Member Article

Thornaby valve manufacturer receives slice of £10 million fund

A firm of Thornaby-based valve manufacturers are the first firm to benefit from a £10 million fund which is being spearheaded by Tees Valley Unlimited.

Process Control Equipment Ltd (PCE), which also has operations in Scotland, Spain, Holland and Germany, has secured three contracts in excess £10 million and has secured a performance bond loan worth £1.1 million to help fulfil them.

The funding comes from the Tees Valley Catalyst Fund, a first of its kind in the UK, and designed to allow Tees Valley firms to bid for large commercial contracts.

Managed by leading fund manager, FW Capital, the Tees Valley Catalyst Fund, is backed by the Government’s Regional Growth Fund, and provides loans for performance bond guarantees. Performance bonds provide a financial guarantee to a client that a supplier will deliver on time and to standard.

PCE managing director Barry Jackson said: “This fund is a boon for businesses as it opens up opportunities and removes barriers. The loan means that we have not had to tie up a substantial amount of our working capital and as a result we will be able to be more adventurous and ambitious as we bid for future work.”

Stephen Catchpole, managing director of Tees Valley Unlimited - the Local Enterprise Partnership, added: “This first investment shows how a trail-blazing scheme which we developed to fulfil a pressing business need, can make a tangible difference to Tees Valley companies.

“TVU is committed to helping overcome barriers that prevent local companies from securing work that allows them to grow, take on new staff and expand their customer base.”

The Tees Valley Catalyst Fund was devised following feedback from companies which highlighted that while technical expertise led to shortlisting at tender stage, a lack of cash reserves prevented them from setting up the required bond and progressing through to final contract.

The fund is an ‘evergreen’ fund with interest and repayments on loans being ploughed back and recycled into new lending.

Joanne Pratt, FW Capital’s fund manager in the North East, welcomed the announcement: “The Tees Valley Catalyst Fund’s first loan to PCE is a key milestone and demonstrates how the Fund is backing local businesses to win significant new contracts.

“Many Tees Valley businesses have the capability and capacity to secure new contracts and now, thanks to the Tees Valley Catalyst Fund, they can also access finance for the performance bonds that are often required. We wish PCE well with these exciting contracts.” FW Capital Investment Executive, Chris Johnson worked with PCE to agree the loan. He added: “PCE is a well-established and highly regarded Tees Valley business with an impressive management team and long-term vision. I’m pleased to have been able to work with Barry and his team as well as Barclays and the company’s accountants, Clive Owen and Co. to structure a loan that provided the financial backing they needed to service these significant contracts.”

The Tees Valley Catalyst Fund aims to unlock almost £700 million in additional work, and support roughly 1,400 jobs in the region, over the next ten years.

Funding, usually required for a relatively short period of typically 18-24 months from contract confirmation to completion, is released in staged payments by main contractors up to final sign-off and/or release of the bond.

Although primarily aimed at small and medium-sized businesses (SMEs), larger companies, which may already have a bond facility in place, can access the fund to extend their existing facility to account for significant, one-off contracts for which they otherwise may be unable to bid.

Companies interested in the Tees Valley Catalyst Fund should visit www.fwcapital.co.uk/catalystfund or call the Tees Valley investment team on 01642 343 494

This was posted in Bdaily's Members' News section by Tom Keighley .