West Mids Exporters Secure £28.7 Million In Overseas Sales

News
20/07/2017

UK Export Finance (UKEF) has this week published its annual report and accounts showing £3.6 million of support provided to West Midlands exporters, resulting in over £28.7 million worth of overseas sales.

West Midlands companies supported by UKEF include Mechatherm, a specialist manufacturer and supplier of equipment to the aluminium industry, based in the Black Country and three-time winner of the Queen’s Award for Exporting.

When Mechatherm won a lucrative US$25.7 million deal with a buyer in Bahrain, UK government backing helped ensure it had the financial support it needed to take on such a large order. The contract required Mechatherm to provide a performance bond and advance payment guarantee from its bank, but due to the contract’s high value, it was unfeasible for Mechatherm to put up the cash deposits for both the bonds while retaining sufficient liquidity to fulfil the contract itself.

UKEF provided guarantees to Mechatherm’s bank for 80% of the value of both bonds under its Bond Support Scheme, allowing the company to secure millions in revenue, and subsequently, create more jobs at its West Midlands base.

Andrew Riley, Chairman of Mechatherm said:

“Without the UKEF guarantee, we simply wouldn’t had the financial flexibility to afford the deposit required of us and we would have been forced to turn the contract down. We’re extremely grateful for the support given to us by UKEF and the fact that we were able to take on this order has been a great success for the company.”

UKEF also supported Coventry-based Optilan, a specialist supplier of telecommunications and security networks to the oil and gas sector. When the company won a £1 million contract exporting to India, UKEF provided both an 80% performance bond guarantee and government backing to help Optilan secure a £400,000 working capital loan from its bank, cash that could be used to pay suppliers and staff and complete the order.

Tim Gray, Chief Financial Officer at Optilan said:

“UKEF really is the perfect partner for UK exporters and we couldn’t be happier to work with it, time and time again.”

Jane Cooper, Export Finance Manager for the West Midlands said:

“UKEF’s results demonstrate our ongoing commitment to making exports happen and to finding innovative ways to meet a broader range of exporter needs. More importantly, they highlight the growing international demand for UK goods and services and the willingness for UK businesses to meet that demand.”

UKEF’s national results for 2016/17 show that it provided £3 billion of support across the UK – a 60% increase on 2015/16 – for exports to 63 countries, with 79% of the UK exporters benefiting from this support small and medium-sized enterprises. UKEF also lent a record £305 million directly to infrastructure and energy projects.

This week, UKEF also published its Business Plan for the next three years, which identifies a number of concrete measures that will help more UK exporters and their suppliers benefit from UKEF support, including a partnership with banks to deliver support directly to their trading customers announced last week.

The plan also states that UKEF intends to use the draw of its financing to create procurement opportunities for smaller companies in the UK supply chain, incentivising overseas buyers to look to the UK to source goods and services.

Rt Hon. Greg Hands MP, Minister for International Trade, commented:

“This government is putting export finance at the heart of trade promotion, and UKEF’s 2016/17 results show that the UK’s world-leading exporters are supported by a world-leading export credit agency as they look to succeed in a global marketplace. And UKEF’s new Business Plan is a clear statement of intent: Britain is open for business, and we want to help even more companies realise the world of opportunity out there.”

UKEF’s Business Plan builds on the Autumn Statement 2016 announcement of significant increases to UKEF’s capacity and flexibility. UKEF’s total risk appetite doubled to £5 billion and the maximum cover limit for individual markets increased by up to 100%, potentially resulting in as much as £2.5 billion of additional capacity to support exports to some markets. The number of pre-approved local currencies in which UKEF can offer support also increased from 10 to 40, enabling more overseas buyers of UK exports to buy British and pay in their own currency.

National business highlights across the UK in 2016/17 noted in the annual report included:

A year of innovations:

  •  UKEF made the first ever export credit loan to the Kurdistan Regional Government
  •  It introduced a market-leading local currency offering of 40 local currencies
  •  It was the first European ECA to support an upstream oil and gas development transaction through a hybrid finance structure comprising both project finance and reserve-based lending

UKEF supported the construction of Bee’ah’s headquarters in Sharjah, designed by the late Dame Zaha Hadid, the world-renowned British architect

UKEF connected lead UK contractors for large infrastructure projects with over 350 UK companies, increasing the total UK contribution to overseas projects

UKEF reintroduced cover after a 20 year hiatus for UK companies seeking to compete for business in Argentina, with £1 billion of support made available

UKEF directly helped 221 companies make their exports happen this year, 79% of which were small and medium-sized enterprises

Through its trade finance products designed to help smaller exporters, UKEF supported £585 million of export contracts

The full documents can be downloaded below: