Richard Hilson of PFL – Access Management examines why winning a major export order can create as many challenges as opportunities, and how manufacturers can prepare for sustainable growth.
For UK manufacturers, winning a major overseas contract should be the ultimate measure of export success. But a significant export deal can place unexpected pressure on cash flow, production capacity, supply chains, labour and logistics – raising the question of whether manufacturers are sufficiently prepared to turn a major opportunity into sustainable growth.
From securing the working capital to buy raw materials, through to finding the production capacity, managing extended payment terms and getting thousands of kilograms of manufactured product to its destination, the ability to fulfil a large overseas contract can put huge demands on a business.
Navigating a new market, demonstrating the product, satisfying local requirements and eventually securing the contract can take months or even years, so it’s understandable the natural reaction is often to focus upon winning more business overseas.
What can be overlooked, however, is the post-win strategy. What to do if we actually win the contract. Imagine a UK manufacturer turning over a relatively modest amount suddenly securing an overseas contract worth £5 million, £10 million or more. On paper it could look transformational, increasing turnover and establishing the company as a new player in an overseas market.
But, it could also require hundreds of thousands of pounds of material before the first finished product even leaves the factory, which is a challenge we all need to be prepared for.
Minding the capital gap
Because manufacturing consumes cash before it generates it, and for a significant fabricated product, you may be buying steel and components, paying employees and subcontractors, increasing energy consumption and committing manufacturing capacity weeks or months before seeing cash land in your bank account. When exporting, this is exacerbated even further.
International contracts may involve deposits, staged payments, and extended credit terms. Freight and insurance have to be considered, and depending on the contract, finished goods may also spend weeks in transit before another payment milestone is reached. All this together not only adds to the cashflow challenge, it can stretch the nerves somewhat.
This is highlighted in the latest Make UK Manufacturing Outlook which found that rising operating costs continued to squeeze businesses, with more than a quarter of manufacturers surveyed having less than a year’s cashflow remaining, while investment was being delayed and headcount reduced.
An export order worth millions doesn’t necessarily put millions into the manufacturer’s bank account right away, in fact, it can do the exact opposite. The answer is therefore to consider financing at the same time as the commercial opportunity, rather than after the purchase order arrives.
The good news from a UK manufacturing perspective, is there is considerably more support available than many businesses perhaps realise. UK Export Finance, for example, provides working-capital support designed to enable businesses to take on larger export orders. Its General Export Facility can support trade finance facilities typically worth up to £25 million, including funding that can be used for labour and inventory, with UKEF guaranteeing up to 80% of the facility provided by the lender.
UKEF reported that it provided £11.2 billion in loans, guarantees and insurance during 2025/26, with that support expected to contribute up to £6.4 billion to UK GDP and support as many as 85,000 jobs. My message then, is don’t wait until you need the money to start investigating how you might finance growth.
Can the factory actually make it?
While cashflow challenges might keep the CFO awake at night, it’s only part of the problem. An order requiring, say, several hundred fabricated products over a 12 month period can add pressure to the whole manufacturing side of the business.
For instance, considertaion needs to be put to how many units need to leave the factory every month, and how many additional production hours might that require. Bottlenecks have to be anticipated as does the need for sufficient welding, fabrication, assembly and finishing capacity. And, crucially, what happens to everyone else, because we can’t just turn around to all existing customers and tell them their lead times have just quadrupled because we’ve landed a big overseas contract.
This is where scenario planning becomes more important than ever, such as understanding exactly what 80%, 90% and 100% capacity really looks like and identifying the point at which additional shifts, recruitment, subcontracting or capital investment are added so a factory can continue to fulfil its existing workload.
Is your supply chain prepped?
The same principle applies to suppliers, and whether or not they can meet the increased demand, and adjusted timescales.
Likewise, when you suddenly require several times your normal quantity of steel, motors, electronics, fixings or other components, price can no t be assumed, and manufacturers have to involve suppliers early, identify long lead-time components and understand where alternative sources may be needed.
The balance isn’t easy, and I doubt it’s ever a smoothe process, as I can testify from experience. Nobody wants to purchase millions of pounds of material for an order they haven’t yet won, but conversations need to be had with suppliers to establish potential volumes, lead times and variance in demand. It really is a test of resilience both for the manufacturer, and all suppliers falling in behind it before, and after the order is placed.
A matter of logistics
It sounds rather obvious, but logistics can dramatically change the economics of an export order. That means calculating how many finished products can fit into a container, considering whether different configurations or levels of assembly could improve this, and factoring in packaging requirements, port and onward transportation costs. Documentation and certification requirements at the destination also need to be established, alongside a clear understanding of which risks and costs sit with the exporter and buyer under the agreed terms.
Another point is whether the support infrastructure in the destination market also needs to be considered. Having trained people available locally, or through regional service centres, can make a marked difference, particularly where customers are operating across different time zones and need technical support when the UK team is offline.
It can also become a key point of difference if a manufacturer can demonstrate it has thought through installation, servicing, and ongoing customer support.
What you don’t want is to discover after an order has been won that each container carries fewer products than expected – this is a very expensive way of learning about international logistics.
And likewise with payments, and the Government’s Business.gov.uk guidance on getting paid when exporting is very helpful here, recommending that businesses establish clear payment expectations and consider the risks associated with non-payment. UK Export Finance’s guidance on credit terms also highlights the importance of understanding the implications of offering credit to overseas customers.
None of this should discourage manufacturers from exporting, the opportunities are significant and the UK is in a great place to export right now. In fact, the Government’s UK Trade Strategy identifies advanced manufacturing among the sectors where Britain has an exporting edge and makes clear that strengthening businesses at home is fundamental to succeeding abroad.
And the support infrastructure is evolving also, in July 2026, UK Export Finance and the British Business Bank announced a new joint scheme, due to launch in spring 2027, aimed at improving access to finance for smaller exporters that can struggle to obtain lower-value working-capital facilities.
So the argument isn’t around being capable of managing and fulfilling a large export contract, it’s more around being ready to deliver, knowing where the pressure points are, and being prepared to adapt to changes that are outside your control.
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