For most small and medium-sized British exporters, the painful moment is rarely the order itself. It is the phone call a few days later, when the bank politely points out that the working capital required to fulfil it sits stubbornly the wrong side of an agreed credit ceiling. A career-defining contract becomes, almost overnight, a balance-sheet problem.
That is precisely the bind that Masters Speciality Pharma, a 41-year-old Hertfordshire specialist pharmaceutical company, found itself in last year after winning two sizeable orders from Saudi Arabia worth a combined £2.3 million. The remedy, as is increasingly the case for ambitious British SMEs eyeing the Gulf, came from UK Export Finance (UKEF), the government’s export credit agency, which stepped in with insurance cover against the risk of non-payment and gave HSBC UK the confidence to lift its credit thresholds.
The deal is the latest example of how government-backed insurance is quietly underwriting British SME ambition in one of the world’s most lucrative regions, and it lands at a moment when UKEF is leaning harder than ever into the SME exporter agenda.
A 41-year-old elstree exporter that punches above its weight
Founded in 1984 by Dr Zulfikar Masters OBE and based in Elstree, Masters Speciality Pharma is precisely the sort of business that ministers like to wheel out at trade receptions but that the wider public rarely hears about. The company specialises in making hard-to-source medicines available in markets that the big pharmaceutical multinationals often overlook, and now serves more than 75 countries across the Middle East, Asia, Africa and Latin America.
The Saudi contracts in question were not vanity wins. One covered the supply of a treatment for sickle cell disease, a debilitating inherited blood disorder that disproportionately affects patients in the Middle East and Africa. The other was for a specialised antibiotic used to treat life-threatening infections. In both cases, demand was urgent and the procuring authorities expected delivery on terms that demanded substantial up-front cash.
Therein lay the problem. Masters needed to pay its own suppliers well before the Saudi buyers were due to pay it, and the orders themselves were larger than its existing credit facility with HSBC UK. Without additional headroom, the contracts would have been physically impossible to deliver without straining the rest of the business.
How UKEF’s insurance unlocks the bank
The mechanism UKEF deployed is one that more British SMEs will encounter as the agency expands its remit. By insuring HSBC UK against the risk that the Saudi buyers fail to pay, the government effectively de-risked the additional lending the bank needed to provide. With UKEF on the hook for the downside, HSBC was able to raise its credit thresholds and free up the working capital that Masters needed to fulfil the orders, all without disrupting the company’s day-to-day operations.
It is a model UKEF has been deploying with growing frequency. The agency, which now has authority to provide up to £80 billion of support to British exporters, has set out a target of helping UK firms win more than £12.5 billion of new export contracts by 2029, with the Middle East firmly at the centre of that ambition. It forms part of a broader push that has seen UKEF step up support for SME exporters through faster-track products and higher auto-inclusion limits.
Tim Reid, chief executive of UK Export Finance, said the case for backing companies such as Masters extended well beyond GDP arithmetic. “British businesses like Masters Speciality Pharma are doing vital work, not just for the UK economy, but for patients around the world who depend on access to critical medicines. These are exactly the kind of exports we want to support,” he said. “UKEF is open for business, and we will continue to provide insurance and guarantees to UK exporters of all sizes as they take on new opportunities in the Middle East and across the world.”
The ceiling problem every sme exporter knows
For Simon Clarke, chief operating officer at Masters Speciality Pharma, the appeal of the arrangement boiled down to a frustration that is wearily familiar to any SME finance director who has tried to scale internationally. “A problem for SMEs like us is that you can get a certain amount of credit, but when you hit the ceiling you can go no further,” he said. “UKEF’s support made the difference – it meant we could take on these contracts that would otherwise have been beyond our reach or would have stretched working capital to the detriment of the rest of the business.”
That ceiling is one of the most reliable killers of British export ambition, particularly in higher-ticket sectors such as pharmaceuticals, engineering and capital equipment where customers expect long payment terms and suppliers want their money quickly. James Cundy, head of corporate and leveraged finance at HSBC UK, which already banks Masters in several markets, said the partnership with UKEF had allowed the bank to back the customer without flinching. “HSBC supports Masters Speciality Pharma in several markets across the globe. We know customers exporting overseas often struggle with freeing up working capital, so we were delighted to work with UKEF and increase our facilities to allow Masters Speciality Pharma to continue their vital work without disruption,” he said.
Why the middle east, and why now
The Middle East is becoming an ever more strategic plank of UK export policy. Saudi Arabia is the UK’s largest market for healthcare products and medical equipment in the region, and its Vision 2030 reform programme is creating sustained demand for everything from specialist medicines and medical devices to clean energy infrastructure, education services and advanced manufacturing. UK goods and services exports to Saudi Arabia ran into the billions of dollars in 2024, and ministers expect that trajectory to steepen.
For UKEF, the Masters deal is also a useful case study in selling its proposition to British SMEs who often assume export credit agencies are the preserve of defence primes and civil engineering giants. The agency’s recent push has included a £6.5 billion boost for British exporters and a tighter focus on the kind of insurance and guarantee products that suit smaller, faster-growing companies.
The takeaway for finance directors at Britain’s SMEs is straightforward enough. The Gulf contracts are there for the winning, the medicines, machines and services they want are squarely in British wheelhouses, and the working capital problem that has historically killed those wins can, increasingly, be solved with a phone call to UKEF and a sympathetic bank.
For Masters Speciality Pharma, the result is two delivered contracts, patients in Saudi Arabia receiving treatments they urgently need, and a Hertfordshire SME that has demonstrated, once again, that British specialist manufacturing remains very much open for business.
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Hertfordshire Pharma lands £2.3m Saudi contracts after UKEF steps in to plug working capital gap