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Cleveland Potash Ltd (CPL) feared it may have to make some tough cost-cutting choices at its Boulby Mine if the company failed to secure insurance to enable it to fulfil a US$14.4m order with Brazilian fertiliser conglomerate, Fertipar. This deal looked to be hanging in the balance after CPL's parent company, Israel Chemicals Limited, had its group credit insurance limit reduced at the height of the credit crunch. This would not only have had implications for the 1,000-strong workforce at CPL but an additional 4,000 people in its supply chain.
CPL sought advice from its UKTI international trade advisor, Keith Stockdale who has been working with CPL over a number of years, helping them identify contacts and supporting them in new markets. He approached ECGD, the UK's official export credit agency, about providing the insurance support that the private market was unable to deliver.
An ECGD team visited Brazil to discuss the deal with Fertipar and its bankers HSBC. In light of the information they gathered ECGD agreed to insure the order which was subsequently shipped from Tees Dock, Middlesbrough bound for Paranagua, Brazil.
CPL managing director Graham Clarke said the support from UKTI and ECGD had been "essential" to avoid lay-offs at the mine.
He said:
"We would have been at a competitive disadvantage to non-UK mines, so this is a very successful outcome for us. It's a great example of excellent team working between business and government - a real win-win situation."
Lord Davies of Abersoch, Minister for Trade, Investment and Business, who recently took on ministerial responsibility for ECGD, said:
"I am delighted that ECGD and UKTI were able to work together provide a lifeline for Cleveland Potash. It is essential that Government and business continue to collaborate to help exports and to protect jobs by developing and sustaining international partnerships during a most critical time."
ECGD is now considering an application to support a further shipment of 35,000 tons of potash from CPL to Fertipar.
About ECGD
ECGD, the Export Credits Guarantee Department, is the UK's official export credit agency. ECGD works with exporters, project sponsors, banks and buyers to help UK exporters of capital equipment and project-related goods and services, by providing insurance against non-payment risks to UK exporters and guarantees for bank loans to facilitate the arranging of finance to buyers of UK goods. It also provides insurance against political risks to UK investors in overseas markets. More details are available at www.ecgd.gov.uk .
Contacts:
Steve Roberts-Mee, Director of Communications
Tel: +44 (0)7990 887852
Email: steve.roberts-mee@ecgd.gsi.gov.uk
Website: www.ecgd.gov.uk
About UK Trade & Investment
UK Trade & Investment is the government organisation that helps UK-based companies succeed in the global economy. We also help overseas companies bring their high quality investment to the UK's dynamic economy - acknowledged as Europe's best place from which to succeed in global business. UK Trade & Investment offers expertise and contacts through its extensive network of specialists in the UK, and in British embassies and other diplomatic offices around the world. We provide companies with the tools they require to be competitive on the world stage
For the latest press releases from UK Trade & Investment register on our on-line newsroom www.newsroom.uktradeinvest.gov.uk.
Contacts:
Caoimhe Buckley, Head of Press & Public Affairs
Telephone: +44 (0)20 7215 8394
Email: caoimhe.buckley@ukti.gsi.gov.uk
((M2 Communications disclaims all liability for information provided within M2 PressWIRE. Data supplied by named party/parties. Further information on M2 PressWIRE can be obtained at http://www.presswire.net on the world wide web. Inquiries to info@m2.com.
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