Manufacturers urged to consider Flexible Purchasing

2 min read

Manufacturing SMEs are being urged to consider flexible contracts as a way of staving off escalating energy costs.

Control Energy Costs, which works with hundreds of companies across the UK, has seen a 50% rise in the number of firms looking at this form of ‘purchasing’ and is now offering industry the chance for businesses to pool their usage together as a collective.

This means they will be able to take advantage of Flexible Purchasing for the first time, as normally it is only reserved for organisations that tend to consume more than 10,000,000 kWh per annum and thus require a more sophisticated buying strategy.

“Flexible contracts are the alternative and certainly something industry - regardless of size of company - should be considering now. It could literally mean the difference between keeping production going or not,” explained Liam Conway, Head of Sales at Control Energy Costs.

“Energy suppliers will simply not entertain the idea of offering a flexible contract to a standalone client using less than that 10million threshold meaning a different approach is required to take advantage of this method.”

This approach is not new, in fact Control Energy Costs launched the ‘Wholesale Market Access’ basket in 2018 to offer this very method within a collective agreement.

It has proved successful for those involved, but the number of organisations wanting to take part has increased rapidly in the last six months and the business now has more than 50 companies involved in the framework with more waiting to join.

Recent sign-ups include global manufacturers, SMEs and construction businesses, who have - on average - seen a 150% rise in energy prices on what they were paying in 2021.

Packaging a Flexible approach to growth and innovation

Scunthorpe-based Skymark Packaging International, a leading manufacturer of innovative packaging solutions, is one of the firms benefitting from a Flexible purchasing agreement arranged by Control Energy Costs. The company has used this approach to forward purchase its entire energy allocation until 2026 and this is helping shield it from the escalating price rises threatening to bring industry’s emergence from the lockdown to a halt.

This is translating into the management being able to offer its global client base – spanning converter films, food, healthcare and pet foods – smaller price rises and allowing it to invest millions of pounds into developing new sustainable packaging in the form of SYMONO, SKYMONO P and SKYPAPR.

John Turner, Managing Director at Skymark Packaging International, commented: “CEC took time to drill down on our operations and explore what techniques it could use to offer us a more sustainable strategy and this led to us adopting a Flexible purchasing approach to gas and electricity some five years ago.

“This was one of the best decisions we’ve ever made and helped us consolidate all of our manufacturing operations on our site in Scunthorpe, whilst also supporting our growth plans going forward.”