North East export future is pointing to the Americas

The recent drop in exports from the North East served as a timely reminder of the importance to continually target new markets

Bogota, Columbia
Bogota, Columbia

Exports from the region in the first three months of 2013 were valued at £3.141bn, which when taken over a 12-month period, represents a 4.1% fall compared to 2012.

Although seen as blip rather than the start of a continued downturn, the figures demonstrate the importance of sustained international trade to the region’s economy.

Caroline Lofthouse, business development manager at Durham-based business development organisation NOF Energy, says: “Exporting to multiple markets is essential for the region’s economy.”

“We work closely with our members who are not only working in the eurozone, but emerging markets such as Brazil, India and also Colombia.”

NOF Energy, in partnership with the UK embassy in Bogota, recently welcomed a delegation from Ecopetrol, Colombia’s largest company and the 25th largest oil and gas company in the world, to the North East as the company looks to expand its supply chain.

Rafael Guzman, technical and development vice-president of Ecopetrol said: “We recognise the UK as a leading exponent of services to the oil and gas industry.”

“We are proud of our industry supply chain, but we do know we need help from others to achieve our targets, which is why we are looking to the UK.”

The South American country is fast being seen as a key target market for exporters, particularly from the UK.

The country is among the top 20 markets – identified for the Government by Trade Minister Lord Green – which hold export potential for the UK and are part of the Chancellor George Osborne’s target of increasing UK exports to £1 trillion.

The UK has a long-standing relationship with Colombia, but changes in the country’s standing among the international community and plans for significant investment, are making the market increasingly attractive to exporters.

Tony Regan, deputy head of mission and director of trade and industry for Colombia, explains: “Colombia is in a period of growth and has targeted sectors like oil and gas, along with infrastructure, health and education, which have been identified as key areas that will support its future economic prosperity.”

“We (the UK) have provided support for Colombia for many years and we are now seeing a very different country that is far more outwardly focused,” he explained.

“It is now recognised by the international community as a country where the economic structure provides a good place to do business. In fact, it is rated as number 50 of 180 countries for its ease of doing business.”

Ecopetrol also is looking outward. Previously, it predominately has focused its business on the Americas, but with the support of the UK embassy in Bogota, is now looking to do business in the UK, including building a European supply chain and is planning to open an office in London.

“Ecopetrol is receptive to the products and services offered by the UK,” says Tony.

“A visit from the president of the company last year showed positive signs towards establishing a relationship with the UK, which is being developed on this latest visit.”

While in the North East, the delegation from Ecopetrol met with a number of key oil and gas supply chain businesses, which are established exporters and lead their respective fields through innovative, technology-led solutions.

“The North East has a world-respected energy sector supply chain and continuing attracts interest from markets across the globe,” said NOF Energy’s Caroline Lofthouse.

“We support our members’ business development activities by helping them access new markets, be they through inward visits such as the one with Ecopetrol, or market visits led by us.

“We are consistently looking at a wider spread of markets for our members and are planning visits to countries including Vietnam, Malaysia and Singapore.”

Among the businesses visited by Ecopetrol was Newcastle-based BEL Valves. BEL Valves supplies high-pressure valves to the oil and gas industry with exports representing 40% of its total market in terms of turnover.

Alison Ennis, marketing manager at BEL Valves explains: “This trend mirrors that seen within the UK oil and gas supply chain, but also represents BEL Valves’ distinct focus on the frontier oil and gas markets of deep water, high pressures and temperatures and stringent emissions criteria.

“These service conditions link to the specific geology found in areas such as offshore South America, West Africa, Gulf of Mexico, the Caspian and Asia Pacific. So, it is no surprise to learn that these are some of BEL’s chosen markets in addition to its home market in the UK and Norwegian North Sea.”

She continued: “Latin America provides significant opportunity for UK business growth as oil output is set to grow there faster than any other region in the world. Brazil remains at the forefront of this growth. However, Colombia continues to rise up the ratings with a much more attractive business and taxation regimes in place.

“Ecopetrol of Colombia is moving into its own offshore developments, which means that BEL Valves is well placed to share its experience and capitalise on this frontier market.”

Also part of the visit was subsea umbilicals manufacturer DUCO, which part of Technip Umbilical Systems (TUS). From its base in Walker, Newcastle, the company produces 300km of umbilicals annually. TUS’ focus on the export market resulted in DUCO Ltd in the UK being presented with the prestigious Queen’s Award for exports in 2011.

Jean-Louis Rostaing, managing director of DUCO Ltd said: “Exports are a large and growing part of TUS global business as subsea oil and gas reserves are being discovered and exploited in new areas all over the world and this is helping to increase the demand for the product it manufactures.”

“The Colombian oil and gas industry has the potential to become a major client for Technip Umbilical Systems as it plans to vastly expand its offshore oil and gas production by the end of this decade.

“The recent visit by the Colombian trade delegation to the DUCO Ltd facility based in Newcastle provided it with a comprehension of the TUS company structure, its umbilical system expertise and available products and services along with an understanding of its extensive track record over the last 30 years for supply of its umbilical systems to the offshore oil and gas industry worldwide.”

Utilising NOF Energy’s network, the visit to the North East appears to have laid the foundations for new trade between the two countries.

Rafael Guzman explains: “We are keen to get support from the UK and this visit has given us face-to-face time with suppliers and the first steps towards forming long-term relationships.”

“We are now taking the thought that the UK can be a key supplier to Ecopetrol to form more concrete ideas of where help can actually be sourced.”

“Working with organisations like NOF Energy has its benefits,” said Rafael. “It immediately gives us access to a wider network and people who have experience of supporting export activities.”

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