About Wrexham Wire
Wrexham Wire is the premium UK-based manufacturer and supplier of wire, supporting the automotive, construction, bedding and furniture industries, among many others. The company employs around 85 people at its North Wales site and has capacity to produce 75,000 tonnes of wire per year.
Wrexham Wire serves customers both here in the UK and across Europe supplying bespoke technical wire solutions to support specific applications. The company also provides sophisticated supply management solutions to ensure the customer’s wire products are available where and when they are needed in the ongoing manufacturing process.
Energy Purchasing Issues
Wrexham Wire, formerly part of the Caparo Group, was bought by RCapital in November 2015. RCapital inherited Caparo Group gas and electricity supply contracts which were higher than the current market rate, so sought our help to review the contracts and to try to reduce cost. Energy consumption at Wrexham Wire typically costs in the region of £600,000 per year, so is a significant portion of the company’s operating budget.
Our starting point was to negotiate with Wrexham Wire’s incumbent supplier. The company agreed to reduce the gas charges from November 2015 until the contract expiry date of March 2016, enabling Wrexham Wire to reduce energy spend at the very outset.
We then set out to source the best ongoing energy supply contracts for Wrexham Wire, balancing the need to reduce cost with the need to have the right contract terms and conditions to support their operational needs.
The main barrier to overcome related to Wrexham Wire’s credit history. Although the company has a long and successful trading history, its purchase by RCapital meant it was officially a new company without a formal credit history. As a result, energy suppliers demanded fairly hefty security bonds of around 25% of the annual contract value.
However, our experience in the energy industry and our knowledge of the supply process meant we were able to reduce the cost of the security bond and negotiate more favourable conditions for Wrexham Wire.
We agreed a keenly-priced 12 month energy contract on behalf of Wrexham Wire, enabling the company to save more than 7% in the first year while building up a credit history which will put them in an even stronger negotiating position when the contract is due to expire.
We are now working alongside Wrexham Wire to manage their energy contract efficiently. This will entail a monthly invoice validation exercise to monitor consumption and charges.
What the client says:
“We knew that if we carried on with our original contract that we would end up paying more than necessary for our gas and electricity supply. The team at IEC helped us to understand the energy contracts we had inherited and then worked closely with us to ensure our best interests were the priority when negotiating with our existing and new suppliers.
“It was great to work with people who clearly understand the business energy market and who we can trust to give sound advice which ultimately supports our business objectives and saves us money.”