A question of supply and demand

 

Find out about our follow-on investment in ChevlerInvest bulletin: issue 5, 2010

 

"In our last bulletin we talked about the importance of the right business model and making the most of potential new markets," explains Peter Wright, Finance Wales' investment director. "To make the most of these opportunities, your clients need to think about supply as well as demand."

 

Helping your clients grow sustainably requires careful thought and the right investment if they’re to target new markets profitably and build their brand.

 

"Targeting new, often international markets can be lucrative, but businesses need to build their capability cost effectively," Wright continues. "It's important for your clients to think about cost-effective resourcing and the investment needed to achieve this, whether they're internationalising their supply chain/production or diversifying their product range."

 

International supply chains

 

Taking an international view doesn't only mean looking for new markets, it can also mean sourcing materials, components and services or manufacturing internationally.

 

"Your clients can reap real benefits by taking a wider look at their supply chains, contracting with new suppliers, manufacturing internationally and driving through efficiencies, but they need to ensure their profits don’t get swallowed up by hidden costs," Wright continues.

 

Growing medical devices company, Flexicare Medical Ltd has expanded its overseas manufacturing capacity using investment from Finance Wales. It now manufactures high-quality products which are competitively priced for UK and international markets.

 

Profit from diversification

 

Equally, diversification can be a potential route to growth and improved profitability which may require investment. It may require changes to production processes, the introduction of new technology or additional production capacity, for instance.

 

A further debt investment round of £160,000 has enabled food packaging company Chevler Ltd diversify its product range and increase its capacity to produce higher-margin muffin wraps. The investment has allowed the company to invest in new equipment and grow export sales in Europe and the US.

 

"Diversification is an excellent growth option, but may require investment in new technology or to make changes to your production processes," Wright explains.

 

Take your growth options seriously

 

"Your clients may find thinking through potential growth options and their future strategy tricky, but simple supplyside enhancements can really improve profitability," Wright concludes.

 

Viewpoint

 

Read David Staziker’s viewpoint on developing your supply chain to increase efficiency, improve quality and reduce costs and see the impact on your bottom line.