Food and drink exporters in Wales risk losing millions without a proactive approach to currency management – especially in light of increased political and economic uncertainty as Brexit looms.
That was the message from FX expert Brett Thomas speaking at a Food and Drink Wales Export Club Breakfast Seminar held at Cardiff Airport on March 20.
The event was held in anticipation of the new daily flight starting on May 1 by Qatar Airways from Cardiff Airport to Doha, Qatar. The new route is tipped to open up a whole new range of export opportunities in the Middle East for Welsh businesses, including those in the food and drink industry.
Thomas, head of dealing at Godi Financial, a Swansea-based FX company, stressed that one of the key challenges for Welsh exporters is currency management, with businesses faced with substantial financial loss without a robust foreign exchange (FX) strategy in place.
Thomas highlighted the importance of having a currency hedging strategy that accounts for all known costs and exposure, turning otherwise variable costs into a fixed cost to the business. Various strategies were illustrated via a number of real world case studies of Godi’s own clients. The impact of Brexit was also addressed, with Thomas noting some 80 percent of SMEs had put no steps in place to hedge their currency risk ahead of the referendum.
Other insightful information surrounding hurdles to exporting, such as logistics, IP and translation, was also offered to attendees at the Food and Drink Wales event.
“Having easier access to the Middle East is very promising for Welsh businesses looking to expand internationally and this event has provided those current and burgeoning exporters with some key insights on making this area of business successful.
“We have seen reports of a number of high profile companies suffering massive profit losses as a result of poor FX management, showing how important it is for businesses to hedge appropriately. Our focus is on educating our clients about currency volatility so these situations don’t happen.
“There is currently huge support for Welsh businesses looking to expand internationally from the Welsh Government, Business Wales and UK Export Finance. We hope those in attendance will take advantage of these resources and the knowledge shared at the event to start their exporting journey with confidence, and with an FX strategy that safeguards against any needless financial loss.”
Godi Financial offer end-to-end international trade expertise and services encompassing FX risk management, currency exchange, finance and education. We’re a business set up to achieve one principal objective: to introduce greater certainty of outcome for businesses and individuals looking to trade internationally.
Originally established in 2012 as OSTCFX (being part of the OSTC Group), Godi is a brand that today has forged a reputation for unrivalled international trade expertise, outstanding service quality, and trusted, transparent market insights. As for the promise we make to all clients: we’ll help you plan, execute, and manage international transactions in the most cost-effective manner possible. We do this by offering a comprehensive range of services that help you manage risk, deliver against strategy, and respond in a timely fashion to market fluctuations.
As the first Wales-based FX company, it has saved its Welsh clients in excess of £750,000 versus their previous FX provider and processed more than £500 million of transactions.