers or it was drivers. Yeah, there’s so many jobs I’d love to be able to offer to people, but everyone just wants a nine to five Monday to Friday.

So that weekends is a no-go for people now. And so we’ve looked to get sponsorship from the UK government, which we pay for, to bring people over from the likes of Nigeria, Bangladesh, Pakistan to actually have these guys working in our factories for a period of two, three years. I’d love to see the British government doing more to support businesses.

If we can’t fill those positions, they should allow us then to make it easier to bring people into the country to fill those positions. If you’re going to say my biggest headache at the moment is recruitment and then the larger projects. The guys at UK Export Finance are brilliant. However, to get some of the more problematic jobs which are here of export UK export finance is that we don’t want to lose any jobs, any orders that should be coming into the kingdom.

But there’s so much of a due diligence process and there’s certain countries say the likes of Egypt, which have got their currency locked at the moment, it makes it difficult to get some projects over the line. So yeah, really trying to to see how we can put some energy into those more difficult countries and look at the recruitment Brexit.

I feel like we have gone past that now there’s obviously new trade agreement that’s been put in place for Australia and New Zealand, we just installed a large incinerator for a mining facility in Papua New Guinea, but that was sold through our Australian distributor. So I mean these trade agreements really energises him to say I’ve got some great case studies.

I can do more with these because they’ve installed they’ve commission, the customer loves it the case studies back. These trade agreements really help for him to sell more. Yeah.

Scott: What is your advice for for finding new distributors then in a particular region because that that seems that sounds like a you know, a key ingredient on your supply chain.

Getting to the end buyer. What what sort of things do you look for when you’re trying to find new distributors in new parts of the world that you’re perhaps exporting to for the first time?

Derek: I think that communication is the big one. So straight away that there’s no point going to somebody. And saying I’ve got a great product and giving them a leaflet and saying, look at this great products you’ve got to believe it as well.

So if people start doing their due diligence on you and so they’re going to look at your website, look at your social media pages, what type of culture are you building within the business, and then actually get on the plane and go to some of these exhibitions. So if you believe in your product that much, speak to the DBT, to all those other groups where you can get grant funding for, see if you can get any support with the grants jump on a plane, have a look at the exhibitor list because it would already be on their portals, see if there’s any synergy in any of those.

Are companies that you work with. And if there’s a gap in their portfolio of goods arrange a meeting with them in getting in front of somebody is still the best way of doing business I know COVID made it difficult, but I feel that now there’s a window of opportunity that people want to travel, people want to shake hands, see the whites of people’s eyes.

So have a look at the best exhibitions that best suit you. Jump on a plane, even if it’s the first one, even if you don’t take a stand and then after that when you’ve got the confidence in going and networking. And that’s key thing. If you’re not used to networking, go to networking events, now every opportunity, go on your own.

Because I feel like if you do it as part of a team, you’re always it’s great to bounce off each other, but you find that somebody else takes control of the meeting if you go to network events on your own it’s more like speed dating. It’s more I that in you more have to sell yourself. So get an elevator pitch. Try building your confidence up so if you can meet the customer’s needs and then you’ve got a great product, but stop wasting time, get on that plane and scream about it and show that passion.

Scott: You mentioned slightly earlier in the answer about about the free trade deal with Australia. You know, we’ve we’ve also the UK has signed on with the CPTPP, which is a group in a group of countries in the Indo-Pacific region. You know, there’s quite a lot of free trade agreements bubbling away. They’re in negotiations with India. What sort of Addfield’s thoughts towards those are you looking at?

Those with real optimism and seeing, seeing which countries trade deals are being agreed with and you’re going to perhaps push for more sales in those particular countries?

Scott: Yeah, definitely. So there are obviously the ones Australia that they’re brilliant that will generate more sales for us organically. I feel like we’ve got the right partners in place, so I feel that’s a big tick, gives them an extra bit of energy to get going.

But I think certain markets. So obviously the agreement now with Chile and Mexico and places like that we do have a lot of work in Chile and we should be doing a lot more work in Mexico. So Mexico is one in the top five pig producers in the world. We build animal byproducts, incinerators. We hardly sell any there. The feedback was was always about the tax and duties contract when it got into country where now by the time that the agreement becomes live, which I believe it’s July.

Yeah, that encourages us to jump on the plane and actually get in front of our distributors and actually understand with the DBT see what opportunity is, are they the right partners for us and then put an action plan. This is how we want to make our products seen in Mexico where we go to an exhibition or go to some agricultural trade magazines or whatever it is.

It’s putting a bit of energy in that type of market. The others areas. So we’re seeing a big growth in the US. So it’s really looking at markets there. Where there is trade agreements there, but not on the whole US. So there’s agreements with certain states in the U.S. where they can actually look, they might actually see some opportunity for setting up a distribution there.

We export to that to that place and then that becomes a distribution hub for machines or even if it’s the fact of sending the machines out 75% complete and 25% is done in country. So we’re still generating jobs in the US market. It’s looking at those opportunities and saying, how might we make this grow? So this year alone we should say 50% of our turnover is probably going to be the US. So we have to look.

Scott: That’s two really interesting points just at the end there about different ways round sort of getting into the U.S. market. I think a reasonably common pain point that you will have had that it’d be interesting to get your insight on is around sort of incinerators by their nature are quite difficult to manage logistically.

You’ve kind of alluded to that you know, much earlier. What is your advice for other businesses that have that concern? They but they perhaps have a big product that they’re very proud of, but they’re just thinking, oh, it’s just going to be a nightmare to to move. Well, how do you get around that particular hurdle so effectively?

Derek: So within AES it’s more a production line they build type 250 incinerators and cremators a year, where Addfield Projects it’s really looking at a customer’s problem.

Then every machine will be slightly different. But we would look and look at it and these are ina design order. So that design order would then makes us look at what is the waste type, who is the client and how are we going to get the waste into the machine? How are they going to operate how are they’re going to maintain it if we can build it and it fits legislation.

Brilliant. Okay. How do we get there? So there’s two thought processes going to happen is, one, can it get on a boat to can the the country that’s taking the goods on board except the weight have to get right cranes on site. So we had a project that was in the Ascension Island, which obviously is a very remote island.

There was about 800 population, but they only have capacity for 20 tonne or 40 tonne cranes. So that was real limited what we could put in each container. So it meant that we need to do more site work with assembly than what we would normally do on another job because we knew that it was brought up in our design, it was brought up in our risks. It allowed us to say, okay, yeah, it’s going to be more headache, but headaches are opportunities.

If you have an inquiry that comes in, in the morning, you’ll probably find all of your competitors have had the same inquiry. So what are they going to choose you above everyone else? A lot of people employ salespeople, but if you become the sales expert and actually understand the barriers and you give them a solution, they won’t look anywhere else.

So the scenario is where we will actually build certain things in country and we will project manage it. Because that’s the only way that we can get there. But if no one else is going to do it. Yes, it does give headaches. We we’ve got a large waste-to-energy system that’s in the factory at the moment that’s got to be for clinical waste.

And its going to generate its own electrical power. It’s going to generate superheated steam to to clean the bins and superheated steam to go to steam engine to generate electrical power. It’s going to be off the grid. So it wont need to rely on a grid connection. It can be self-reliant, but to get that made on time and making sure that it’s not going to flood my factory and sit there for three months because a component isn’t going to be ready on time.

There is a lot of planning that needs to go in there, So it’s understanding within your team you might need a different skill set. So that’s why we split the businesses So the one’s very project minded with project managers where AES is very much building the same products all the time.

Scott: Yeah, it’s been really interesting. Hearing you is kind of the sort of pardon the logistics pun, but the sort of outside the box solutions that you’ve that you’ve come up with to get around problems and find solutions for end buyers.

It’s been really great to chat with you, Derek. Thanks for your time. Just my final question, a final question, just a bit of a cheery one, I suppose. I have heard this from a lot of people I’ve spoken to that have been doing a lot of exporting. It sounds like it’s just above all else, really good fun and really enjoyable to do.

Would you agree with that?

Derek: Yes. So don’t tell my wife it’s that when i’m jumping on the plane and obviously I’m going there for work. And then on the evening and having a few drinks with people who are now called friends it is fun it is hard. It is tiring, definitely at the beginning you see a lot everyday is a fight but you believe in your products.

You believe on what you’re going to bring added value, but if you don’t enjoy it, you’re never going to enjoy it. I feel like being able to be on that plane and being able to say I’m going to smash this. I would. I’m going to go down and come away with a sale I’m going to come away with a distributor and have that positive energy before you jump on that plane.

As I said, it’s with the managers and leaders. If it’s the fact that you show that you’ve got great product, people follow you there’s that old saying isn’t there, if you build it they will come and I think that’s that’s something to to take away to have fun believing you products have a strong USP and shout about it let the world know.

Scott: Great advice. This has been really interesting. Derek, I’ve thoroughly enjoyed chatting to you today. Thanks very much for joining me on the podcast.

Derek: No worries Scott thank you for inviting me.

Scott: Really appreciated Derek taking the time to speak to me on the WTA Group podcast and I thought it’d be worth rounding up his key takeaways for businesses before we wrap up the podcast today.

Firstly, he said that if you’ve not begun your exporting journey, consider internationalizing your business before you do steps like giving it a global phone number and a dot com website address a nice website with up to date relevant content can all give your business an international appeal. The second key point for new exports is centered around selling a solution to a problem, not just a product.

To really ensure you strike a chord with international buyers. For more established exporters, Derek suggested thinking outside the box to solve recruitment issues. Look at sponsorships, although he admitted that does cost but could have profoundly positive impacts on your operational capacity. Asking for government support is another solution to the recruitment issue for finding distributors, Derek said. Don’t be afraid to go to trade shows around the world, but crucially, research the attendees beforehand and set up meetings.

He also made the point that you need to make sure your business’s digital shop window is up to scratch. Your website and social media pages should be full of content, positioning you as industry experts and show off a positive culture with these things in place, distributors you’ve spoken to will feel confident in your credibility. And finally, he said, Think creatively when problem solving a headache is an opportunity I believe was Derek’s mantra.

Using the example of the US market where the UK only has unofficial trade deals with a handful of states and protectionist policy is widespread, Therefore, Addfields best route into the US market has been targeting those states and assembling 25% of the machine in the country. Derek said that I think half their turnover now comes from the US market.

Lots of great advice then for businesses at all stages of their exporting journey? Thanks again to Derek for joining me and I’ll see you next time.