HSBC supports global expansion for Glasscoat
- Dudley-based Glasscoat sets sights on new overseas markets
- HSBC guarantee enables fulfilment of overseas contract for Glasscoat
Dudley-based Glasscoat International, which specialises in designing and building coating systems for the glass and plastics industry, has secured a £460,000 funding package from HSBC to enable the advance purchase of expensive materials, and support its delivery of a new high-value export contract.
The facility includes an Advance Payment Guarantee (APG), to support Glasscoat’s manufacturing and sale of a glass coating machine to a German firm for £710,000.
In order to complete the sale of the machine, Glasscoat required the capital upfront in order to buy the raw materials required to build the cutting edge machine.
HSBC provided Glasscoat with a guarantee for the performance of a commercial contract, reducing the trade risk associated with such a substantial upfront outlay, and allowing them to compete for a contract that might once have been unattainable.
The arrangement enabled the German firm, a first-time customer for Glasscoat, to provide 54 per cent of the revenue up-front, to cover the cost of the materials.
As part of the transaction, HSBC worked with UK Export Finance (UKEF), The UK’s Export Credit Agency, who agreed to support the contract by underwriting the guarantee offered to the overseas buyer.
Glasscoat’s machines are sold into factories that produce a range of glass items, including vodka bottles and perfume bottles.
Glasscoat exports the majority of its machines overseas, to countries including Poland, Brazil and the US, making up 85 per cent of the company’s sales, but they are now looking to use this deal as a platform for expanding its operation with the goal of exporting into further territories, such as South America, Europe, Russia, Lithuania and Turkey.
Ian Cripps, Managing Director at Glasscoat, said:
“We have skills that are not available elsewhere in the world, so overseas trading is key to our business. Our growth ambitions are to export our quality machinery to new markets, such as South America, Europe, Russia, Lithuania and Turkey.
The support provided by HSBC and UKEF helped us to complete this deal and puts us in a strong position to expand into new international markets confidently and with reduced trade risks.”
Stephen Peart, HSBC’s Area Director of Business Banking in the Black Country and Shropshire, said;
“Trading internationally without established relationships can often feel like a leap of faith. However, the UK is an attractive destination for foreign investment and we believe that businesses should have the confidence and ambition to trade globally.
“HSBC is innovating to meet evolving customer expectations and needs, such as giving them the tools to expand into new markets.
Guarantee facilities are one way of doing this and can be very beneficial in helping companies like Glasscoat achieve their ambitious plans to expand further overseas.”
Anne Lockett UK Export Finance Adviser for the Black Country said:
“UKEF is here to help make exports happen. Our support for companies like Glasscoat International shows how we can help UK businesses realise their ambitions to grow by selling overseas.”