Power Jacks is a leading design and manufacturing company, providing electromechanical lifting solutions for use in a range of sectors, including civil engineering, energy, defence, transport, and industrial automation. Based in Aberdeenshire, the company currently exports to 80 countries. Since 2017, support from the government’s export credit agency, UK Export Finance (UKEF) has enabled Power Jacks to win £9.5m worth of export contracts, and in the last three months alone, to February 2020, £3.2m worth of contracts.
Power Jacks’ products are increasingly used as a replacement for hydraulics around the world. Screw jacks and actuators from Power Jacks can be found from 5,000 metres up in the Andes to 700 metres below the surface of the North Sea, used in projects from subsea cable laying, to the manufacture of wind turbines.
In the last 20 years, exporting has become increasingly important for Power Jacks, with Asia now one of the company’s biggest markets. 60% of the company’s business is now destined to go to overseas clients, the majority of this going to countries outside the EU.
There are financial challenges in exporting to a number of markets, particularly those outside the EU. Exporting to the Middle East can present challenges for credit and cash flow, with an increasing demand for advance payment guarantees, performance bonds, and warranty bonds to secure contracts. The facilities offered by banks on these advance payments and bonds are often unfavourable. Cash conversion cycles in the Middle East and Asia can also be 150 days long, placing a strain on cash flow.
Power Jacks qualified for support from UK Export Finance, the government’s export credit agency. UKEF supported Power Jacks by underwriting 80% of commercially issued bonds and guarantees, where the bank was unwilling to extend facilities beyond 20%.
Bruce Bultitude, managing director, Power Jacks, said:
“We could have potentially lost out on valuable export business without the support of UKEF. We will also be looking into UKEF’s Exporting Working Capital Scheme in the future, for upcoming export contracts.”
Alistair McMillan, export finance manager at UKEF said:
“These recent contracts represented significant wins for Power Jacks during what has been a difficult period for the sector as a whole. While the bank was supportive of the business and the management team, UKEF’s guarantees reduced their risk, enabling them to issue these bonds while allowing Power Jacks to retain the cash needed to fulfil contracts.”