A Northumberland manufacturer is seeing a boost in business with data centre companies after tapping into a £3.5m funding package.
Based in Prudhoe, Salem Tube has been supplying tubes for heat-transfer and heat-exchange, which are essential for industrial cooling systems, since 1992. It now exports to clients in over 40 countries, predominantly to those in the energy sector. More recently, Salem has been taking on more contracts with data centre developers working in the AI and cloud storage sectors, on the back of a huge growth in each sector. Data-centres have high energy requirements and cannot function without cooling equipment.
Now, to help it take advantage of the growing markets, Salem has agreed a financing package worth £3.5m, provided by Santander Ƶ and backed by the Government through Ƶ Export Finance (ƵEF). The funding has given the business the capital it needs to take on larger data-centre contracts and to establish itself as a supplier in the emerging sector.
Salem Tube International’s most recent accounts, filed last June, cover the year to September 2023 and show the firm grew turnover from £14.7m to £18.8m, while also doubling operating profits from £513,054 to £1.05m. Staff numbers also grew from 28 to 32.
ƵEF offers its General Export Facility (GEF) scheme through all major Ƶ banks and a range of non-bank lenders, allowing exporters to access working capital facilities up to £25m. The deal marks the latest phase of Salem’s partnership with ƵEF, which has supported the business for over five years, having previously helped it win new contracts in Africa. The funding is also helping Salem to secure a range of overseas contracts in the US and Middle East, and it is now considering taking on more employees.
Pat Kendell, senior export finance manager for North East England at ƵEF, said: “Salem Tube is a perfect example of how businesses in the north are adapting and thriving in emerging sectors. This deal shows how government backing can help established manufacturers to seize new opportunities in the industries of the future. By supporting Salem Tube’s move into the data-centre market, ƵEF is helping to safeguard jobs and boost exports in the North East.”
Mark Ling, head of trade and supplier finance, Santander Ƶ, said: “We are delighted to provide further support for Salem Tube’s growth. Our partnership and collaboration with both Salem Tube and ƵEF demonstrates our commitment to the international growth of businesses in the Ƶ.”
