Santander – Business Up Close
23rd June 2018
Lighting the way overseas
Serial entrepreneur Harvey Sinclair, managing director at Lietcorp International, has swiftly established the LED lighting company in some of the most promising emerging markets worldwide
Harvey Sinclair doesn’t do anything by halves. An experienced business heavyweight, he knows exactly where the opportunities are and hits them hard, making an impressive impact.
Sinclair trained as a management consultant and then moved into commercial advertising before setting up Iris Optical in 2000, an online retail business. He then founded Hotrecruit – which quickly became the third largest online recruitment company in the UK, floated and acquired by Trinity Mirror in 2006 for £55 million.
He explains what came next: “After this, I moved into international leisure opportunities and set up a property fund which brought investors in, with resort hotels, restaurants and high end hospitality events. After two years, I set up a wholesale trading platform, Stockshifters, effectively an Ebay for the wholesale market. I sold out of that two years ago.”
Seeing the light
With barely a pause for breath, Sinclair found his next project, Lietcorp. “I had been looking for a product-based business throughout my career. Then I had a chance encounter with one of my contemporaries, Mark Blythe, who had recently invested in a company called OceanLED – the most popular and most widely distributed marine lighting brand in the world. Alongside this, he had launched Lietcorp, an exciting commercial lighting business, and I moved into the role of joint partner.”
Sinclair quickly identified the biggest opportunity for Lietcorp was establishing itself overseas where the cost savings are more pronounced. “The UK market is fantastic but there are higher electricity prices in Europe, Asia, parts of Latin America and the Middle East,” he says. “I set about launching our international expansion and, while we were doing this, another opportunity became apparent.
“Many companies don’t have the money or the budget to invest in the upfront costs of converting to LED lighting, so we have set up a fund to bridge the gap, with our company Energy Works PLC looking to deploy £10 million of finance over the next three years. We provide the technology for free in return for a share in long-term savings, with companies typically signing a 10-year contract to give us a share of around 50% of the savings made from the conversion. They get an immediate benefit and we get an excellent return over the long-term.”
Lietcorp’s sales strategy involves finding large-scale projects, ranging from hospitals to hotels to ports and shopping centres, to give the best return on what is technically a unique form of investment. And the strategy is certainly paying off, with customers including Mitchells and Butlers pubs, Marks & Spencer, Odeon Cinemas, Emirates Airlines, and many more.
“Two years ago we were a £7 million turnover business, this year we will do £15 million, next year we will do £30 million,” states Sinclair. “We are just about to sign a £10 million order, which will be the biggest LED contract in Britain ever awarded.”
Making the first move
With a presence in Dubai, Germany, Spain and Switzerland, the first international move was made a year ago. “We chose Dubai as our first investment,” Sinclair continues. “Following the crash of the property boom in 2007, many buildings were left constructed but unfinished internally. In 2011, the Arab Spring began to influence the country and development of these buildings was taken up again. Shortly after moving into Dubai, we set up in Germany; it is the strongest economy in Europe, with high electricity prices, so our savings pay back more quickly.”
Although overseas expansion has happened very quickly, Sinclair undertook considerable groundwork to ensure sustainability. “The first thing is understanding the market. You have to conduct research, obtain market intelligence and competitor analysis and study behaviours of how locals set up a business.
“People underestimate the investment – of money and time – which is required in the first months after you expand overseas, to get the infrastructure set up and understand different legislation in different countries. We headhunted local full-time MDs from our competitors, going through an intensive process to find the very best people who would bring with them experience and a local contact book.
“If you can afford it, the help you really need is around accountancy, legal and tax – so you can focus on the launch and sales and marketing strategy and sticking to what you know and what you are good at. To be frank, it is admin issues which can get in the way of setting up a business overseas.
“You also have to be well-capitalised. Keeping control of the finances is key – putting in place the right capital structure, backed by the right advisers and not setting too many aggressive financial hurdles.”
Made in Britain
Being a British company has also stood Lietcorp in good stead in new markets. “The value of the British brand cannot be underestimated,” Sinclair enthuses. “The respect you gain for associated high quality means you can command high prices and high margins. There is a lot of criticism of Chinese manufacturing processes, for instance, with the focus on undercutting competitors on price. We want the very best in the manufacturing of our products, so all our engineering is conducted in the UK.”
The next step is setting up in Singapore this September, again because it is a market displaying high economic growth alongside having high electricity costs. “After Singapore, we are looking to Scandinavia and Australia. I hope to grow from 60 to 150 employees by this time next year and reach several hundred million turnover in five years,” Sinclair outlines.
With Sinclair’s drive and experience backed up by a quality product and clear international strategy, it seems the future for Lietcorp is very bright.
- Know more than anyone else in your market– what customers want, how your product is made, what your competitors are doing
- Ensure you are well capitalised– get sympathetic partners on board who are willing to go on a journey with you
- Don’t compromise on people– buy the best you can afford
- Don’t give up– in business, you must be relentlessly persistent
- Have passion for your vision– and pass this on to your staff and your customers.