Queen's Awards: Why it is vital to keep pounding away

Lynne Curry and Martin Whitfield introduce this report on the Queen's Awards to businesses

Exporting is never easy. But the past 12 months have seen the business of selling abroad becoming progressively harder as sterling recovered its strength to stand at levels last seen when the pound was in the European Exchange Rate Mechanism.

For the 110 winners of the Queen's Award for Export Achievement, today provides an chance to sit back and enjoy the recognition of past performance before rejoining the struggle with exchange rates and aggressive overseas competitors.

The export successes are joined by 16 winners for technological achievement and eight for environmental achievement.

Ian Campbell, director general of the Institute of Export, said the difficulties caused by the appreciation of sterling had already been reflected in a fall in short-term confidence of leading exporters.

He says: "It's getting tougher to sell in overseas markets. A year ago companies were selling to Germany at 2.20 marks to the pound. This year it is 2.80. That makes British goods dearer and German ones cheaper."

The exporters' dilemma is vividly demonstrated by the fortunes of British Steel, one of this year's export winners, with more than half of the company's pounds 8 billion sales going overseas.

Despite the success, British Steel last month announced the bringing forward of a pounds 165m cost-cutting and redundancy programme, partly because of the strength of sterling and the increased competitiveness of other European steelmakers.

Further evidence of the erosion of confidence is expected on Wednesday in the CBI's latest industrial trends survey. Sudhir Junankar, the CBI's Associate Director of Economic Analysis, said strong domestic demand had helped to replace lost overseas business.

Last month's figures showed 35 per cent of firms said their export order books were below normal, while 17 per cent said they were above normal. He says: "The strength of sterling is beginning to take its toll. Export orders are at their weakest level since November 1993."

New tactics have to be employed in more difficult markets. Many small exporters do not take any precautions against currency movements, but they are increasingly looking to overseas currency accounts, and a range of more sophisticated products offered by banks to limit the risk on future orders. While currency levels may produce temporary problems for companies, Mr Campbell believes British exporters are in better shape than in previous decades and that longer-term confidence remains high.

He says: "The quality of our export sales is very much higher than it was in the 1970s. We have become far better at making things and at looking after our customers. Exports are not sold solely on price. For example, people who want to buy a Spice Girls record are not too worried about the exact price, they want the record."

No record company is a 1997 winner - the Spice Girls will have to wait until 1998 for their success to register - but there are numerous examples of the attractiveness of a uniquely British product in overseas markets. Dr Martens shoes, Marks and Spencer clothes and Bass beers show the popularity of British brand names.

Success has come to many aware of the differences of nationalities. Astracast, a subsidiary of Spring Ram Holdings, has investigated the different tastes of European customers in the bathroom with a view to designing products to meet individual requirements. Inversek, a speciality paper manufacturer with plants in Scotland and Somerset, offers bespoke products to try to escape the cyclical nature of the paper industry.

The list of winners also highlights the unsung heroes of the economy. Companies like Bridgeport Machines, of Leicester, winning its second export award for the sale of advanced computer-aided drilling and lathe equipment, would admit to not being household names. But Ian Smith, general manager international marketing, said the award marked the company out from its competitors.

He says: "Our machines are used to making everything from aircraft parts to chocolate bars. Having the Queen's Award on our paperwork and on our business cards shows we are a quality company that is going somewhere. Everybody likes to work for a successful business."

This year's total of 134 winners is five more than in 1996, but well short of the record 175 winners of 1990. Applications judged by the Queen's Award panel rose to 1,724 from 1,561 in 1996, the highest level since 1993. About 25 per cent of winners are successful at their first attempt and more than half have never won a Queen's award before.

Nearly a quarter of the export winners and nearly a third of technology successes have fewer than 50 employees and 56 per cent of winners have under 200 staff. They mix happily with international giants like Toyota, Sony, IBM and GPT.

Manufacturing companies dominate the awards with just 11 per cent representing "invisibles" winners. Information providers like Business Monitor International which produces risk reports, Financial Engineering (conferences and book directories) and the Open University Business School are the exceptions. Bartle Bogle Hegarty, the advertising agency, has won a second successive export award for its overseas campaigns for a string of international brand names. Since winning the 1996 award, the company has picked up five new overseas clients and has opened an office in Singapore.

All the winners have the right to use the Queen's Award symbol for five years and are eligible to reapply. 25 export awards, three for technology and two for environment went to existing award holders.

A similar number of entrants are expected for the 1998 awards. Although exporting in 1997 may be tough, Ian Smith of Bridgeport Machines is relaxed about what this means. "You just have try a little harder. Be a little more active."