Shuresh Maran, director at Welsh industrial manufacturer Flamgard Calidair, tells GTR how the SME leverages the UK’s export credit agency UKEF and why firms like Flamgard “should never lose a job because of access to finance”.
Name: Shuresh Maran
Company: Flamgard Calidair
Title: Business development director
GTR: Tell us about Flamgard Calidair.
Maran: We specialise in the design and manufacture of high integrity fire, smoke and blast protection dampers and associated equipment. We work across industries, predominantly the nuclear, oil and gas, transport and naval sectors.
Our exports are usually 40-50% of the business, but this year exports will be around 80% of our trade, as we have a large UK Export Finance (UKEF)-backed contract in Saudi Arabia. Our products go all over the world to many different infrastructure projects.
GTR: How has UKEF supported you?
Maran: The main project we initially worked with UKEF on was for the nuclear industry at the Chernobyl site in Ukraine, where we developed fire and shut off dampers for the old reactor. For this project, we used UKEF’s bond support scheme (BSS).
The contract for Chernobyl was the biggest contract Flamgard had ever had at that point .
As an SME, we wouldn’t be able to bid for these larger contracts without support, so guarantees like this are crucial for smaller firms to be able to pitch for big, chunky pieces of work, which is what our product is designed for.
UKEF can guarantee up to 80% of the performance bond value, which is usually set at 10% of the contract. Our credit history with Lloyds Bank means they cover the remaining 20%, so we have no cash down.
Alongside Lloyds, we also insure our invoices through Atradius. We minimise our risk, which is how we ensure contract wins. We don’t give the client a reason to say no. We should never lose a job because of access to finance and that’s where UKEF helps, because it gives us vital support.
GTR: What is the new project in Saudi Arabia?
Maran: It is part of the Riyadh Metro in Saudi Arabia, where six metro lines are being built. We are involved in making the tunnel ventilation dampers for lines 1 and 2, which are the biggest lines.
The contract was €4mn and we won it late last year with UKEF’s support. We got approval to manufacture and proceed at the start of this year and we’ll finish the last delivery just before we shut down for Christmas.
Communication between all parties has been the key to our success for the Riyadh Metro and Chernobyl projects. We communicate with Lloyds and UKEF and so whenever we know a contract will land, we can fast track the support programme. The support really allows us to punch above our weight, because our competitors are sometimes £100mn-plus-sized companies.
GTR: What gives Flamgard the edge in securing these contracts?
Maran: We invest heavily in R&D and we can do that because of support schemes on offer through the Welsh government, which are part-funded by the European Regional Development Fund. For Chernobyl, for example, we used Astute 2020, which allows us to develop our ideas with universities.
We often work with PhD candidates to carry out design analysis. We come out with different ideas and they can model it in their system to decide what combination is best. Then we can prototype and test based on their recommendations.
GTR: Moving forward, what’s the plan for Flamgard?
Maran: Export-led growth is the main strategy for us because the UK market is saturated. There are some domestic infrastructure projects we are involved in, like the Northern Line extension of the London Underground, but largely we are looking to export.
The next project we are working towards is the Hinkley Point C nuclear power plant in Somerset, England. The order for the design work is coming from France and it’s likely the equipment supply order will come from there too, which means it is considered an export. We are still under competitive tender, but what we are bidding on for Hinkley will make our other projects look small.
Hinkley would provide Flamgard with a three-year pipeline of work. When I first joined the company three years ago we could only look three months in advance, but now we are looking years ahead. We may use UKEF facilities if required for Hinkley.
One of the trade missions I’m going on shortly is to Japan. They are very interested in our nuclear work, so we are discussing how we can help with Fukushima, as well as upgrading their other nuclear sites with our products.