UK Export Finance (UKEF), the UK’s export credit agency, today announced that it has guaranteed over £1 million worth of financing for Dundee-based manufacturing company, Rautomead Ltd., to supply machinery to Shaanxi Sirui Advanced Materials Co., Ltd., a specialist Chinese metals manufacturing company in Xian.
Rautomead’s continuous casting machine will be used to produce complex copper chrome zirconium alloy rods at a factory in Baoji City.
UKEF helped Rautomead secure the deal by using its Supplier Credit Scheme, which allows UK companies to get paid on dispatch for their exports whilst letting buyers benefit from deferred payment terms.
To secure the deal, UKEF provided a guarantee to the London Forfaiting Company, which enabled the lender to pay Rautomead 85% of the contract value after dispatch and collect repayments from Shannaxi Sirui over five years.
Adam Harris, Head of Civil, Infrastructure and Energy at UKEF, said:
“At this challenging time, UKEF’s world leading support is playing a vital role for companies across the country. UK expertise remains in demand across the globe, and we are working with lenders to help businesses secure export contracts and keep supply chains open.”
Brian Frame, Rautomead Managing Director, said:
“UKEF’s support provided us with the flexibility to be able to meet our customers request to arrange to pay for the equipment over an extended period of time as opposed to “up front” by Letter of Credit against shipping documents.
As a supplier in a competitive market, it is essential to be able to meet the customers commercial as well as technological requirements whilst also managing our cash-flow and risk. We see good opportunities for this solution in the future to support our sales activity.”
Rautomead is a Dundee-based manufacturer of continuous casting technology for non-ferrous alloys. Founded in 1978, it employs over 50 staff and has been exporting worldwide for 35 years. With most of its revenues coming from sales outside of the UK, exporting is key to the company’s success.
Ian Lucas, Head of UK Marketing, London Forfaiting Company (“LFC”) said:
“LFC has been working with UK exporters to provide cross border financing solutions since 1984. This is the third transaction LFC has completed during 2020 since joining UKEF’s Supplier Credit Scheme. We were delighted to be able to work with Rautomead to find a financing solution for their sale into China, with support from UKEF.
Working with UKEF enhances LFC’s capabilities in providing UK exporters with competitive financing solutions to support their overseas sales. We now look forward to further collaboration with UKEF and UK exporters to develop new export sales and financing opportunities.”
The deal is the eighth contract worth less than £10 million recently supported by UKEF’s Smaller Deals Initiative, which is focussed specifically on helping UK exporters secure smaller overseas contracts through innovative buyer finance solutions.