Manufacturing and Engineering
UK manufacturing continues to face fierce competition from emerging economies in Asia, primarily China and India, which are able to produce goods more cheaply. Manufacturing’s share of the economy is around 10% today, half of what it was in 1990. Recalling the demise of Leyland DAF Ltd when Buchler Phillips was appointed Joint Liquidator in 1996, the heavy blow of growing overseas production as it affected the workshops in the north of England has not been forgotten, particularly since more than 2,000 employees in that situation alone were made redundant as a consequence.
Nonetheless, engineering and manufacturing are sectors undergoing dramatic change, which can also bring significant opportunities for UK businesses ready to exploit well-established strengths in electronics, chemicals, pharmaceuticals and aerospace. The industry is no longer about merely turning raw materials into physical products. Increasingly, manufacturers derive revenues from other activities which are really services, for example specialist engineering, retooling used parts or even some forms of equipment leasing.
The value chain is increasingly complex and manufacturers are adapting, some quicker than others. In addition, technology in production – robotics, computer design and new materials – require fewer jobs, meaning new forms of training for different skills and a need for companies, the education sector and government to work together delivering them. Encouragingly, almost 75% of R&D spend in recent years has been from manufacturers. Optimists might say manufacturing and engineering are sectors at the heart of a major realignment. Hopefully, rumours of their deaths are greatly exaggerated.
The invaluable experience gained by our manufacturing and engineering team at Buchler Phillips leaves us well placed to advise on either operational or financial restructuring needs in this sector. We understand the challenges of economic uncertainty, disruptive entrants to the market, regulation, staff issues and the high costs of equipment. Our Partners are equally comfortable advising early stage companies or large, established businesses trading beyond the UK.
Areas in which we are able to support businesses in these sectors include:
- Cash flow and working capital
- Leasing and funding of production lines
- Asset finance
- Factory premises and their purchase or rent
- Assessing available financial support for R&D
- Grant application support
- Managing exchange rate fluctuation
- Operational efficiency
- Invoice financing