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Rihanna, the UK SME and business energy

New balance trainers, a US brand manufactured in a quiet corner of Cumbria.

New Balance, based in Flimby, Cumbria are bucking the trend of other major trainer manufacturers and are eschewing Far Eastern sweat shops for local, handmade, dedication.

In a timely boost to the concept of a UK ‘mittelstand’, where skilled localised businesses export to the world with the support of regional and national government and no little local pride, New Balance stand out.

The New Balance trainer happens to also be the footwear of choice for pop princess Rihanna.

Theirs is a heart-warming story of an SME fighting against adversity and coming out on top, trailblazing for others. Their growth represents the overall trend of manufacturing as the sector that is dragging Britain out of recession by its shoelaces.

Neil Prothero, Deputy Chief Economist of the Manufacturer’s organisation the EEF told the Guardian newspaper:

“In recent years the keyword from policymakers has been rebalancing the economy, giving it a more forward-looking outlook,”

And Prothero underlined the importance of manufacturing to the mittelstand ideal by pointing our that whilst UK manufacturing only accounts for 11% of GDP it makes up 45% of all UK exports. In total 80% of New Balance’s Cumbrian production is exported.

The reason for this opportunity was put down to changes in the economics and philosophies of major brands. Prothero said:

“As costs have risen relatively in emerging markets some firms have decided they want to retain more control over the manufacturing process, supply chain and their ability to respond to consumer demands.”

However not all of the UK is pulling in the same direction. Factory Manager of the Cumbrian firm Andy Okolowicz reported that their electricity bill had increased from £30,000 to £100,000 a year, and has become such a potential drain on their continued competitiveness that they have now invested in the solar energy to generate nearly 10% of their needs.

Okolowicz warned:

“People know that they can’t afford to stagnate. We need to keep looking to better ways to maintain competitiveness because there’s a limit to what anyone will pay for a pair of trainers.”

Let’s hope the business energy suppliers are listening. As ever their policies represent the fine line between success and failure for many UK SMEs.

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