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To export or not to export: is it time to seek an overseas solution to growth?

The energy transition will escalate the potential to export expertise, solutions, and products, but venturing into the unfamiliar can be daunting and a gargantuan leap into a bureaucratic minefield. Colin Elcoate from Alderley shares his experiences on building successful overseas operations and the pitfalls to avoid.
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Alderley uses a ‘business in a box’ approach when venturing into new overseas markets to ensure everything is done the Alderley way from the outset. Pictures: Alderley

Keeping close to customers, cementing relationships, and meeting client needs has been Alderley’s mantra as it has grown its global footprint.  

Overseas operations work so well for the integrated energy solutions business it’s looking at where to open next.  

Substantial investment in a new base in Singapore was achieved mid-pandemic, following a $1million redeployment of a floating production storage and offloading (FPSO) unit managed by a team at its SMS operation based in Great Yarmouth.  

“British engineering businesses have so much to offer to the world and can make a real difference in new markets,” its CEO Colin Elcoate said.  

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Alderley has looked beyond the UK for the last two decades. Today, more than half its 330 employees are based overseas. Next year is expected to be the best year in its history.  

“Ours has been a history of investigation, being brave and agile, and putting our money where our mouth is while remaining true to our core values,” said Colin.  

“We want to be with our clients, to speak the same language, be in the same time zone and deal in their currency. All our foreign enterprises are wholly owned. We have invested in this heavily.” There are plans for another operation in Perth, Western Australia, which is currently stalled by the pandemic.  

Until it’s possible, a team in its Aberdeen operation is supporting an oil and gas operator in Australia with tools and remote auditing, but the time difference means it’s not sustainable.  

“They have made a great start and successfully operate from the UK but we need to move at speed and be there.  

With presences in Singapore and Australia, we will have all the Asia Pacific covered off and we have got people there and we aim to grow there.” Alderley discovered its international potential in 2001, building an agile model responding to client needs, including full-blown manufacturing facilities in Saudi Arabia and Dubai staffed by local people.  

Today, with a $100million turnover, the group has managed to maintain the feel of a “small family business” borne out of the North Sea, retaining its flexibility and customer focus.  

“Continuing to be agile and truly interested in solving clients’ problems is our ethos and we’ve remained able to make quick decisions because we have a flat structure.  

We listen to what our overseas clients want.  

Clients want solutions to be built locally and are often not prepared to deal with overseas companies.” SMS’ contract maintaining hydraulic equipment on a floating production storage and offloading (FPSO) in Singapore led to completing its redeployment in less than 12 months – one of the quickest in the world – all supported from Great Yarmouth.  

Its success fuelled Alderley’s confidence to invest heavily and take skills, heritage, and expertise from Great Yarmouth to set up in Singapore and employ local people to grow in that region.  

A virtual office in India also opened during Covid.  

“Localisation is so important to us.  

We continue to look at where next,” Colin said, adding that listening is key to making overseas operations successful – especially to peer companies that have already done it, as well as the EIC and government departments.  

“We started off as a successful operation in the UK and continued to evolve to what we have now.  

Working directly in these regions and in places like Saudi Arabia and Dubai means we understand their needs because we are where they are.” 

Alderley’s pioneering and entrepreneurial spirit is rooted in its founder and late chairman Tony Shepherd, who died last year.  

Shepherd became an export champion, identifying the value of being close to the growing market in the Middle East and exploring opportunities in the United Arab Emirates in the early 1990s.  

Manufacturing facilities were set up in Dubai in 2001 and Saudi Arabia, Dammam, in 2006.  

“Saudi is a massive market and a huge success for us. We were the first metering manufacturer to open in Saudi Arabia in 2006. In 2016, we opened a bigger facility. We have had so many examples of being the first into a territory, for exporting and being service-led.”   

Alderley was awarded the 2018 Board of Trade Award, having worked in 90% of the world’s oil and gas producing countries by 2007.  

“Do your homework and feel your way in the market to understand the requirements and specifications and don’t rush into anything.  

“Look at all the projects around the world and where opportunities are for the next five to 10 years, not two years; this is too short. It takes 24 months to get up and running. You need to look and think long term.   

“Focus on a single territory. You can look further once you’re embedded there.” 

Alderley has established wholly owned foreign enterprises and sends ‘Alderley people’ when it opens a legal entity, and then employs a local workforce.  

“We always send our expertise, brand and quality from the start to introduce local people into the business. We get support from local lawyers, and then employ one senior person to help negotiate the local bureaucracy.  

“All we need is a person and our ‘business in a box’ that ensures everything is done the Alderley way from the outset. Open the box and it is all Alderley for consistency across all our entities – quality, HSE, IT, procedures... it’s all in there. Consistent processes and operations mean we can pull together a joint project from across the world and they are all working to the same procedures.”  

It is also exporting gold-standard practices. With its people in hazardous environments every day, onshore, offshore and in factories, HSE is fundamental everywhere.  

“We have a really strong safety culture we are really proud of and always want to improve. We expect the same standards wherever we are working. We will send an auditor out to our Middle East companies and we will send from the Middle East back to the UK as a learning process.”  

“We have continual rotations of people around all of our businesses and are always looking at how we can do things better. Everyone is fitting into the machine and we will all get better.”  

Covid has contributed to Alderley accelerating the development of its digital business, which started during the oil and gas downturn, creating cloud-based technologies and tailored digital solutions for clients.  

Alderley’s investment increased in the last downturn from 2014-16 with its biggest investment in Saudi in infrastructure and real estate, taking advantage of quieter market times which offer breathing space to take stock and invest, Colin said. 

Services

Colin’s advice to potential exporters 

Focus on one territory at a time and spend time there. Embed yourself and investigate the market to understand where there is potential.  

Connect with peer companies already working in different regions and listen to their experiences.  

Seek advice from the Energy Industry Council (EIC) - there are overseas energy opportunities for UK businesses worth $10 trillion on the EIC database.  

Focus on your business’ core competence and spend time in the region with EIC and Department for International Trade (DIT), who can connect you with the right people.  

Where are people buying your equipment and services? Where is there a hole in the market?  

Gather data from enough diverse sources. Don’t believe anyone telling you that gold is around the corner.  

Take your time. No decisions need to be made over night. Start by exporting your products or services to a region before setting up an office or facility.  

Get established in a region first before looking further. Don’t target several places at once.  

Do your homework. Investigate all the costs of doing business in a region to avoid ‘catching a cold’. Doing business internationally is more expensive so you need to weigh up growth potential.  

Think long-term – five to 10 years.  

Be cautious of joint ventures. Working with a partner is the easiest way into the market but choose carefully. It must be mutually beneficial.  

Remember, not everybody wins first time.  

Joint ventures are not always the best route  

“Joint ventures are mistakes that a lot of people have made,” said Colin. “There are lot of horror stories about JVs. They are very difficult to make truly successful.  

“Working with a partner is the easiest way into the market but choose carefully, for something that is mutually beneficial over a long time.”  

No government funding for overseas hydrocarbons  

“We used to get a lot of support around exporting,” said Colin. “The government was fantastic.  

“We still have contracts running supported by the British government, but the UK government has stopped funding overseas hydrocarbons work. So many people are employed in it, there needs to be joined up thinking.”