The difficult UK economy is driving chemicals and raw materials firms to look overseas for growth, according to a joint study by UPS and the Centre for Economics and Business Research (Cebr).
However, despite the enthusiasm for international trade among businesses in the sector, the UK economy as a whole remains too reliant on mature market export partners, the research warns.
Cindy Miller, managing director at UPS UK, Ireland and Nordics, said: “There is clearly a huge appetite for offshore trading among UK producers, eager to defy gravity in tough home trading conditions.
“Economic reality necessitates that businesses do more to take advantage of expanding markets such as Eastern Europe, rather than rely on our traditional trading partners in Western Europe and the US.”
As a result of difficult domestic trading conditions, three quarters (74%) of non-exporting chemical and raw material companies included in the study are increasingly looking overseas for sales opportunities.
A similar number (75%) believe that the UK economy has hit a tipping point, where future growth can only be achieved through export, while 64% believe that starting to export will be critical to the future success of their business.
The majority (79%) of internationally active chemical and raw material companies believe that high-growth economies will be essential to their company's future survival, growth and success.
The UPS and Cebr study reveals that a significant opportunity remains in these regions for exporters, as the UK is still yet to fully capitalise on emerging markets. The analysis also shows that only two of the UK’s top 15 export markets were emerging economies (India and China) in 2011, and the country remains heavily dependent on its traditional top five export destinations: USA, Germany, Netherlands, France and Ireland.
Dependence on these economies has decreased only slightly in the past decade, down from 51% of all exports in 2001 to 45% in 2011.
Chemical and raw materials exporters expect the fastest growth in overseas demand to come from Central and Eastern Europe in the next two-to-three years (as identified by 42% of exporters), followed by South America (19%).
Exporting chemicals and raw materials producers identify physical distance and corruption as the joint greatest barriers holding them back from selling more to high growth regions (each identified by 72% of respondents).