• Company: Thamesteel, an emerging Kent-based steel manufacturer with turnover in 2006 of £90 million and employing 250 staff.
• Business context: The company, looking for ways to fund its rapidly growing working capital needs following a large capital investment programme, had been looking at confidential invoice discounting with several leading high street banks - but the banks were moving slowly. Turnover is expected to be over £200 million in 2007 and staff numbers to rise to 350.
• Solution: After an introduction to Coface Receivables Finance the process of providing the company with a confidential invoice discounting service started almost immediately.
• Result: Within a little over three weeks, Thamesteel was benefiting from the access to finance that our confidential invoice discounting facility provides. Thamesteel can face the future confident in the knowledge it can fund its forecast growth in sales!

The Company

Thamesteel is part of the Saudi Arabian based Al Tuwairqi Group. The company processes steel scrap in its new electric arc furnace to produce high quality steel billets. The billets are then rolled in its new, state of the art, rolling mill into steel rod and bar for use in the construction industry.

Based on the Isle of Sheppey in Kent, Thamesteel is ideally located to take advantage of the large amounts of scrap steel in the south east of England, the deep water dock at Sheerness and easy access to Europe. Turnover in 2006 was £90 million and the company employed 250 people.

The company has benefited from substantial investment in new plant and equipment - over £45 million to date. Most recently a new, modern rolling mill and a new electric arc furnace have been installed. The Al Tuwairqi Group see Thamesteel as its platform for the growth of its business into the west. New products coming out of the rolling mill will be sold in the UK and Europe, while surplus steel billets will continue to be sold to middle eastern and other overseas markets. The Sheerness plant is a major UK producer of steel products. Once fully operational, it will re-process about 25% of the UK's steel scrap and will be a major UK producer.

Business Context

Ahead of maximising production at the plant, and the consequential large increase in working capital requirements arising from tough growth targets, Thamesteel was looking to put a confidential invoice discounting facility in place. They had been in discussion with several of the leading high street banks for over three months. One of Coface's underwriters then happened to conduct a buyer visit to Thamesteel on behalf of one of our credit insured clients. During the meeting the underwriter discovered that the company was looking at invoice discounting and offered to put Coface Receivables Finance in touch.

Coface Receivables Finance Solution

A representative from Coface Receivables Finance telephoned Thamesteel straightaway and after a conversation visited them at the earliest opportunity a week later. The representative was joined by a specialist from Coface Receivables Finance with experience of that trade sector and size of deal.

Within 24 hours Coface Receivables Finance had provided indicative terms, arranged an audit and addressed all of Thamesteel's issues and questions. All in far quicker time than the banks. Once the audit was completed and all financial information had been provided by the company, a formal offer was made. A short time later the documents were signed and the facility went live. Funding is not only provided on the back of domestic trade, but also, of particular benefit to Thamesteel, export trade too. Currency facilities are also included. The whole process had taken a little over three weeks.

Result

Summarised by Krishan Attawar, Financial Controller at Thamesteel: "We are a company on the move so we were impressed with the speed and efficiency with which Coface Receivables Finance arranged our confidential invoice discounting facility. Going forward we have tough domestic and export sales targets to meet - a doubling of turnover this year - and we are in no doubt that the arrangement with Coface will provide much of the finance needed to help us achieve this."