Catch Of The Day: Ulster SME sells multi million pound aquarium to Bahrain with UKEF support
07 March 2018
Ulster-based ELSS Engineering won a multi-million dollar contract to build a 17 metre-high shark and fish aquarium in Bahrain, with support from government agency UK Export Finance.
ELSS Engineering is a specialist in large-scale aquarium design and installation and management, with high-profile clients across every major continent, from Europe to the Middle East, Asia and Africa. With 99% of its business coming from overseas clients, international sales are vital to the company’s success.
In 2017, ELSS won a multi-million US dollar export contract for the complete design, installation and five-year management of an aquarium to accommodate black-tipped sharks, nurse sharks, stingrays, and a range of smaller tropical fish, which the company will also source for its client, in the Mall of Dilmunia in Bahrain, and which will stand at more than 17 metres high and contain over 700,000 litres of water.
The contract was a high-profile, high-value project in a flourishing market for the company, and therefore an important business opportunity for an SME with sales usually exceeding £1 million annually. Although ELSS has successfully delivered projects of a similar size and value before, this was the first time it was asked by a buyer to provide a performance bond in order to secure the export deal.
While performance bonds are a common requirement from buyers from the Middle East, ELSS’s bank, the Bank of Ireland, required a cash deposit in return for issuing one, which would in turn eat into the company’s cashflow.
Fortunately, UK Export Finance (UKEF), a UK government department that provides finance and insurance to support UK exporters, worked with ELSS and the Bank of Ireland to find a solution. UKEF provided an 80% guarantee on the performance bond, allowing the Bank of Ireland to issue the bond with a significantly reduced deposit from ELSS. This meant ELSS could both secure the high-value Bahraini order and hold onto the cash it needed to deliver the contract, as well as the rest of its order book.
Board of Directors, ELSS Engineering: commented:
“We’re immensely grateful for UKEF’s support. UKEF helped us to secure the bond while allowing us to protect our cashflow, and therefore remain competitive to our buyers in this important market – where we have since won more high-value business.
“Building on this success, ELSS expects its international business to continue to thrive, especially in the Middle East. The company has recently won several more export orders for the design and installation of public aquariums in both Oman and Mauritius.”
Liz McCrory, Export Finance Manager for Northern Ireland, UK Export Finance, said:
“ELSS is a great example of Northern Ireland’s engineering expertise and a company truly making the most of exporting. This was UKEF’s first bond support deal with the Bank of Ireland and I look forward to working with them again in future, to help Northern Irish businesses take full advantage of the international demand for their world-leading products and services.”
Willie McCoy, Senior Trade Finance Manager, Bank of Ireland Global Markets, said:
“This was a major contract for ELSS and Bank of Ireland was delighted to support a local company like ELSS by issuing the required performance bond under the UKEF Bond Support Scheme.
Bank of Ireland are keen to support our local exporting companies and find innovative solutions to help companies winning important international contracts like this. We look forward to working closely with UKEF on future opportunities.”