This feature was placed by UK Export Finance
Flexal Springs has been making precision springs and wireforms for the aviation, defence, oil and gas and electronics industries since 1933. Around 15% of the company’s business is overseas, with India and China being its biggest markets.
Small but perfectly-formed
In March 2012 Flexal Springs won a contract from its biggest Indian customer, a large aerospace company.
The contract, to supply springs for the customer’s civilian aircraft, was worth £33,546 and this relatively low value made it too small for the company’s usual insurance provider to consider, so it approached UK Export Finance for help.
“We’re a family run small business. This contract was the largest we’d had with this customer,” says Nalin de Silva, General Manager at Flexal Springs.
“One challenge with companies in emerging markets is that there is often a long wait between invoice and payment, sometimes as long as nine months.
“This affects our cash flow, putting a strain on our finances. We’ve been working with this customer for a few years, but whilst this contract was more valuable than before, it was also a bigger risk.”
Bridging the pay gap
Flexal Springs applied for an Export Insurance Policy (EXIP) from UK Export Finance. An EXIP insures an exporter against the risks of non-payment by the customer. “We wanted peace of mind we would be paid within a reasonable timeframe,” says Nalin.
“UKEF insured us for 95% of the contract’s value for a period of seven months after delivery of the springs. Thankfully, we didn’t need to make a claim, but having the policy allowed us to take on this contract with confidence.
Onwards and outwards
“We plan to increase our exports to over 25% over the next three years,” says Nalin.
“While we accept that working with a new customer or in a new market always carries an element of risk, we feel more secure knowing that we have the UKEF help. The growth markets are mostly overseas at the moment, so find out if UKEF can help you to move outwards.”
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