West Midlands exporters secure £28.7 million in overseas sales thanks to UK government financing

The money came from the UK Export Finance (UKEF) agency, set up to provide backing for British business exports.

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

When Mechatherm won a lucrative US$25.7 million (£19.7m) 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 per cent 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.”

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 per cent 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.

Its Business Plan for the next three years includes a partnership with banks to deliver support directly to their trading customers.

International Trade Minister Greg Hands said: “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.”