§ Mr. Whitakerasked the President of the Board of Trade what steps he is taking towards the establishment of an export marketing organisation to help promote exports by British firms which, because of their size or structure, encounter difficulties in ascertaining and exploiting the potential markets for their products abroad.
§ Mr. CroslandA company under the Chairmanship of Sir Charles Denman, to be called Overseas Marketing Corporation Ltd., is being formed with Government encouragement and support, and with the help of the British National Export Council.
Its task will be to seek new opportunities for British exports, and to ensure an adequate marketing effort to fulfil them. The choice of method will depend 12W on the circumstances, as ascertained by active exploration of potential markets overseas and of sources of supply in this country. Since a direct selling effort in selected foreign countries is an essential prerequisite to success, the Corporation intends to create its own organisation abroad, beginning in Europe. As further experience is gained, the organisation will extend its coverage in this manner to other marketing areas in the world.
Within the broad aims laid down, the activities of the Corporation will be left to the commercial judgment of its Board of Directors on which the Government will not be represented. Its activities will be supplementary to, and not in competition with, existing facilities in the export field, such as the export houses, whose co-operation will be sought.
The Corporation's equity capital, totalling £100,000, is being subscribed by 10 major companies, all concerned, to some extent, with various aspects of marketing overseas; and loan capital up to £400,000 is being made available by the Government which can be drawn in the first 5 years once the share capital is fully paid up. The Government is also entering into agreements with the shareholders providing a guarantee against capital loss for the first 5 years after the Corporation is formed, and provision is made in the loan agreement to waive at the end of this period any interest due to the Government which the Corporation may have been unable to pay because of insufficient profits. No provision is being made to relieve the Corporation of interest payments thereafter.
The Corporation will begin to repay loan capital after five years. Twenty-five per cent, of profits earned in the year in question after deduction of interest, tax and dividends will be applied to this purpose. During the currency of the Government loan, the rate of dividends will be limited to a maximum of 10 per cent. per annum on a cumulative basis.
The Government believe that the Corporation will fill a gap in our existing export armoury, and consider that it has a good chance of achieving a profit-making position before the end of the initial 5-year period. I am grateful to Sir Charles Denman for his initiative, and to the Directors-designate (Mr. J. F. Dick, Mr. J. F. E. Gilchrist, Sir Alexander Glen, Sir Frank Schon, Mr. George 13W Bunzl and Mr. Michael Spieler) who are giving their services free, and who are determined to see his venture through to success.