Unit Superheater won a contract to supply a Libyan state-owned oil and gas provider with custom-made components for one of its heat exchangers. They were worried about getting paid and looked to UK Export Finance for help. Our Export Insurance Policy enabled the company to extend credit terms to the buyer and win the contract.
Through providing support like this, we are increasing the UK’s exports and making the UK more competitive.
Difficulty finding insurance
Swansea-based company Unit Superheater Engineering started in 1983, making specialised thermal equipment for use in heat exchangers. The 65-strong company supplies clients in the energy and oil and gas sectors, including EDF, Eon, Total and Exxon Mobil. Unit Superheater exports 20% of its work, mainly to Nigeria, Pakistan and Russia.
In August 2012, Unit Superheater won a contract to supply a Libyan state-owned oil and gas provider with custom-made components for one of its heat exchangers. The contract, worth £212,000, was an attractive opportunity for the company, but it was unable to find private sector trade insurance.
Leighton Jenkins, Group Finance Director at Unit Superheater, said:
We’ve had a relationship with our buyer for many years and wanted to take this job on says. However, we were worried about not getting paid so we approached UK Export Finance for help and found out about the Export Insurance Policy scheme.
Unit Superheater applied to us for an Export Insurance Policy (EXIP), which covers an exporter against the risks of non-payment caused by specified buyer or political risks. An EXIP can cover up to 95% of the contract value. UKEF offered this level of cover to Unit Superheater in August 2012.
It was important to us to maintain our relationship with our buyer. We’ve built up trust over the years and didn’t want to ruin the relationship and lose future opportunities because of the political instability. The help from UKEF enabled us to take this job with confidence.
Unit Superheater recently secured a components order from its Libyan buyer. This order, worth £135,000, is to be delivered in June 2014.
Mathew Hughes, Export Finance Adviser at UKEF, said:
We were delighted to help Unit Superheater. Trade credit insurance was essential for this contract as it enabled the company to extend credit terms to the buyer and win the contract.
More information on the Export Insurance Policy
The Export Insurance Policy insures an exporter against the risk of not being paid under an export contract or of not being able to recover the costs of performing that contract because of certain events which prevent its performance or lead to its termination.
Criteria for eligibility are:
- the exporter must be carrying on business in the UK
- the buyer must carry on business overseas
- if the duration of the contract is less than 2 years, we are unable to offer cover if the buyer is in a country belonging to the European Union, or in certain other high income countries (Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland and the United States of America) - this restriction does not currently apply to Greece
- the exporter must demonstrate an inability to obtain credit insurance from the commercial market
Read the full guide to the Export Insurance Policy, including how to apply.
Contact an Export Finance Adviser in your region or alternatively call: