Last Wednesday, UK Export Finance (UKEF) and the Department for International Trade (DIT) hosted our first UK Trade and Export Finance Forum. We designed the event to showcase how we help UK companies to export and inspire more businesses to get involved in major projects overseas. It was a packed day, with government ministers, overseas buyers, in-market experts and senior industry representatives all present, together with over 300 UK companies looking to grow internationally.
UKEF is at the centre of the government’s commitment to trade promotion. We’re leading with finance – using our trade and export finance offer to maximise UK content within the supply chains of overseas projects.
Our Chief Executive, Louis Taylor, opened proceedings with that message. He went on to highlight our strong track record across the world. From hospitals in Ghana, power supplies in Iraq, manufacturing equipment in India and drilling simulation systems to Argentina – our support has made the difference. Now we want to inspire even more UK businesses to grow overseas by supporting projects like these with finance and insurance.
Secretary of State for International Trade, Dr Liam Fox, then announced a groundbreaking partnership between UKEF and Atkins International, the engineering and design consultancy, to identify and promote opportunities for UK suppliers. This will open more than 15 international markets for UK infrastructure and engineering suppliers, proactively bringing business to the UK.
The Secretary of State also announced our support for phase four of the Dubai World Trade Centre project. The £100 million project is expected to generate significant business for UK suppliers.
Minister of State for Trade and Export Promotion, Baroness Fairhead, set out the government’s plans to put a world-class export finance offer at the heart of UK trade. In the Export Strategy, due to be published later in the year, we can look forward to measures aimed specifically at boosting awareness of UKEF’s offer and a commitment to helping more UK businesses access our services and products.
There was plenty going on at the Forum once the speeches were finished. Six government trade envoys shared their thoughts on what makes a successful deal in both developed and developing markets. Our export finance managers and product specialists were on hand for 1-2-1 discussions. There were panel sessions on exporting culture, export finance trends and key areas of growth, and some of our customers discussed how backing from HM Government helped them seize high-value opportunities overseas.
Contributions from banks, overseas companies and trade associations were spectacular, and the event definitely captured the vibrancy, confidence and ambition of the UK exporters in attendance. It was fantastic to hear first-hand about the positive impact of UKEF support.
This is the first event of this size that we've put on in many years, and we want to establish it as an annual fixture in the years to come. As we continue to increase our engagement with exporters and would-be exporters, events like this give us the opportunity to contribute to UK’s exporting community. The demand for finance and the richness of the conversations on the day make me excited to see where we can be by next year!
Watch more reflections on the Forum on YouTube, and see photography from the day on Flickr.
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Gareth Butler, our Head of Bank Delegation, on how we’re helping more SMEs to access financial support through their banks.
Last October, we made significant changes to our Bond Support and Export Working Capital schemes. These UKEF-backed bonds or working capital loans help SMEs access the funds they need from their banks to increase export activity. Whereas previously it could take weeks to access this support, it now takes a matter of seconds where the transaction is eligible.
Here’s how we’ve made those turnaround times so much quicker.
We’ve given the largest UK commercial banks the autonomy to automatically put in place UKEF’s guarantee. If you’re an exporter, we’re pleased to tell you that the lengthy UKEF application form and exporter questionnaire are now things of the past. Your bank will still require you to complete their own application but, provided your transaction meets all UKEF’s eligibility criteria, it will speed through our process.
By using clear eligibility criteria, we’re cutting out the duplication of the due diligence historically carried out by both the bank and UKEF.
Banks can pre-vet your transaction to determine whether it automatically qualifies for UKEF support. If it does, they can speak to you straight away knowing that UKEF cover will be available without needing to make their facility letter conditional upon UKEF approval.
When your case can go through automatically, getting UKEF support only requires banks to enter the case details and an authorised ‘checker’ within the bank to approve and submit the transaction to UKEF. If all eligibility criteria are met, banks will get a confirmation from UKEF in seconds and will be able to inform you, issue the bond(s) and/or allow drawdown of the working capital loan immediately. The bank benefits from improved response times and, in turn, can pass that benefit on to you.
Even if a case doesn’t meet all the criteria, you’ll still benefit from improved turnaround times as we will only look at those criteria which were not met.
Your bank is responsible for making all applications for our trade finance schemes. So, as well as considering exporters, we needed to improve the process for them, making it easier for banks to apply for coverage on behalf of their customers.
In place of the old paper applications which had to be scanned and emailed to us, we have built a new online service through which all transactions are now submitted. Feedback has been extremely positive, and the service represents a significant step forward for UKEF and our operational working with our bank partners.
For the first time, UK suppliers to exporters can now access our trade finance support. You’ll be able to read our blog on this significant boost for small businesses that form part of an export supply chain soon. In the meantime, read our news story from the launch for more information.
If you want to work with your bank to see whether a transaction is are eligible for UKEF support you can find contact details for banks who deliver our Bond Support Scheme and Export Working Capital Scheme on our website.
Our new delegated service is currently limited to businesses who bank with Barclays, HSBC, Lloyds/Bank of Scotland, NatWest/Royal Bank of Scotland/Ulster Bank and Santander but we will be expanding this group in 2018. If your bank is not one of these eight, you can still benefit from UKEF support through the old process.
If you’re curious about what else UKEF can offer, get in touch with our customer service team or call 020 7271 8010.
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As the year draws to a close, I thought I’d take the opportunity to highlight a few of the projects and initiatives we’re particularly proud of having delivered in 2017, and look forward to what’s on the horizon for 2018.
Supporting the high-flying British aerospace industry
Aerospace continues to be one of our priority sectors. Announced at the Paris Air Show in June, our support helped GE Aviation win a multi-million dollar contract to upgrade engines for the cargo and charter airline Atlas Air. As well as boosting the UK’s civil aerospace industry, the deal also protects jobs in Scotland – the work will be carried out in GE’s Prestwick workshop. And it’s not an isolated success: the initial contract has already led to further multi-million dollar agreements for UKEF to finance upgrades of more engines.
Our first contract in Mexican pesos
In August the prime minister announced a £44 million funding package for bus manufacturer Alexander Dennis as they took on a landmark deal in Mexico.
Greater Mexico City has a population of over 20 million, and overcrowding and pollution are huge challenges for the administration. So, when the city’s transport authority, Metrobus, looked to source buses for a new line on the iconic Paseo de la Reforma – Mexico City’s answer to the Mall or the Champs Elysees – Alexander Dennis was the natural choice. Manufactured in Guildford and Falkirk, their red “London” Enviro 500 buses are lightweight and fuel efficient.
But for Metrobus that wasn’t the only benefit of sourcing from the UK. We can support bank financing in up to 60 local currencies – including the Mexican peso. For organisations like Metrobus, whose revenues are in their local currency, this has huge advantages. Our support meant Metrobus benefitted from high-quality UK-manufactured goods accompanied by highly competitive financing, matching their revenues in Pesos. It was our first contract in Mexican Pesos and it was fantastic to support the best of British engineering and an iconic UK brand.
Ramping up, and speeding up, UKEF support for SME trade
We launched an exciting new partnership with 5 major high street banks in October. For finance up to £2 million, SMEs can now access UKEF support directly from their bank. There’s no need to make two separate applications. Provided a transaction meets our criteria, the bank now just notifies us through our new secure digital platform – another 2017 highlight!
As well as this efficient new delivery model, companies that supply exporters can now access UKEF-backed finance too. Extending our support to the supply chain and helping them become part of major export contracts is already spreading the benefits of trade to SMEs across the UK.
Of course, there was lots of business as usual too. From exporting prestige motorcycles to Asia, to production services to the Middle East and cutting-edge MRI systems to Australia. And we stand ready to help more companies of all sizes from all sectors. You can browse our collection of success stories to get a real sense of the breadth of our support.
Looking forward to 2018
Our mission is clear: we want to ensure that no viable UK export fails for lack of finance or insurance. Next year will see acceleration as we’re determined to support even more of the UK’s exporters to succeed in a global marketplace.
We’re increasing our efforts to connect companies in the UK supply chain with the major international projects we support. You’ll hear more about how we’re leading with finance in the New Year – keep an eye on the blog.
This has just been a whistle-stop run through of some of this year’s accomplishments. If you want to find out more about UKEF and what we do, just get in touch with our customer service team or one of our export finance managers.
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Jon Boyce leads our team of export finance managers covering the devolved regions, supporting businesses to take full advantage of export opportunities all over the world.
UK Export Finance (UKEF) works with private credit insurers and lenders to help companies access export finance, and are ready to support you to seek out and take advantage of export opportunities. In my work, I see the strengths of the innovative businesses in Northern Ireland, Scotland and Wales every day. I thought I’d take this opportunity to highlight some of my team’s recent success stories – real-life examples of how our support has made a difference.
I’m based in Glasgow and share responsibility for covering Scotland with two of my colleagues. Glasgow-based firm PCT Group, which manufactures specialist equipment for the energy sector, won a contract with Samsung Heavy Industries worth US$5.46 million. However, their bank required a cash deposit in return for performance and warranty bonds, tying up the cash flow required to fulfil the contract.
Carol Harvey, our export finance manager for Western Scotland, Highlands & Islands and Aberdeenshire, worked with PCT Group to ensure they could take on the contract with confidence. By providing Clydesdale with guarantees on the bonds issued to Samsung, PCT Group did not have to provide a cash deposit and were able to fulfil the order by maintaining cash flow. In addition, Clydesdale provided PCT Group with a working capital loan guaranteed by UKEF and the UK government – a first for the bank.
The manufacturing process for Terminator Breaker is lengthy and expensive. The company makes mechanical rock extractors for use in mining quarries and civil engineering with payment often only due on delivery. Winning two contracts in Algeria and India was a cause for celebration, but it also brought cash flow challenges.
Elizabeth McCrory, our export finance manager for Northern Ireland, worked with Terminator Breaker and Danske Bank to provide a working capital solution. This gave the business the finance it needed to deliver both contracts up front. Terminator Breaker is now exploring the possibility of moving more of its operations and manufacturing to Northern Ireland from its other base in Belgium. It’s great to hear that this decision is motivated in part by a desire to work more closely with UKEF!
Caerphilly-based Hobbs Valve secured a £2.2 million contract to supply valves to Sembcorp Industries Singapore. The overseas buyer required a 3-year warranty bond for 30% of the contract value. Banks can offer these performance bonds but only within agreed limits so when an exporter wins a large order these limits can be put under pressure.
Our export finance manager for Wales worked with Hobbs Valve and their bank to secure the contract. We agreed to guarantee 80% of the bond, sharing the risk with HSBC. This partnership between bank and government enabled Hobbs Valve to take its first steps into a new market, and start a valuable new customer relationship with Sembcorp.
All our export finance managers provide free and impartial consultations, making sure you get the appropriate support and exploring how to bridge any gaps. If you’ve been inspired by any of these stories – or just want to find out more about the work that we do – get in touch with your local export finance manager or contact our customer service team. Our support can really give you the exporting edge.
]]>One of the most important discussions at COP21 was about financing the Paris Agreement, but given the scale of ambition, more than just development assistance will be needed. At the same time, there are important technological advances being made – for example in the UK’s world-leading energy sector – but this expertise needs to be made available across borders.
That is where UK Export Finance (UKEF) comes in. As the UK’s export credit agency, we provide finance and insurance to help UK firms export both their expertise and technology. Our financing can be the critical ingredient that makes a project happen, and we welcome any opportunity to play a role in projects that help realise the Paris Agreement.
Take, for example, the Offshore Cape Three Points project in Ghana. UKEF provided US$400 million in financing to make the project happen, supporting a GE Oil & Gas contract and working alongside the World Bank Group.
This transformative natural gas project will displace the use of heavy oil, reducing Ghana’s carbon emissions by an estimated 1.6 million metric tons annually. The World Bank estimates that this is equivalent to taking 1.2 million cars off the road each year or planting 152 million trees – and most importantly it will help Ghana achieve its COP21 target of “doubling energy efficiency improvement to 20% in power plants.”
It will also have a huge impact on Ghana’s progress against the Sustainable Development Goals. The project will fuel up to 1,000MW of domestic power generation for more than 15 years – around 25% of total estimated thermal power generation capacity in 2020.
Energy security is a critical factor across development areas from nutrition to education to health, and will bring significant benefits to Ghana’s 27 million citizens.
Another notable example of UKEF supporting UK exports of carbon-reducing technology is the headquarters building of waste management company Bee’ah in the United Arab Emirates.
The building, which was designed by Zaha Hadid Architects and is being built by Carillion, will be the first in the city of Sharjah to be powered entirely by renewable and recoverable energy sources, while utilising recycled materials in its construction.
In 2016, we signed a Memorandum of Understanding with the Kenyan Government affirming our appetite to support renewable energy development in the country. We are also strengthening our renewables capability, and are working with sector associations to help smaller suppliers access opportunities with major projects and the finance they need to fulfil them.
UKEF is also committed to encouraging responsible investment. In June, we were elected to the steering group of the Equator Principles Association – a global framework for managing environmental, social and human rights risks in projects.
Here, and as an active member of the OECD’s export credit group’s environmental, social and human rights practitioners, we are taking a leadership role to ensure that these risks are properly managed.
Realising the Paris Agreement will take an unprecedented mobilisation across nearly 200 countries. It will require governments, the private sector and international organisations to work together and, most critically, it will require significant investment.
We at UKEF stand ready to support more projects that will help realise the Paris Agreement – especially in the renewable sector. Get in touch to find out more about how we can make this happen.
This blog first appeared in Climate 2020, the UNA-UK publication providing recommendations and analysis on fulfilling the Paris Agreement on climate change.
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My career in finance started nearly 40 years ago as a happy accident! After a degree in zoology, I took a job working for Midland Bank, International Branch in Bristol to fill a gap before I started my career as the second David Attenborough. I stayed for a while, working in 4 different banks for 38 years, before joining UK Export Finance (UKEF) in 2014.
I’m one of UKEF’s export finance managers. We’re based across the UK and work with companies of all sizes and sectors, providing guidance and, where possible, identifying an appropriate finance or insurance solution to support export transactions.
My patch is the South East – I cover Berkshire, Oxfordshire, Hampshire and the Isle of Wight. It’s a big area and to put this blog together, I kept a diary of a typical week. Hopefully it will give you an insight into the work I do, the variety of companies UKEF supports – and maybe even prompt you to get in touch with me or your local export finance manager if you’re considering exporting!
Lots of calls today, including a catch-up with a Reading-based exporter, who has won a significant contract in India. We’re looking to start UKEF’s first ever short-term finance export working capital facility deal with Indian bank ICICI. If it’s successful, it will support the company’s growth and the future of their UK operation.
My morning begins with a meeting at OxLEP, Oxford’s local enterprise partnership. They provide loans and grant funds to help growing businesses. We’re working together to make effective referrals, so exporters can find the information they need quickly and easily.
In the afternoon, I visit a fantastic engineering consultancy business for marine and maritime matters, which has a huge tank for testing their models with radio controlled boats. UKEF will be helping them with guarantee support on a major project in China, designing and building a testing facility for one of the world’s biggest shipping lines, an exciting venture that should see them go from strength to strength.
A visit to a Surrey business that provides training for helicopter pilots and crew specialising in search and rescue across the world – dramatic stuff! They’re looking at credit insurance and potentially medium-term support to support their bidding on projects in Bangladesh, Mexico and Pakistan – another example of how UKEF support can make the difference.
I’m always looking to raise awareness of UKEF’s services and products in the export community. Today I discussed a series of round tables with PwC and the Department of International Trade. We aim to invite 10-15 business owners, who are interested in exporting. We avoid a fixed agenda so they can shape the discussion – it’s a valuable learning experience for us too and helps make sure we’re providing the services they need.
I start the day with an engineering firm that designs and builds equipment used to find hidden structural damage within turbine and wind farm blades. They‘re interested in bond support and working capital, two UKEF products that really help exporters fulfil valuable contracts.
Next up is an Oxford-based firm in the renewable sector who are interested in exporting to Kazakhstan. They’ve designed new equipment for use in remote locations that converts waste gases from bio-digesters into liquid fuel to replace oil. Their future looks promising and we’re ready to help them succeed in their chosen market!
Today I met two companies that develop servo mechanisms and need finance to grow. They work in different areas – one builds earthquake tables for building design and the other fits micro mechanisms in aircraft, rockets and satellites – but both share a concern about issuing performance bonds to buyers and short-term export working capital. I’m happy to report we’re well-placed to support both to realise their ambitions.
I end a busy week with Innovate UK, a government organisation that provides grants and loans to fast-growing technology firms, to discuss referrals. They suggest a marine engineering firm in Southampton that might benefit from UKEF services – that’ll be next week’s first call!
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When I joined UK Export Finance in January 2017, I was struck by our admirably simple mission: that no viable UK export should fail for lack of finance or insurance.
We know we need to support more exporters by providing them with the services and products they need to realise their exporting ambitions. Only then can we be confident that we are closing the gap between commercial market capacity and the financing needs of UK companies with real export opportunities.
We’ve achieved a lot already. Our recently published results for 2016 to 2017 show a 60% increase in the finance we’ve supplied for UK exports. We also announced two new measures designed to widen access to our support.
We’re streamlining our application process by allowing banks to provide UKEF’s government-backed trade finance support within specific credit criteria without duplicating application procedures. Our support will be available more quickly and we’ll be able to leverage banks’ customer bases to reach many more exporters.
Our trade finance support is also being made available for the first time to companies in an exporter’s supply chain. On average, an exporter has 27 companies in their UK supply chain. Some of these chains are much, much larger, especially when you consider projects undertaken by major contractors. It’s a real boost to our existing offer and will allow thousands more companies – including many SMEs – to access our support.
We’re also looking to the future. Our new three-year Business Plan is a real statement of intent. It sets out the opportunities ahead and the direction we’ve set to take advantage of them.
We’re committed to becoming a more scalable organisation, able to support higher volumes of business more effectively. UKEF will be a more customer-centric organisation, too. We’ll make it easier for customers to work with us by processing requests for support more quickly and efficiently.
Our role is not limited by meeting existing demand. We have a big part to play in identifying additional opportunities for UK exporters. The potential of UKEF involvement can even drive overseas procurement decisions in favour of the UK. You’ll hear more about this principle – leading with finance – in later blogposts.
Throughout my career, I’ve seen the positive power of international exports on national economies. When I joined UKEF I knew it was already one of world’s most innovative and flexible export credit agencies. Our plan for the next three years confirms that UKEF is continuing on this trajectory – ready to support even more UK exports and overseas investments.
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Before joining UKEF I worked as an MP’s Parliamentary Assistant or, as the stereotype goes, an MP’s ‘bag carrier’. Regularly running from one side of the Parliamentary estate to the Commons chamber with speeches and briefings in hand did not always help dispel that notion! Likewise, MPs’ assistants would often refer to 'The Thick of It' or 'Yes Minister' when characterising civil servants as passionate advocates of acronyms and committees. Six months in and I now inform my old colleagues that their perception of civil servants is incorrect - mostly!
Last September really did feel like diving into the deep end. In my first week I attended an Executive Committee meeting, worked on Ministerial briefings, Parliamentary Questions (PQs), and attended a training course on Freedom of Information requests. All while meeting new people and trying to get to grips with the unique function of UKEF and the very different world of the Civil Service.
When describing living in London to friends and family back home, I often describe London as a collection of diverse villages. These villages each have a distinct character but come together to make the great city that London is. In many ways UKEF is also a collection of different villages carrying out specialist functions, but we are all united by our mission that no viable British export should fail for lack of finance or insurance.
I feel very grateful that colleagues took the time in my first few weeks to meet me and explain the different divisions and functions of our Department. At no point did I feel like the ‘nuisance newbie’ and I continue to rely often on the generous collaboration of colleagues. When I have expressed an interest in another division’s work, it’s been met by genuine enthusiasm and a willingness to work together.
As I have learnt more about the Department and our mission to help UK exporters I have become increasingly proud of what we do. I even welcome that question from family and friends: what exactly do you do and what is UK Export Finance?
In the past six months, my role has already given me a number of opportunities in addition to the day job. Perhaps most rewarding was the opportunity to spend two weeks working in our Minister’s Private Office. This not only gave me the chance to tour the historic Foreign Office, but also to work closely with the Minister and his team.
Working with Private Office gave me the chance to champion a project I suggested. Every time UKEF supports a new business the Minister now sends a letter to the company’s constituency MP. I have found that new ideas and initiatives are really encouraged by UKEF, even from a newbie like me.
Ben Robey is an Information Officer at UK Export Finance. Keep in touch. Sign up to email updates from this blog. Follow UKEF on Twitter or connect with us on LinkedIn.
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It’s an exciting time for the UK’s exporting community. Earlier this month I was in Birmingham, taking part in the Midlands Engine Summit – about the plan to achieve economic growth and prosperity across the whole of the Midlands.
I want to tell you about some of the companies we’ve already supported in the Midlands – and how we want to do more to help businesses in the region realise the opportunities out there.
The Midlands economy is worth more than £200 billion. It’s larger than the economies of New Zealand, Vietnam and Finland and nearly the same size as those of Singapore and Denmark. It is home to more than 780,000 businesses, and accounts for 23% of all English goods exports, which are sold to more than 100 countries.
The Midlands is already an economic and creative powerhouse – but it has the potential to grow even more.
Over the past 5 years we’ve provided £80 million in support to Midlands companies for nearly £800 million worth of export contracts.
But these numbers alone don’t tell the full story. For these companies, finding the right finance and insurance was critical. Our help can make all the difference.
As the UK’s export credit agency, our mission is to ensure that no viable UK export fails for lack of finance or insurance from the private sector. We do this by providing the finance and insurance exporters need to win, fulfil and get paid for export contracts.
We’ve helped many Midlands-based companies compete for and win overseas contracts. We helped NMS Infrastructure from Leicestershire win a major bid to build community hospitals in Ghana. For this small company, having government backing was a decisive factor, helping it compete with big players for a significant contract.
Once a company has won the business, our working capital support helps it access the cash it needs to finance that international growth.
Dudley-based manufacturer, Glasscoat, won a contract in Germany. However, with a number of other big orders already on its books, it was struggling to finance the contract, and was concerned it might need to turn down the business. Support for its working capital from UKEF allowed it to take on and fulfil the contract.
And finally, once a company has won a contract and shipped the goods, our credit insurance provides security of payment. This security can give exporters the confidence to enter into new overseas markets. We helped Legume Technology to manage payment risk in Ukraine when security issues made it difficult to get commercial insurance for its sales of fertiliser.
This is just a snapshot of the support we’ve already provided. We hope that our comprehensive package of support will help even more companies in the region start to sell their goods and services overseas.
UKEF support can help make exports happen, but only if companies are able to access what’s on offer. We already have a dedicated team of Export Finance Managers, 5 of whom are based in the Midlands. They offer free and impartial guidance to exporters and businesses with export potential. But we want to do more. In my next blog post, I’ll tell you about some of the exciting innovations we’re working on that will make UKEF support even easier to access for a larger number of exporters – in the Midlands and beyond.
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