Export story: Martek Marine

Founder Paul Luen on why overseas markets held the key to his company's growth


Marine products manufacturer Martek Marine generates 90% of turnover from overseas markets. Founder Paul Luen tells Growing Business how he’s built the business through exporting – and gained the Queen’s seal of approval

When Paul Luen started marine safety and environmental products manufacturer Martek Marine in 2000, exporting was always a key part of the plan. The scale of the opportunity in the UK was “relatively insignificant”, because of where ships are built and operated. For existing ship operators, Luen looked to Greece and Singapore. For new ship construction, the Far East, particularly Korea and Japan. However, as Japan prefers to deal with domestic suppliers, Korea represented the more realistic opportunity. Luen was all too aware that a compelling value proposition and innovative product would not guarantee lucrative contracts. And while the first deal was struck just after launch, some took a good two and a half years of legwork. “They’re more conservative in the Far East,” he says. “I’d worked in marine sales before, so I had the relevant expertise.”

Converting sales

Complying with marine legislation becomes a factor in pushing deals through fast, as shipping companies are compelled to respond. Then it comes down to horse trading on price. “Being a hungry start-up in industry terms, we’ve always been aggressive on pricing,” says Luen, who was quick to use the department of Business, Innovation and Skills to secure funding for targeted export research. He also went on trade missions and used the British Embassy to source agents. “Finding an agent is labour intensive and costly,” he says. Despite English generally being the language of business, Korean shipyards prefer to deal with native marine equipment agents, and Luen admits he’s not entirely familiar with the accepted business rituals. “It’s almost like a courtship,” he explains. “You get to the point where you have a favoured party and then make the initial visits. Like all marriages, though, not all partnerships sail off into the sunset.” Another learning curve in Korea has been dealing with payment and invoicing idiosyncrasies: “One word in the wrong box and payment can be held,” he says. Then there’s intellectual property infringement. “It’s a constant fear when you’re trading volume goods to the Far East. Fighting it is almost futile,” says Luen. “We’ve lost a six-figure sum from infringements.” But shipping companies get their comeuppance when products fail and, being counterfeits, they can’t be traced back to Martek.

Fast progress

Despite such issues, within two years of starting up, 50% of Martek’s revenues were from exports. After 10 years, the figure is 90% of a £5m turnover from products such as Bulksafe, which provides an early warning of water infiltration into solid cargo. This explains why the company was awarded the Queen’s Award for Enterprise for both international trade and innovation. To build on this and meet Luen’s ambitions of £7m revenues this year and £20m with 20% profit by 2012, Martek is focusing on further innovation. Even last year, Luen pursued a policy of reinvesting in new product development to address mandatory requirements in the industry. One such innovation, Martek’s Fastcalgas service, enables shipping companies to manage and remotely monitor the transport of hazardous goods. It has also developed a navigational product in a market worth $100m, while a third monitors smoke emissions. Luen’s also keen to pioneer the use of defibrillators on ships. The company is distributing them through a joint venture, in which Martek has ‘marinised’ the product. “We’re innovating beyond compliance to deliver what customers want,” he says.

Marketing muscle

One of the most effective methods of boosting enquiries for Martek has been mailshots, with the company targeting all global shipping companies rather than simply countries. “There aren’t many in the industry that are as aggressive as we are with direct mail, so it’s something of a novelty factor,” says Luen. He has added custom from Chile and Tunisia, and is targeting emerging markets such as Brazil and Russia, which are expanding their shipyards. As for future growth potential, there are around 100,000 commercial ships in operation and up to 3,000 built every year, each requiring products such as those developed by Martek. So the forecast certainly looks good.

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