The UK Department of International Trade is trying to raise its profile to attract foreign companies to British soil, an effort that takes on special immediacy with Britain’s coming withdrawal from the European Union. Credit: UK Department of International Trade
LONDON — British government officials are having more success in luring non-British space companies to British soil than they are in using the British export-credit agency to stimulate domestic companies’ export sales.
Terry Coxall, a space specialist at the UK Department of Trade (DIT), said the government’s focus on attracting space product or services companies to Britain has had measurable results in the past few years.
“Sixty or so companies are either intending to grow or say they are intending to set up here,” Coxall said at the March 20 Satellite Finance Network conference here. “That’s an incredible number. When I joined DIT three years ago, the number was very small. It’s now around 60 and growing by the day.”
Coxall said the key to the growth is the fact that the government, industry and academic sectors have been working toward the same end of building a larger British space sector.
The effort began well before Britain’s decision to leave the European Union but has taken on a greater urgency now. Companies attending the conference here said Brexit would be a headwind for them. How serious it will be is unclear.
Some British advantages in creating companies, compared to other nations in Europe, will not change with Brexit.
Register in 48 hours, and fire at will
“You can register and start a company within 48 hours and the corollary to that is it’s easy to close a company — much easier than France or Germany, if you are wanting to make people redundant,” Coxall said. “That is also an attraction.”
While perhaps not unique in Europe, Britain’s space landscape now features large system integrators such as Airbus Defence and Space, an expanding Thales Alenia Space UK, small-satellite builder SSTL and fast-growing nano satellite manufacturer Clyde Space.
Britain’s UK Export Finance has never been as active in the space sector as its counterparts in the United States, Canada, France and China. But as more British space companies hunt overseas business, the agency is making an effort to make itself more useful.
UK Export Finance Senior Underwriter Peter Maplestone said the agency’s direct lending scheme can provide low-interest loans in regions of he world where commercial banks may be less willing to get involved. UK Export Finance in the past year has also doubled its market limits for most areas of the world, he said.
It’s a start, but the agency is still fighting its history of relative non-involvement in the space sector and what some companies have said was an excessive aversion to risk.
UK Export Finance to industry: See me, use me
“I am sad to say that very often we find that UK companies have not heard of us,” Maplestone said. “They do not know of our existence. We are heavily plugging our role and we have around 30 export-finance advisors throughout the country. They go to trade fairs and seminars. We keep waiving the flag and saying: Remember us, we are here. I hope the message is getting through.”
Nick Flitterman, co-founder of financial advisory boutique Portland Advisors, agreed that UK Export Finance has not been in the front rank of the export-credit agencies. But he said the British agency’s approach to lending is just as good as other nations’ and that this fact is slowly becoming known in the industry.
He said that for one space-sector financial transaction he was working on, it was Portland Advisors that suggested the use of UK Export Finance, and not the company that raised the idea with the customer.
For Deimos Space of Spain, the existence of Britain’s Satellite Catapult, a government-affiliated space business incubator focusing on satellite downstream applications, was key to the decision to create a British division.
The decision of the European Space Agency (ESA) to relocate its satellite telecommunications directorate to Harwell, in Oxfordshire, was also a draw, said Phil Davies, Deimos UK’s managing director.
The Deimos example
Davies confirmed what Coxall said about the advantage for companies of establishing operators in less-favored areas, and the lack of financing for those insisting on settling in southeast England.
Deimos’s owner invested heavily in Deimos UK in the first year, and the company was profitable as from its second year, Davies said. The company now employs 20-plus people and expects revenue of some 2 million British pounds in 2017.
Davies said one way Britain could enhance its value to foreign companies considering a local presence would be to readjust its space budget in favor of a national British program.
Britain’s national space budget is mostly spent through the European Space Agency. Competitors France, Germany and Italy have developed national programs alongside their hefty ESA contributions. “A better balance would really help the UK industry,” Davies said.