Import-Export Alloy For Success

There is no single magical factor for a global import-export business. In the HSBC news article shared below AST's Managing Director discusses the combination of ingredients that need to work together.

An import-export business navigates risks of war, political unrest, natural disasters and currency fluctuations. Operations must be scalable too, to respond to fluctuations and ensure a diversity of suppliers. “So we never put all our eggs in one basket,” says Laurence McDougall, who founded All Steels Trading eight years ago, after two decades’ experience in the steel industry. He participated as a panellist at the GREAT Festival in Istanbul in May, at an HSBC session entitled “Turkey: An Economic Overview.” The dynamic event, principally sponsored by HSBC, serves as a forum for celebrating UK creativity in business and establishing a dialogue among global enterprises.

Advantages in Turkey

McDougall’s trove of knowledge helps his firm differentiate. He knows, for instance, where products are in short supply, so he can sell at higher prices. His global perspective has led him to suppliers in Spain, Italy, Egypt, Korea, China and Germany. But the primary engine, comprising about 35% of his trading, is Turkey, where he has developed strong relationships with six mills, each providing complementary products. All Steels still likes to do business the old fashioned way.”We believe in meeting face-to-face, learning our customers’ requirements or what our mistakes are or how we can improve,” says McDougall.

Growth acceleration in Turkey caught McDougall’s eye in 2006, who notes that steel production there vaulted from 14 million tons in 2000 to 35 million tons in 2013, and still represents a 7% compound annual growth rate. That country offered multiple advantages, as a crossroad between east and west, with robust local demand and neighbouring export markets. Labour costs can be five times lower than the US equivalent, with a young, educated demographic. Moreover, modern plants are generally less than five years old, and fitted with the latest in added technology, compared with much older US or UK mills. As another plus, the Turkish mills work flat out, every spare hour of the day, versus typical 65% utilisation in mature markets.

Old Fashioned Partnerships

Success derives from a combination of factors, but McDougall describes exceptional relationships with Turkish suppliers. In the firm’s early days, McDougall took a novel approach when he went to call on Turkish suppliers. A typical UK trader might visit those mills, to learn what products were available and at what prices. “We turned the meetings around, by asking them to manufacture a specific range of products, and we offered to pay more,” McDougall recalls. “We educated them to added value markets, in terms of different shapes, grades of material rolled to special chemistry, or dimensional tolerances.” The competitors were trying to chisel down the price, whereas he was suggesting a premium.

Most emerging markets produce basic steel for construction. Teaching his Turkish supply partners means developing their capabilities for sophisticated machinery, automotive, heavy goods and engineering products. “We’d sit around the table, recommend how their production units could manufacture new products, and how we could help commercialise those, as a trading partner.” As a trader, he also conveyed the importance of quality, reliability and realistic delivery dates – rather than optimistic projections. Logistics are another key element. Instead of older inland warehouses, which duplicate transport costs, All Steels benefits from a dockside location. Finally, the bill must be settled. Mature markets tend to pay, say, 60 or 30 days after receiving material. In emerging markets, like Turkey, a letter of credit is issued after documents are produced: packing list, invoice, certificate of quality and bill of lading. Payment terms are always LC at sight or cash with documents, so All Steels uses a combination of LC lines, trade loans on stock and confidential invoice discounting.

Steel is bought and sold in dollars. Although they seize exchange rate opportunities, they always buy forward at a fixed rate, at the time of the transaction, and diversify suppliers where other currencies affect prices. McDougall explains, “We know where the margin is, because we’re not speculators and never gamble on currency.”

AST’s Sister Company Enhances its Global Audience!

We would like to congratulate The Steel Ball Company on the launch of their new dynamic multilingual website, which can be seen at the following address:

The new website is available to view in Chinese, English, French, German & Spanish. The Steel Ball Company may well be over 90 years old but its forward thinking Directors appreciate that for businesses wishing to get that competitive advantage, a multilingual website now presents one of the most high impact means of expanding a customer base and securing greater export sales volumes.

The majority of the translation work for the new website was carried out by Lingo24. In 2010 Lingo24 won the HSBC Business Thinking award for Scotland & Northern Ireland the same year that All Steels Trading won the award for the North East of England. So it’s pleasing to report that a chance meeting at the 2010 HSBC final in Hong Kong of two Directors from two very different business genres prompted the start of a mutually beneficial & harmonious business relationship.

Here at AST we have every confidence that The Steel Ball Company's new multilingual website will also attract a large regular global audience and be the envy of its competitors worldwide!

HSBC Trading Thoughts

Building Brands

The continuing cachet of British brands lends a shine to any UK exporter – a theme taken up by Laurence McDougall of All Steels Trading. "Made in Britain is a huge plus," he declared.

Britain means quality, reliability and added value – at least it does in the eyes of many international consumers. What’s left for Britain? We have grown accustomed to the idea that we are no longer a nation that makes things. Certainly the era of home-based mass manufacturing of t-shirts and the like has been consigned to the past.

Panellists and delegates at the HSBC Trading Thoughts events were clear that ‘made in Britain’ remains a compelling tag to foreign buyers. And of course the UK hasn’t let go of manufacturing entirely. Indeed for some specialist firms, making their own products is an article of faith – a central feature of their brand offering. Delegates were urged not to underestimate this association of Britain and quality. Bernard Ginns of the Yorkshire Post pointed to the “tremendous cachet” of UK luxury brands. “If you’re a manufacturing company from Sheffield and you want to go and do business overseas that has enormous value”.

The perception also extends to British consumers. Laurence McDougall of All Steels Trading told the North East event of his Egyptian supplier who is keen to reach EU markets – and uses his British customers as a mark of quality. “If he can show he’s supplying his product to the British then he’s good enough to sell around the world”.

Speaker after speaker confirmed the enduring nature of the British hallmark. But it’s an image that needs to be nurtured and maintained.

Firms Urged to Race into the Export Market - Yorkshire Post HSBC Breakfast 2011 May 12th

Panellists, Mark Vines (North East Regional Commercial Director HSBC), Mark Berrisford-Smith (Senior Economist HSBC), Bernard Ginns, (Yorkshire Post Business Editor), Laurence McDougall (Director of All Steels Trading) and Andrew Neil (Journalist and Presenter).

Yorkshire business leaders with international ambitions went to Wetherby Racecourse this week to hear straight from the horse’s mouth how to break into overseas markets.

The event, organised by HSBC and hosted by broadcaster Andrew Neil, featured expert advice from economists, bankers and businesses that have tasted success abroad.

Mr Neil told the audience: “Britain is the world’s sixth largest exporter.  We export a larger percentage of our GDP than most other nations, including the United States, but there are many companies that don’t export at all and some of our biggest companies export a lower percentage of their output than their international rivals.  “International trade is particularly important at this time if we are to have a strong recovery.”

Mark Berrisford-Smith, a senior economist with HSBC, said Yorkshire companies should consider exporting to huge emerging economies like Brazil, India and China, which are growing “at the most fantastic rate”.

Other expanding markets include Turkey, Poland, Latin America, South East Asia, parts of Africa and the Persian Gulf, he said.  But companies should not overlook traditional export markets in the heart of the Eurozone, like Germany, he added.

Mark Vines, regional commercial director at HSBC, said: “China to me is the great opportunity.  The middle classes in China are so wealthy now and growing massively and their demand for branded goods, particularly English branded goods, is just immense.”

He said Yorkshire businesses have been through cost-cutting programmes, paid down debt and are now considering international expansion.

Rising commodity prices and fluctuating currency movements might be of concern to those considering international business, but there are ways to mitigate against these, he added.

Laurence McDougall, managing director of Thirsk-based All Steels Trading, told the audience about his international experience.  He imports steel from around the world and sells it domestically.  He said: “When we buy in foreign currency we fix the forward purchase for that currency.”  He plans to move into European markets, incentivised by the low value of the pound and advantageous logistic costs.

On the prospects for the European economy, Mr Berrisford-Smith said Europe’s leaders have to convince investors that they would not let peripheral countries default on sovereign debt.  “Europe does not need to have a debt crisis,” he said, pointing to its comparatively low budget deficit and debt burden.

A bigger potential crisis lies in America, which seems to have no deficit reduction plan, he said.  Companies with ambitions to export should consider looking for partners or joint ventures and try to get legal protection for their intellectual property rights, the audience heard.

We Must Rise to the Challenge

Small and medium-sized businesses must rise to the challenge of globalisation and seek new markets for their products and services, says Laurence McDougall, joint owner and Managing Director of All Steels Trading, a steel importer based in Knaresborough, North Yorkshire.

He is firmly of the view that the speed of globalisation and quickening of world trade flows means that SMEs have little choice but to examine how they should respond.

He said watching how Mexican businesses are accelerating their development in this climate had been fascinating.

However, he added: 'In addition to learning, it is equally important for British business to share part of this wealth generation. Our nation should make a deliberate entry into countries such as Mexico through acquisition, partnerships or start-up ventures where such opportunities naturally exist.

All Steels Trading buys steel from across the world and sells it mainly to stockholders and users in the UK. Turnover is expected to double to about £33m this year while income, combined with that of sister company Tomrods, will be about £50m. The firm is looking to move into European countries but Mr McDougall added that Mexico also offers exciting opportunities.

'One cannot ignore that Mexico is the world's 12th largest economy and a country that will enjoy exceptionally strong GDP growth over the coming years compared to mature European countries,' he said. 'The labour force is in excess of 46 million, demographically young and shop-floor salaries are circa one 12th of those seen in the UK.

All Steels Reaps Rewards

Steel Business Briefing Tuesday, 16th November 2010

Thirsk Based All Steels Trading is looking to expand its business further afield, it tells Steel Business Briefing.  The company currently sells around 50,000 tonnes/year and aims to double this to 100,000/year over the next 2-3 years.

It plans to send steel into Scandinavia, Benelux and Germany and France, as well as its current business in the UK and Ireland. Mexico is also an attractive import opportunity because of its comparatively low wages and manufacturing costs, according to MD Laurence McDougall.

"Mexico is undoubtedly one of the hotspots for strong economic growth... It is fundamental that our nation makes a deliberate entry into countries like Mexico through acquisition, partnerships or even through new start-up ventures," he says. "All Steels Trading will be exploring all such opportunities."

As a result of its plans, All Steels has won the regional (north east) final of the HSBC Business Thinking Competition, including a prize of £100,000 and £5m of free trade finance over a 3-year period. The company will also be entered into the UK finals to be held in Hong Kong in December.

All Steels sources material globally, selling forward half of the steel arriving dockside, and expects turnover to double to around £33 million this year.  It is the sister company of Thirsk-based stockist Tomrods, SBB notes.  

All Steels Trading Scoops Top Business Award

 NASS News Update Issue No. 205

12 November 2010

All Steels Trading Ltd. scoops Top Business Award

Congratulations to NASS Member, All Steels Trading Ltd., who has won the regional final of the HSBC Business Thinking Competition.  All Steels picks up a £100,000 first prize, £5 million of interest free trade finance over a 3 year period and qualifies for the UK finals to be held in Hong Kong in December.

All Steels beat 200 other companies persuading the "lion’s den" judging panel that their plans to start exporting steel into Scandinavia, the Benelux countries, Germany and France was founded on sound business practices and illustrated the sort of business planning and thinking that made All Steels stand out from the rest.

Laurence McDougall (All Steels’ Managing Director) said it was a superb award not only for All Steels but for the whole UK steel stockholding industry. "We are sometimes our own worst enemy, talking things down. This award illustrates that UK steel stockholding is a world class industry with a great future and this is now recognised by the largest UK bank, HSBC."  John Thompson (All Steels’ Chairman) said "When our name was read out I nearly fell off my chair! After 39 years in the steel industry this is the first award we have ever picked up."

The award ceremony took place in the Royal Hall in Harrogate and was hosted by the ITN newsreader Mary Nightingale.  Further information about the award can be seen on the HSBC Business Thinking website.

HSBC Business Thinking - North East Regional Final

HSBC Held its North East Regional Final at the Royal Hall, Harrogate

From an overwhelming number of inspiring business thinkers who entered this initiative, 5 were selected as finalists from the North East to travel to Mexico on one of HSBC Thought Exchange trips, experiencing its business culture, economy and the opportunities it can offer.

From those 5, at the climax of the evening, HSBC announced two regional winners; who will receive up to £5 million in lending and a Financial Reward of up to £100,000. The finalists will go on to compete with the winners from 8 other UK regions to contend for the title of Overall Winner of Business Thinking 2010 at the prestigious International Insights event in Hong Kong.

All Steels Trading was victorious in this Regional Final and is looking forward to competing in the Hong Kong Final in December.

Speaking in Mexico Laurence McDougall said

"All Steels forward sells at least half of each shipment landed dockside, and plays the volatility of the markets to find buyers for the remainder. We want to sell into mainland Europe. Key target countries are Germany, The Benelux countries, France & Scandinavia."


"Britain simply can't afford to ignore the pace of globalisation and the acceleration on trade flows that are resulting from the growth in the emerging markets. Mexico is undoubtedly one of the hotspots for strong economic growth and British business will surely learn from watching how business grows in this type of environment."  

The Telegraph - HSBC Business Thinking

Laurence McDougall, Joint Owner and Managing Director of All Steels Trading, based in Knaresborough, North Yorkshire, buys steel from across the world and sells it mainly to stockholders and users in the UK.

Turnover is expected to double to about £33 million this year while income, combined with that from sister company Tomrods, will be about £50 million. All Steels Trading is also looking to move into Germany, France, Scandinavia and the Benelux countries.

Mexico is evidently an immensely proud country that is steeped in both history and culture. Virtually all of the nationals that I have met through the Thought Exchange programme appear to be extremely forward thinking individuals who are very receptive to the idea of collaborating and working in a much more diverse manner than has historically been the case.

From a business perspective one cannot ignore that Mexico is the world’s twelfth largest economy and a country that will enjoy exceptional strong GDP growth over the coming years compared to our mature European countries. One also ought not to ignore that the labour force is in excess of 46 million, demographically young and where shop floor salaries are circa a twelfth of those seen in the UK.

From the Thought Exchange it is now very obvious to me that Mexican companies are keen to develop exports way beyond the US, which currently accounts for 80% of foreign transactions and given the low cost of Mexican manufacture, opportunities must exist to develop steel exports to Europe. All Steels Trading will therefore be exploring all such opportunities through the contacts established during the Thought Exchange programme.

As for my specific learning, the Thought Exchange programme has provided clear guidance on the practicalities of how to conduct business in Mexico. It has also provided excellent opportunity to meet very like-minded business owners and directors, top HSBC commercial executives, Mexican business owners and British Embassy Officials that collectively provided no end of good ideas, thoughts and guidance on how to assist the advancement of my own particular business here.

What can British Business learn from Mexico? Well, I believe that Britain simply can’t afford to ignore the pace of globalisation and the acceleration on trade flows that are resulting from the growth in the emerging markets. Mexico is undoubtedly one of the hotspots for strong economic growth and British business will surely learn from watching how business grows in this type of environment.

In addition to learning, it is equally important for British businesses to share part of this wealth generation. It is therefore of fundamental importance that our nation makes a deliberate entry into countries like Mexico through acquisition, partnerships or even through new start up ventures where such opportunities will naturally exist.

Listening to the owners of successful privately owned companies in Mexico also helped to reaffirm that our business was applying all the same tools and ingredients to make a successful business. The HSBC executives’ presentations provided an excellent insight into the likely advancement of both the world and UK economy.

It was also extremely interesting to hear how HSBC is looking to differentiate itself from traditional banks by providing access to its network of world branches and associated customers that could be used to provide introductions to potential worldwide suppliers and customers. Our company will certainly be tapping into this resource to assist future growth potential.