Exchange Rate Volatility: Fluctuating exchange rates impacted raw material costs, affecting export profitability.

HMRC Exchange Rate for customs value: To further complicate matters, the exchange rate was set by Her Majesty's Revenue and Customs (HMRC) at the point when the goods entered the country, which could either be higher or lower than the rate at the time of purchase. This unpredictability made it challenging to achieve consistent profitability

To ensure global profitability, our client utilised FX forward contracts alongside market orders.

Our client is a prominent international company specialising in the production and distribution of industrial valves for diverse sectors such as oil and gas, water management, and manufacturing. With a global customer base and a complex supply chain, they often face significant challenges related to maintaining profitability in their international business operations.

This case demonstrates the power of implementing FX forward contracts alongside market orders as a strategic tool to maintain consistent profitability in international trade. By proactively managing exchange rate fluctuations and aligning their rates with HMRC's requirements, the company successfully overcame challenges associated with unpredictable exchange rates.

This approach not only safeguarded their profitability but also positioned them for sustained growth and competitiveness in the global valve manufacturing industry.

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