NatWest helps client secure its biggest export deal using UK Export Finance’s Bond Support Scheme
Established in 1956, Cambridge Glasshouse is the UK’s leading producer of commercial glasshouses, retail structures and associated equipment. With headquarters in East Yorkshire and regional offices across the country, the business has an impressive export record.
“Our level of overseas business varies from year to year,” comments Steve Hinch, Financial Director. “But in 2013, we anticipate that up to 80% of our sales will be to foreign customers. In principle, we go where the work is and at the moment we are targeting the Middle East.”
But as a medium-sized independent with finite capital reserves, Cambridge Glasshouse also needs the right financial instruments and guidance to win the most profitable contracts. When the opportunity to bid for a major USD13 million contract in Qatar came along, the business turned to NatWest for solutions, starting with Gordon Iddon, Director, Transaction Services, UK.
“From the outset, the level of enthusiasm and knowledge Gordon and his team brought to our discussions was a revelation,” comments Steve. “Clearly, NatWest understands the export trade cycle and it understands the Middle East market. Significantly, it also understands how the UKEF Bond Support Scheme can help a business like Cambridge Glasshouse to unlock essential working capital and grow its export revenues.”
Launched in 2011, UKEF’s Bond Support Scheme is part of Government efforts to help UK businesses capture new opportunities abroad as domestic growth continues to flatline. It is part of a package of initiatives that includes the Export Working Capital Scheme and Letter of Credit Guarantee Scheme.
The Bond Support Scheme is designed to help exporters raise contract bonds such as Performance Bonds and Advance Payment Guarantees (APGs). UKEF guarantees up to 50% of the value of a bond issued in favour of an overseas buyer for Performance Bonds, or up to 80% for APGs.
“Applying to UKEF for support under the Bond Support Scheme is a complex and thorough business,” emphasises Gordon. “Fortunately, we have been through the procedure many times before and we have refined an application process that works.”
Having supported the UKEF export schemes from the start, NatWest also has strong relationships with the people responsible for assessing and approving applications. “In this case, we were able to schedule a conference call between Cambridge Glasshouse and UKEF personnel, which certainly helped to smooth the application process,” recalls Gordon.
As well as helping Cambridge Glasshouse to secure support under the Bond Support Scheme, Gordon and his team also arranged other services such as Letters of Credit with a deferred payment period and document preparation support while establishing overdraft and card limits.
Another notable feature of this deal was the strength of collaboration between different teams across NatWest. Among others, Hull Commercial office Relationship team, Trade Services (Manchester), Trade Advisory, Financial Institutions (London) and Bonds & Guarantees made a vital contribution to the deal’s success.
As Steve concludes: “The Qatar contract is the biggest piece of work Cambridge Glasshouse has ever won. Without the support of Gordon and his team, we would never have accessed the working capital we needed to deliver it.”
- In 2011, UK Export Finance (UKEF) launched the Bond Support Scheme to give the country’s export community access to vital working capital
- In July 2012, NatWest helped Cambridge Glasshouse to sign a milestone deal using the scheme
- The Bond Support Scheme is designed to help exporters raise contract bonds