This summer, the Antwerp fashion house had a unique opportunity to set up in London. The challenge: setting up a British unit in just a couple of days.
Essentiel's colourful, jazzy creations have been part of the Belgian fashion landscape for many years. The brand is also becoming popular in other countries, including France, Spain and the Netherlands and, more recently, in Great Britain, thanks to the intervention of Trade Development. An interview with Erik Vercauteren, CFO at Essentiel.
Why did you decide to enter the UK market?
Erik Vercauteren (EV): "Some years ago we had a presence in the UK through an agent, but we eventually decided to withdraw from that arrangement due to falling sales figures. But a return to the market was never ruled out entirely, provided that the circumstances were right.
Rather paradoxically, our new UK venture began in France. Last year, we opened an outlet in the 1st arrondissement in Paris, in the heart of the fashion district. As our result, our brand had a high profile with fashion lovers and professionals, and also with importers and department store buyers. Harvey Nichols soon approached us with an offer to sell Essentiel through their shop in London."
And that was an opportunity not to be missed?
EV: "Indeed. Harvey Nichols is a multi-brand concern that works on concession: in exchange for a certain percentage of the revenue, we have a counter in their store staffed by our own people and with our own reporting, visual merchandising, etc. That means we can display our wares in Knightsbridge, a prestigious location with a high footfall. To get in on this attractive system, we just had to set up a unit in the UK. We didn't have much time to reflect, because counters at Harvey Nichols are snapped up."
How did you get in contact with Trade Development?
EV: "That was on the advice of our relationship manager at BNP Paribas Fortis. We had already had a close relationship with the bank for many years and we were in regular contact to discuss our strategic plans, potential financing or other matters. The proposal from Harvey Nichols came up at one of our discussions and our relationship manager immediately suggested getting Trade Development involved."
How did it work in practice?
EV: "Our main concern was to set up an entity in the UK as soon as possible, and to opt for the most appropriate legal form. Trade Development's role in that was primarily that of 'matchmaker', putting us in contact with a local partner, Frenger International. They advised us to set up a limited company with start-up capital of 10,000 pounds; this is rather more than the legally-required minimum, a clear signal that Essentiel was serious about entering the UK market. We agreed to this proposal. Once the decision had been made, things moved very quickly: the limited company was set up in a matter of days.
Although contact is now direct with Frenger – which is also responsible for VAT, accounting and tax matters – Trade Development is on stand-by to assist if problems should arise."
What was the advantage for you?
EV: "First and foremost, we saved time in finding a partner, opting for a legal form and getting things off the ground. We also had easy access to local contacts with a very good knowledge of local rules and regulations. Our experience on other markets had taught us that this local knowledge is essential, both with payment norms and business practice."
Is Essentiel doing well in London?
EV: "Our counter has been operating since mid-August and the initial results are very promising. If that continues, there is certainly the possibility of working with Harvey Nichols in other UK stores."
Trade Development saves you from teething problems in foreign markets
Rob Van Veen, Trade Development Manager at BNP Paribas Fortis, explains how his department can help you tap foreign markets.
Why a separate department?
Rob Van Veen (RV): "Trade Development was set up as part of the Global Trade Solutions Competence Centre in Brussels in response to a two-fold customer requirement. Firstly, medium-sized enterprises tend to assign their business development to staff who are also responsible for a number of other tasks. As a result, it is difficult for them to find time to consider a foreign growth strategy or to prospect for new customers. Secondly, they don't have local contacts or the requisite knowledge or resources to capitalise fully on an opportunity abroad."
So they need something that goes beyond standard banking services?
RV: "Indeed. A bank can provide businesses with practical assistance with their plans for expansion by opening accounts, providing guarantees and offering payment services, but customers need much more than that. They want their bank to consider their strategy and help them establish a prudent and efficient market approach. And that's where we come in."
What precisely is the service you provide?
RV: "In a nutshell, we put customers in contact with people who can assist them with their foreign projects from beginning to end. Initially we focus on listening to their requirements, sounding out their plans and examining the various possibilities.
Then we provide the customer with a report containing all the relevant information – including a clear estimate of the costs and projected results – to enable them to make a considered decision that fits with their strategy. This makes the decision-making considerably easier and quicker, because the company doesn't have to do research or establish contacts itself. And if the project gets the go-ahead, we provide the logistical support necessary for bringing it to fruition."
How does that work in practice?
RV: "It all depends on the project, the country concerned and the customer's actual requirements. Our own staff or co-workers in foreign branches provide a number of services. As a matter of fact, Trade Development services were recently set up in France and Italy to that effect. We can also call upon partners on the spot for matters that require specific local knowledge. This might be market research, recruitment, administration, audit services and legal, tax or operating advice.
This approach gives the company the assurance that they have the right people on board. We work with a network of permanent, reliable contacts who are assessed by the customer after every project. In this way we are able to guarantee quality service. However, the main advantage is that our contacts are very familiar with the local rules and practices and are used to working within that framework."
Does that mean you focus mainly on ‘exotic’ countries?
RV: "Absolutely not. Many customers call on us to tap into European markets, often the neighbouring countries. For instance, we are currently working on many cases that involve Germany, which is an attractive growth market for a variety of sectors, but it is very difficult for 'outsiders' to get established there.
And sometimes a company will initially look too far afield. Management may have ascertained an opening in their market coverage or heard from another company in the sector that market X or Y is 'hot', so they want to enter that market as quickly as possible. But they need to consider whether the market concerned does in fact fit with their business strategy. And they also need to be aware of the market's specific characteristics and rules – prime examples are the unique market circumstances in India and China or the high import duties in Brazil."
Is there a fee for the service?
RV: "Yes, customers do pay a fee, but this should be viewed primarily as an investment. And a very attractive investment at that, because it can save a lot of time and a number of other costs that in many cases prove to be pointless.
We need only think of a scenario where a business person prospecting somewhere in South America spends thousands of euros on their flight and accommodation and then has to set about working in an unknown environment, often without the requisite contacts or a clear idea of the potential costs and income. There is every chance that the trip will turn out to be a damp squib.
We can't, of course, give our customers a guarantee of success, but we do ensure that everything is in place to give their projects the best chance of succeeding. And there is also the advantage of continuity: once we have worked with a company and know its strategy, we can act very quickly if it comes to any future projects or projects involving other markets."
Ideal Felt: potential in Poland
With a concrete strategy, specific offering and – more importantly – the right contacts, the Belgian felt manufacturer established a foothold in Poland.
Ideal Felt is a Belgian supplier of technical felt for a variety of industrial uses and coloured felt for decorative purposes. They also manufacture made-to-measure filter sleeves, heat-resisting seals and protective components for industrial use.
The company operates mainly in the Benelux countries, France and Germany at present. Since Ideal Felt has virtually exhausted the potential for growth in these markets, it is now looking further east. We asked Henry Symons, Director of Ideal Felt, how Trade Development helped him approach the Polish market.
Why exactly did you choose Poland?
Henry Symons (HS): "The decision was dictated by our market approach: Ideal Felt is a niche operator with a highly specialised product range. We work with an extensive portfolio of customers in various industrial sectors and they place small orders from time to time.
As the name implies, a niche market is limited: in recent years we thoroughly tapped the market in the Benelux countries, Germany and France and don't expect to turn up many more potential customers. We can therefore assume that companies that want to work with us in those countries are already doing so, or at least know us. As a result, it will be difficult to achieve any further significant growth in those countries. We therefore sought out new outlets, preferably in countries with a lot of heavy industry. Poland came out on top of our list."
Did you go prospecting yourselves?
HS: "We did go to Poland a while ago, but returned empty-handed. That was primarily due to the fact that it was extremely difficult to find the right contacts. Because of our specific range, we rarely – if ever – negotiate with a central buying department, but rather with technicians and specialists on the shop floor. And in many cases those persons were not familiar to the company's general contact, let alone at reception. And when we did get to meet someone, we still had to contend with the language barrier."
So what prompted you to try again?
HS: "During a meeting with our relationship manager at BNP Paribas Fortis, our plans to expand came up again. He immediately advised us to contact the Trade Development department. They in turn put us in contact with Valians International, their partner for Eastern Europe."
Can you describe the actual process involved?
HS: "We worked in stages. Initially we provided the people at Valians with comprehensive information on our company, activities and products. This gave them a better idea of the market, so that they could focus on seeking appropriate prospects and contacts.
Together we then clearly demarcated the target market. It couldn't be too small, otherwise the profitability of potential business with Poland would be compromised, due to the transport costs. We were therefore looking for companies in potentially interesting sectors that could order significant volumes.
We drew up a very specific questionnaire to help Valians identify suitable companies. Based on that, and taking account of the profile of our 'ideal customer', Valians then drew up a shortlist. We whittled the list down further, and eventually we had ten or so 'must see' companies plus a few other 'possibles'."
And then you visited those?
HS: "That's right. There were three of us: our contact at Valians, who acted as interpreter when necessary, our commercial representative for the Benelux countries and myself. We were able to make seven site visits during our week in the country. Because we had selected various sectors and industry in Poland is very geographically spread, too much time was wasted in travelling to manage any more.
Nevertheless, the difference from our first visit was enormous. The major advantage was that the prospects were expecting us, so they took the time required to talk to us and show us their company. One of the company tours actually gave us some ideas for a new application for our products. And this time language was not a problem."
Can you already gauge the results?
HS: "Most of the companies we visited have asked us to provide test material and draw up a tender. It was drafted in Polish, again thanks to intervention by Valians, which is also responsible for the follow-up. So far that has generated one order, and other negotiations are under way.
Establishing a lasting business relationship is not easy, especially for a Belgian niche operator in Poland. Our potential customers had for years been working with cheaper local suppliers, most of them offering lesser quality products. So it will take a long time to convince them that our products are well worth the extra cost.
I remain optimistic, especially since our contact at Valians is now totally familiar with Ideal Felt's offering and can recommend it to other potential customers in Poland. Working together was also a very informative experience that provided us with a wealth of knowledge that will be useful in investigating other markets. As business people, we are constantly on the look-out for sustainable, profitable growth."
Who is in with a chance of winning a Leeuw van de Export Award in 2022?
On Wednesday 14 September, FIT will present its 21st Leeuw van de Export Award: the highest award for Flemish companies achieving outstanding export results. Will Belkorn, Twipe Mobile Solutions, XenomatiX, Bogaerts Greenhouse Logistics, Kipco-Damaco or Lambo Laboratoria win?
Every year, Flanders Investment & Trade (FIT) awards a Leeuw van de Export Award to two companies that have recorded notable achievements in the field of exports in the past year. We briefly introduce the six nominees below. Be inspired by their foreign expansion stories. On 14 September, the top exporters will be celebrated at the Brabanthal in Leuven.
Nominees in the 'Companies with up to 49 employees' category:
Belkorn from Diest
Healthy and tasty, high-quality ingredients that are good for people and the planet. Belkorn has been making this sustainable vision a reality since 1985, when it launched the first organic baby biscuit in Europe, well before the current trend for organic food. In 2010, a British brand chose Belkorn to bake its biscuits, causing the company to ramp up its export plans. Russia and Australia soon followed suit, and today Belkorn has a presence in 30 countries. More than 95% of the company's turnover is derived from exports.
CEO Jos Corthouts: "Thanks to continuous investments in innovation and a state-of-the-art production centre, we have seen rapid growth over the past five years. In the future, we hope to boost our presence in Ireland, Australia and New Zealand and gain a foothold in the German market."
Twipe Mobile Solutions from Heverlee
Heverlee-based Twipe Mobile Solutions assists 80 influential newspaper titles, helping them to increase their reader numbers and revenue with a user-friendly digital newspaper, insights into reading behaviour, and personalised news feeds. After a first mobile news app and the first exclusive digital newspaper in France, they launched JAMES in the UK, a digital butler that compiles automated, personalised reading lists for subscribers. Twipe Mobile Solutions serves newspapers in 13 countries, accounting for 92% of turnover.
CEO Danny Lein: "In the coming years, we want to develop a tech scale-up that plays in the Champions League of news media technologies, while remaining true to our Flemish roots. With intelligent innovation, a lot of hard work and team spirit, you can grow and build an international reputation."
XenomatiX from Leuven
XenomatiX develops innovative laser systems for self-driving cars. The Leuven-based company provides an answer to the automotive industry’s demand for more compact, reliable and affordable sensors. Despite its small-scale production, XenomatiX has a very local presence in major automotive countries such as Germany, the US, China, Japan and South Korea, to explain and demonstrate its technology on the ground. The company wants to make a difference worldwide with its promising technology.
CEO Filip Geuens: "We want to make an economically relevant contribution to society through our technology and the resulting employment."
Nominees in the 'Companies with 50 or more employees' category
Bogaerts Greenhouse Logistics from Hoogstraten
Bogaerts Greenhouse Logistics is the largest player in the automation of greenhouse gardening. The company develops machines, appliances and other logistical aids for spraying, harvesting and sorting in modern greenhouses. The sophisticated systems, which are produced in Hoogstraten, are now used in more than 40 countries.
CEO Joris Bogaerts: "In Europe, we're gradually hitting the ceiling in terms of terminal automation. But there are lots of large-scale projects in the pipeline in Eastern Europe, Russia and China. And the African continent still offers a lot of potential." We want to be ranked among the global top 3."
Kipco-Damaco from Oostrozebeke
The chicken in your favourite deep-frying snack or boiled sausage is probably produced at Kipco-Damaco. In recent years, the poultry slaughterhouse in West Flanders has developed into a global producer and distributor of chicken separator meat for further processing. After a first foreign sales office in Singapore, the company established 4 production sites and 11 branches in countries such as Brazil, India, the Philippines and Vietnam. This development offers significant added value thanks to local market knowledge and short lines of communication with the meat technologists at Kipco-Damaco. Exports account for 83% of the company's turnover, of which a significant proportion is bound for the EU.
Co-owner and commercial & marketing director Iris Vandaele: "We believe in taking a chance, jumping on every opportunity for expansion. We valorise chicken separator meat, but also extract proteins from feathers for animal feed, for example. We were circular long before this was a hot topic."
Lambo Laboratoria from Wijnegem
Family-owned company Lambo Laboratoria develops high-quality gelatin capsules for the pharmaceutical and food supplement industry. Instead of mass production, they produce capsules that are tailored to their customers on demand. Their choice to operate in a niche market has been driving their international growth for 15 years, with sales to 30 countries today. Currently, exports account for 78% of the company's turnover, with the majority bound for our neighbouring countries, Italy and Poland. The company thinks there is still plenty of growth potential, both geographically and in specific market segments, and is currently looking for partners in Germany and Italy. Far-flung markets also beckon.
Managing Director Uwe Leonard: "We purposefully capitalise on our Flemish roots. It is striking how we are often appreciated more abroad than in our own country. 'Made in Belgium' is a quality label around the world."
Find out on 14 September who are the 2 winners of the 2022 Leeuw van de Export Award. Register beforehand at www.leeuwvandeexport.be.
Are you ready for your first international adventure or do you want to further expand your international activities? We offer you the peace of mind you need, with a wide range of solutions to optimise, secure and finance your import and export activities.
Source: Wereldwijs magazine 2022
Leeuw van de Export 2022 Awards recognise strong export results
On 14 September 2022, Flanders Investment Trade (FIT) will be recognising companies that posted strong international performances by presenting them with its Leeuw van de Export Award. FIT also wants to inspire other companies to cross the border themselves. This is something that BNP Paribas Fortis, as the main sponsor, fully supports.
What do exporters need to look for to conquer the international market? We asked Frank Haak, Head of Sales Global Trade Solutions, and a jury member for this edition of the Leeuw van de Export Awards 2022.
What can would-be exporters expect at the beginning of their export adventure?
"Exporting is an important step forward in a company's evolution. But suddenly operators come into contact with a completely different and usually unknown environment. Import market regulations are often different, as are tax and legal regulations. When making international payments, there are exchange risks. And then there are the specific documents and products required for foreign trade. There are lots of new things to consider."
So, good prior knowledge is crucial?
"Absolutely. However, it's hardly surprising that many entrepreneurs are now going abroad without all the knowledge they need beforehand. The international financing landscape is changing at a rapid pace. If, as a company, you want to have a clear view of all these changes, then you need to constantly keep up with them."
How can companies prepare for this?
"By learning as much as they can about the rules that apply to their new foreign destination in advance. New exporters can use local authorities, such as FIT’s foreign branches, or their banker to guide them through the complex international world. At BNP Paribas Fortis, we have our Trade Development department that can help with this. Rob Van Veen offers companies guidance as they take their first steps in a new international market. This kind of external support may be expensive, but it's an investment that will save money in the long term. We also support more experienced companies in the smooth running of their import and export flows. Our experts have years of experience with export, and the BNP Paribas Group has teams all over the world."
How can exporters protect themselves against unforeseen circumstances?
"The world is a big place, which means that anything can happen along the way. In order to ensure that the goods reach the end customer without being damaged, we recommend that our customers build in the necessary guarantees. A local agent or representative can help to resolve any bottlenecks that can't be resolved easily from home. We also always recommend starting from a worst-case scenario. That way, you’ll be better equipped to deal with unforeseen circumstances."
The situation in Ukraine and Russia is a perfect illustration of this
"Indeed. Until a few months ago, there wasn't a cloud in the sky and then suddenly there was a trade embargo. The result: today, the import and export of goods is blocked, and companies are no longer getting their money. In such a case, it's better for you as an exporter to be well-covered. Of course, you can never be completely sure of what the future will bring. Above all, we want to prevent clients from setting out on a blind adventure."
Which development would represent a significant added value for international trade?
"We need digitally-secured platforms for international trade transactions that all interested parties can use to securely view and exchange documents in digital format. This not only shortens the lead time of international transactions, but would also be a huge step forwards in terms of sustainability. Trade finance is difficult and cumbersome: it involves exchanging tonnes of data, a lot of which is still on paper, unfortunately. But I'm confident that we're gradually moving in the right direction. Many large international banks, including the BNP Paribas Group, are currently working on this."
Finally, what advice do you have for entrepreneurs who are exporting for the first time?
"First-time exporters are advised to work with a letter of credit or documentary credit. Such a document - in combination with a confirmation by our bank - guarantees that the exporter will get their money. Because exporting is nice, but receiving your money afterwards is even nicer. Recently, we've also begun offering Transaction Banking, a new service that combines different expertise: from trade finance to supply chain and cash management. Suppose a company exports to Indonesia, for instance. There, the goods are first processed and then resold. Until then, the Indonesian buyer requests a postponement of payment. Transaction Banking allows our clients to offer a deferred payment for up to 12 months, without impacting their own balance sheet."
Are you ready for your first international adventure or do you want to expand your international activities? We offer you the peace of mind you need, with a wide range of solutions to optimise, secure and finance your import and export activities.
Source: Wereldwijs magazine 2022