Aigis shows its mettle overseas
February 2006 - FINANCIAL TIMES
The blast protection business has overcome marketing inexperience and found an enthusiastic audience abroad.
If there is one thing David Lawrence has learnt about doing business in the last year it is to be careful where you sign your name. Aigis Blast Protection, the defence technology business of which he is director, spent a month renegotiating a £250,000 contract with an Arab client after the company signed in the right hand corner of the contract instead of the left. “We had totally unwittingly been quite offensive,” Mr Lawrence admits. But he adds that such cultural pitfalls are commonplace for small, export-led businesses such as Aigis, which markets its materials for absorbing bomb blasts in about 70 markets.
Aigis was formed 10 years ago by a couple of scientists who had discovered Tabre, a new material to absorb rather than repel explosions. The company claims its technology can absorb 90 percent of a blast but is flexible enough to be coated on buildings, vehicles and even boots. The business initially languished because of a lack of marketing experience among the founding members. Growth began five years ago when Mr Lawrence and Nico Rogerson, founder of public relations company Dewe Rogerson, became investors and began focusing on increasing sales. Last year the company received £2m from Foresight Venture Partners, a manager of venture capital trusts, to improve marketing. This year, Aigis expects to double its turnover to £4m, although it has yet to reach break-even.
The Derby-based company was forced to look abroad for customers because of what Mr Lawrence calls the “Irish effect” in the UK, where buyers of security equipment often felt they had seen everything after years battling the IRA and felt little need to add to security arrangements. More than 95 percent of Aigis’s sales are outside the UK, Mr Lawrence notes. “There is too much of an attitude here that we know about bombs because we have been involved in Ireland for so long. That has certainly held us back as a business.” UK tendering processes are often also overly cumbersome, in part due to a scepticism about new ideas, Mr Lawrence adds. “You tend to get bogged down in negotiations because the customer wants 3,000 pages of proven tests.” Too often the British reaction is that we have always done it this way, Mr Lawrence says. He contrasts this with countries such as France, where Aigis signed a £1m contract to supply the Gendarmerie Française with Tabre-coated protective boxes for moving unexploded bombs.
“In Britain there seems to be a resistance to the idea that technology might give you the answers to your problems. “Continental Europeans have a much more ready attitude. They say if a technology can solve our problem we will go about using it, even if we have never heard of it before.”
With a permanent staff of just 21 people in the UK, Aigis is reliant on its network of agents across the world to warm leads and smooth negotiations with potential customers. It also uses British embassy trade advisers, although Mr Lawrence warns that these officials can be hit and miss. An embassy official in Bogota helped rescue a deal between Aigis and the Colombian army after a consignment of blast protected soldiers’ boots got impounded at the country’s main airport, Mr Lawrence recalls. “He got into his Land Rover, drove to the airport himself and kicked off until he had got the boots. He then drove all the way to the testing area to make sure we had everything we needed.”
It was a very different story when Aigis sought the help of British embassy staff in Athens when the company was looking for a business agent for help with introductions to Greece’s airport operators. “It was as if he took a photocopy of a page of the local yellow pages.” Mr Lawrence sees little meaningful government support for small exporters such as Aigis. Research and development tax credits are the only state support Aigis receives but even this amounts to relatively small amounts of money. “Frankly, we have been disappointed with the amount of help we get from government. The chancellor talks about helping companies such as ours but we have largely done it ourselves” says Mr Lawrence.
Trade shows have been critical to Aigis’s raising its profile among international buyers, and the company spends about £100,000, a significant chunk of its marketing budget, to attend such events each year. Mr Lawrence is selective about where the company appears. “I probably spend half of my time telling people I am not going to go to their show.” But he believes in making the company’s presence felt where it attends. “Don’t be mean about floor space, because tiny stands send all the wrong messages, and always ask to speak at the show.” Aigis could get up to £1,800 from the government towards its trade show costs if it agreed to appear in the British pavilion at events. But in the defence industry, it pays to be seen to be independent, according to Mr Lawrence. “We are a British company and we are proud of it but we don’t like to ram it up people’s noses. “I would rather not have the money (For appearing in the British pavilion) if it meant accepting the disadvantage of not being independent.
