Paralloy: Flexible finance helps Teesside business meet spike in demand

Based on Stockton-on-Tees, Paralloy is one of a handful of companies worldwide that produces specialised steel castings for high temperature furnaces. They are a key supplier to the blue hydrogen market, which is in high demand as companies transition away from fossil fuels.

The challenge

In 2021, faced with the opportunity of securing higher-value contracts from abroad, Paralloy needed capital for investing in the company’s growth but also for issuing performance bonds. Performance bonds are common in large export orders, with the supplier required to set cash aside as a guarantee to the client. Self-funding high value bonds would have tied up Paralloy’s cashflow, restricting its ability to invest in growth opportunities.

The solution

UKEF worked with Paralloy’s bank, Santander UK, to put a £15 million bank guarantee facility in place, backed by our General Export Facility. This finance enabled Paralloy to offer bonds on its contracts, assuring potential buyers that orders would be fulfilled even in times of market uncertainty.

The impact

With the backing of our General Export Facility, Paralloy fulfilled the most exports in its 90-year history, with shipments to North America, the Middle East and Asia-Pacific. In 2024, Santander UK was able to increase the amount of the finance facility further, which allowed Paralloy to enter new markets and create 75 new jobs in Teeside.