UK Government financing has helped manufacturing exporters
Published: 21 July, 2017
UK Export Finance (UKEF) recently published its annual report and accounts, which show government finance and support resulted in a total of £458 million worth of sales overseas for manufacturers.
Companies supported included Mechatherm, a specialist manufacturer and supplier to the aluminium industry.
In 2017, Mechatherm was approached to supply aluminium-molting equipment under a contract worth $25.7 million to Aluminium Bahrain (Alba). Under the contract terms, Mechatherm was required to provide an advance payment guarantee as well as a performance bond from its UK bank.
Through UK Export Finance’s bond support scheme, Mechatherm was able to meet the requirements of the contract. UKEF provided Mechatherm’s bank with a guarantee for 80% of the bonds, thereby freeing up working capital for Mechatherm to fulfil the contract.
Andrew Riley, chairman, Mechatherm International, 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.”
In total in 2016/17, UKEF provided £3 billion in support for UK exports, with 79% of companies benefiting from this support small and medium-sized enterprises (SMEs). Finance and insurance provided over the year helped 221 companies make their exports happen to 63 countries worldwide.
This coincides with UKEF’s latest business plan which identifies a number of concrete measures that will help more UIK exporters and their suppliers benefit from UKEF support including a partnership with banks to deliver support directly to their trading customers announced last week.
UKEF also 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.