Throughout the coronavirus pandemic, many manufacturers have switched their efforts in order to produce materials, equipment and products to provide protection to key workers and help treat those with covid19.
Adjusting to the current climate has seen Formula One teams making ventilators, breweries making hand sanitiser gel and car companies making face masks. For others their shift in manufacturing has been less dramatic but equally as important.
Some of our clients for example, who are already in the medical equipment space have been asked by the government to dramatically increase their production of particular items, crucial for tackling the outbreak.
While the number of positive cases in the UK is coming down, globally this equipment is still very much required and even though lockdown may be coming to an end, the need for further protective equipment remains. This is particularly the case as shops, restaurants and pubs open in the coming months, requiring screens and other equipment to maintain the current social distancing rules.
For those who are manufacturing this medical and protective equipment, one of the most important things is the speed at which it can be produced and delivered to where it is needed most. Some of the larger businesses who have switched their efforts have the benefit of using their usual supply chains to help speed the process along, but there are other factors that can both delay and limit the volume of what is being produced and how quickly it is received.
Payment issues, particularly when making international payments can cause significant disruption for these businesses. One element of risk is linked exchange rates and getting more for your money. When producing the vast majority of this medical and protective equipment, businesses will export materials from overseas and will therefore almost always pay in an alternative currency. This leaves them exposed to any volatility in exchange rates, as large swings against them could result in businesses having to buy smaller quantities of materials as their budget is worth less due to the movement in the exchange rate. As a result they may not be able to produce as much vital equipment.
You can start the process of preparing for currency volatility yourself, the simplest way to do so is to be aware of what announcements both politically and financially could cause a shift in the market and plan your payments accordingly.
But, the most effective way to keep your bottom line safe when dealing with orders and payments abroad is to use a specialist. Our job as FX brokers is straightforward; we mitigate currency risk for your business and make the whole process of foreign exchange as simple as possible, no matter how difficult the current circumstances.
If you would like to find out more about how we can support your business with its foreign exchange requirements call us today on +44 (0) 20 7738 0777.
Posted in Business Resources on Jun 26 2020