By Marcus Leach
UK Export Finance has worked with Lloyds Bank to help Manchester-based WRG Creative Communication win new business in Qatar.
The opening of WRG’s offices in Doha in 2009 placed the company in the perfect position to pitch for a number of high-profile events, including the 20th World Petroleum Congress and the Arab Games. But the contracts for these events demand both performance and advance payment guarantees.
Lloyds had supported WRG since July 2006, but regional trade director Martin Morgan realised that the scope for WRG to win additional contracts meant that the company could need extra facilities.
“We knew from the outset that we were looking at potentially significant numbers in terms of bank guarantees," Martin said.
"On one project alone, the guarantee needs were around £2 million. What we didn’t want to happen was for us to support WRG with guarantees on the first contract they secured and then to discover that they had been awarded another two or three — which their facilities were not sufficient to meet.”
As one of the founding signatories of UK Export Finance’s bond support scheme, part of the Government-backed drive to boost UK exports, Lloyds saw the potential benefits for WRG.
“The new scheme is a huge step forward in terms of boosting exports," Martin said.
"UK Export Finance supports banks by guaranteeing us for up to 50 per cent of our risk. Often contracts can be quite large in relation to a company’s business, which can sometimes prevent businesses from pitching because the size of facilities they’d require to guarantee the deal would be prohibitive. This scheme helps to break down that barrier to business.
“What’s more, it doesn’t cost the customer any more than the bank facility would do anyway, because the bank shares its fee with UK Export Finance.”
WRG’s finance director Steve Kinsey said:
“In simple terms, it means that we’re able to take on more business in Qatar and elsewhere. We’re comfortable in the knowledge that we have the facility to meet the requirements of those individual contracts, which combined are worth in excess of £8 million to WRG.
“We’ve now opened an office in Abu Dhabi, and that brings fresh opportunities. We’re currently pitching for two large events there. When we succeed, it’s reassuring to know that we have the scope to approach Lloyds and UK Export Finance for additional guarantees.”
UK Export Finance chief executive Patrick Crawford said:
“Our job at UK Export Finance is to give British exporters the support they need to make the most of their export opportunities, so they grow their business and the UK economy. I’m very pleased we were able to work with Lloyds to help WRG win this important business, and I look forward to supporting their future successes in the important and growing Gulf events market.”
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