Andy Moss, area director for manufacturing in the Midlands at Lloyds Bank Commercial Banking
The outlook for manufacturers in the West Midlands is bright.
A third quarter survey from industry body EEF recently showed the strong performance of the West Midland’s automotive industry has boosted the region’s manufacturing output by a balance of 20 per cent, bucking a national trend that saw overall confidence in the sector fall.
The same survey found that nearly a third (27 per cent) of firms in the Midlands said prospects for the next three months were positive.
To capitalise on this regional upswing, ambitious firms must ensure that properly planning for growth is on their agenda, and the availability of business critical equipment is an essential aspect of this process.
A lot of the equipment required by the region’s manufacturers comes from overseas but importing essential, costly items could carry certain risks.
The result of the EU referendum has also added to this uncertainty, while the weakness of the pound that followed the vote has made imports more expensive.
To mitigate the pitfalls caused by the inherent and immediate risks associated with importing vital machinery, manufacturers should have a well-informed strategy in place so they can continue to produce the high quality products the West Midlands is known for.
As a first port of call, firms should thoroughly investigate what country they are importing goods from and conduct additional due diligence on their selected supplier, making allowances for custom requirements, any unique cultural sensitivities and the region’s macroeconomic environment.
To support with the operational and logical requirements of importing, manufacturers should consider engaging the services of a freight forwarder, who can advise and support on the often complex routes assets have to navigate to enter the UK.
A reliable financing frame work is also essential. At Lloyds Bank, we have developed an end-to-end solution with manufacturers in mind, which combines tailored funding and an assurance of asset safety.
Capital Import Finance lets firms buy critical assets from international suppliers using trade and asset finance, spreading the cost of the asset over its anticipated lifetime.
It also protects firms from the risks of dealing with overseas traders by providing a letter of credit that guarantees payment only once the supplier has met its agreed obligations.
This lets manufacturers protect their cashflow, giving them more control over their individual growth strategies, while addressing the risks associated with importing from potentially unknown suppliers.
Manufacturing has always been an integral part of the West Midland’s economy, and we hope that as the region’s sector continues to flourish, this one-stop solution will support firms as they secure access to the equipment they need to achieve their growth ambitions.