Government support helps specialist business bag export orders

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Heywood company, Union Papertech, a specialist supplier to the tea and coffee market, has won overseas orders after support from the Government.

The firm supplies biodegradable filter paper to markets worldwide and counts Tetley, Typhoo, Jacobs Douwe Egberts and Celestial Seasoning as clients. It exports approximately 50% of its products to markets in Europe, US and other countries worldwide.

However, when the COVID-19 pandemic hit, Union Papertech struggled with tough shipping conditions as container freight rates shipping costs surged to unprecedented levels, resulting in an increase in costs of transporting its goods, as well as issues finding private sector financing for a new export business became more difficult.

This led to the company seeking support from UK Export Finance (UKEF), taking advantage of its General Export Facility (GEF) aimed at helping UK businesses access funding to cover the costs of international trade.

Specifically, UKEF provided Union Papertech with a GEF facility worth £720,000, of which £576,000 was guaranteed, with the rest provided by NatWest.

The GEF support will give the company more financial flexibility to expand this offering as demand increases outside of the UK market.

Union Papertech has begun developing more sustainable coffee and teabag paper, replacing the polypropylene with a greener, more environmentally-friendly alternative and continues to export its products around the world with increased interest within the US and Europe.

The company has recently won two further contracts in India, with a combined value of approximately £730,000 per year.

Stephen Todd, finance director at Union Papertech, said: “As with many UK businesses involved in exporting, the pandemic presented a huge challenge for us. Fortunately, UKEF support played an instrumental role, allowing us to pursue new export contracts and expand our work in producing biodegradable paper.”

Andy Mannix, export finance manager at UK Export Finance, said: “UKEF’s mission is to enable and empower British companies to realise their exporting potential. Increasingly, this mission is focused on empowering businesses that can make a difference with sustainable goods.

“It has been a tough year for British business, especially those in food and beverage like Union Papertech. In such unpredictable times, I’m delighted that we could provide the necessary support.”

Vicki Cole, trade finance manager at NatWest, said: “It’s an exciting time for Union Papertech as they embark on expansion plans and develop new biodegradable products to support their growing business. We wish them every success in this and future endeavours.”