Fueling Innovation and the New UK Economy – One Invoice at a Time
The West Midlands region of England is the birthplace of the industrial revolution. Until the 1970s, it was one of the most prosperous regions in the country. A half-century later, market liberalisation, economic restructuring and globalisation have strained the region’s economy. Today GDP per inhabitant is 21 percent less than the UK national average1 and youth unemployment is the highest in the country at 17.7 percent.2
But globalization and open markets have also created opportunities. No one understands this more than Kate Kitson, Co-Owner and Director of Bricesco Limited, UK.
Established in 1932, Bricesco is the UK’s oldest and largest kiln and furnace manufacturer. The company nearly closed in the ‘90s when sales dropped due to the entry of lower-quality Chinese kilns and furnaces available at a third of the price. In 2006, Kate, an accountant by trade, and her brother Stuart, a mechanical engineer, saw an opportunity to revive Bricesco’s strong global brand, and purchased the company based on its reputation for high-quality machines and excellent customer service. Today, the family-run business employs 30 full-time staff.
Re-engineering for Long-Term Value
Under the Kitsons’ leadership, the company continues to support its traditional clients, but has also expanded into emerging industries with complex global supply chains where advanced engineering, product longevity and quality are valued. Bricesco specialises in bespoke engineering solutions – from initial concept design to equipment installation, as well as in the design and manufacture of kilns and heat treatment furnaces. The Kitsons re-designed the product line with modules that can be replaced as technology evolves – delivering value to clients as well as supporting responsible manufacturing methods.
Bricesco’s customers are involved in complex industries with long business cycles. Its impressive client roster includes Chinook Sciences, a global leader in environmental technology solutions, including the production of activated carbon, biofuel and green hydrogen. In a partnership between European Metal Recycling and Chinook Sciences, waste from shredded cars is converted into syngas. Bricesco products and services are an integral part of this venture. Bricesco is also a strategic supplier for Chinook Sciences’ RODECSⓇ system that uses gasification to process a wide range of organic feedstock and has been implemented in 18 projects worldwide.
Bricesco is deeply integrated into its clients’ processes. The trust and partnership established with customers is critical in terms of renewing long term contracts. The downside is the long lead time. Most projects take five months to complete, and customers’ payment terms range from 60-90 days after final products are delivered.
This places a strain on the company’s working capital. Although its blue-chip clients pay “bang on”, waiting up to three months to get paid stifles growth.
Igniting Innovation With Flexible Capital
The ability to access funding designed to meet small business needs is not unique to the developing world. In the UK, 99.3 percent of businesses are ‘small,’ employing fewer than 49 people. Well structured financing helps them adapt to changing times, boost their local economies, and remain vibrant and relevant in global supply chains.
Although Kate Kitson was well aware of invoice discounting as an alternative source of funding, she hadn’t tried it until she met AGC’s partner about a year ago. Thanks to responsive service, she was able to access “spot invoice discounting,” providing her with flexible financing in discrete amounts to match her working capital needs.
The partnership paid off. In the past year working with AGC’s partner, Bricesco’s revenue grew 75 percent, and Kitson expects it to grow an additional 50 percent in the coming year.
This impressive growth, due in large part to invoice factoring, gives Bricesco the ability to sustain its reputation for innovation, high-quality engineering, and exceptional customer service – all qualities key to an industrial small business’s success in a global marketplace.
1 European Commission Regional Innovation Monitor Plus. https://ec.europa.eu/growth/tools-databases/regional-innovation-monitor/base-profile/west-midlands
2 OECD Regions and Cities at a Glance in 2018 – United Kingdom. https://www.oecd.org/cfe/UNITED-KINGDOM-Regions-and-Cities-2018.pdf
Alignment to Global Sustainability Standards
We are closely aligned with United Nations Sustainability Goals 5, 8, 9 and 10