A warm welcome in Hanover

Germany is keen to strengthen ties with Britain – and to emulate our success

An air of quintessentially English humour and dogged stoicism greeted the 14,500 visitors to the British pavilion on the first day of last week’s Hanover Fair as the temperature inside the tented dome soared to the 90s.

But if the heating presented a serious challenge to the sensitive electronic equipment in evidence everywhere, meltdown was not a viable option for the 89 exhibitors inside Hall 26.

Hanover is the world’s biggest industrial fair, where exhibitors pay between £500 and £15,000 for units little bigger than a pocket handkerchief. The Department of Trade and Industry backed the British pavilion with £1m, on top of £1m spent by exhibitors, and hoped to help demonstrate the UK’s technology skills and improve its image with potential German partners.

British Aerospace and Eurofighter, Rolls-Royce and the Trent engine, Varity Perkins with its low-emission diesel engine and Burmah Castrol’s Williams F19 racing car were the UK’s most high-profile exhibits.

But they were not there just to celebrate 50 years since Britain set up an industrial exhibition to kickstart the post-war German economy.

The economic challenges facing the mature economies of western Europe are not the same as they were a half century ago. Partnerships are the preferred option now.

Partners in Innovation, the theme behind this year’s event, highlighted the major European achievements in engineering and technology.

At the opening of the 50th fair, Dr Hans-Olaf Henkel, president of the federation of German industry, contrasted Germany’s jobless figure of `nearly five million’ with `imminent full employment in Great Britain’. And he challenged any notions of complacency on both sides.

The message from Britain was that lean government, privatisation, liberalisation and more individual responsibility were measures that created growth and more jobs, he said.

`We cannot exploit the opportunities of a mobile economy in an immobile society,’ he argued, adding that while the Continent seemed to be stuck in a reform traffic jam, in Britain the economy has `green lights all the way ahead’.

Comparing the profitability of British companies which contribute an average net return on turnover of 7% against a 2% figure in Germany, Henkel urged the British to consider the effect of remaining outside the single European currency.

`Britons could introduce the euro at an early stage if they wanted to do so. German industry extends a warm welcome to you,’ he said.

David Foster, managing director of diesel engine maker Varity Perkins in Germany, echoed the case for Anglo-German cooperation. `Whichever way the pound goes, we can take out the currency effect.’

The company performs a balancing act with exchange rates, offsetting the cost of buying raw materials in Germany against the sales of finished goods worth more than DM80m. Foster chose the pavilion to make the most of his company’s British credentials. Germany is Varity Perkins’ most important market outside the UK.

Germany is also the biggest market for exhibitor John Guest which exports 80% of its pneumatic valves. Twice a winner of the Queen’s Award for Exports, most recently in 1995, the company paid £500 for a display board in the pavilion and sees plenty to be gained from DTI supported events. Last year it won £20,000 from DTI funds for exhibits, around half its total costs.

For UK exporters such as those exhibiting at Hanover, the German market is critical.

Germany is the UK’s number one trading partner, taking 12.3% of exports in 1996 and accounting for 14.8% of all imports.

And the UK is Germany’s number two export market, while German investment, boosted by companies such as BMW and Siemens, make the UK the principal destination for outflowing funds.

Whether or not the UK eventually joins the euro, partnership is likely to remain high on the agenda.