UK SME manufacturers forced to wait longer for invoices to be paid
Smaller UK manufacturers are forced to wait nearly twice as long as their larger competitors for invoices to be paid, research from the Asset Based Finance Association (ABFA) - which represents the asset-based finance industry in the UK and Ireland - shows.
SME manufacturers waited an average of 67 days for invoices to be paid in 2015, whereas the largest manufacturing businesses, those with a turnover over £500m, waited an average of just 38 days.
The ABFA added that the difference in waits for payment between SMEs and the biggest manufacturers has increased over the last year. The delay in SME manufacturers receiving payment remained level at an average of 67 days, contrasting with the largest manufacturers who saw their average wait decrease bynine percent, down from 42 days in the previous year.
The ABFA suggests that the figures indicate the issue of late payment, and poor payment practices more generally, has become increasingly ingrained in business practice and is now endemic across many sectors.
In addition to late payment, the ABFA explains that it is increasingly common for large businesses to seek to impose extended payment terms in contracts with their SME suppliers.
Jeff Longhurst, Chief Executive of the ABFA, said: “Unfortunately, for many SMEs in the manufacturing industry, waiting more than two months to be paid is now a normal state of affairs.
“During the recession some businesses looked to increase their payment terms in order to give themselves breathing space in the tough economic climate. Unfortunately, in many sectors there’s been a cultural shift and delaying payment to suppliers is now common practice. Larger businesses need to treat their smaller suppliers more fairly.
“Late and extended payment times are deep-rooted issues in the manufacturing industry. This doesn’t just impact on the business in question; they need to pay their own suppliers and so there is a cumulative negative effect down the supply chain.
“Late payment of invoices and other poor payment practices have a significant impact on the UK’s competiveness and ability to attract further investment to the sector.”
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Ultium Cells LLC/Li-Cycle: Sustainable Battery Manufacturing
Ultium Cells LLC - a joint venture between General Motors and LG Energy Solutions - has announced its latest collaboration with Li-Cycle. Joining forces the two have set ambitions to expand recycling in North America, recycling up to 100% of the scrap materials in battery cell manufacturing
What is Ultium Cells LLC?
Announcing their partnership in December 2019, General Motors (GM) and LG Energy Solutions established Ultium Cells LLC with a mission to “ensure excellence of Battery Cell Manufacturing through implementation of best practices from each company to contribute [to the] expansion of a Zero Emission propulsion on a global scale.”
Who is Li-Cycle?
Founded in 2016, Li-Cycle leverages innovative solutions to address emerging and urgent challenges around the world.
As the use of Lithium-ion rechargeable batteries in automotive, industrial energy storage, and consumer electronic applications rises, Li-Cycle believes that “the world needs improved technology and supply chain innovations to better recycle these batteries, while also meeting the rapidly growing demand for critical and scarce battery-grade materials.”
Why are Ultium Cells LLC and Li-Cycle join forces?
By joining forces to expand the recycling of scrap materials in battery cell manufacturing in North America, the new recycling process will allow Ultium Cells LLC to recycle cobalt, nickel, lithium, graphite, copper, manganese and aluminum.
“95% of these materials can be used in the production of new batteries or for adjacent industries,” says GM, who explains that the new hydrometallurgical process emits 30% less greenhouse gases (GHGs) than traditional processes, minimising the environmental impact. Use of this process will begin later in the year (2021).
"Our combined efforts with Ultium Cells will be instrumental in redirecting battery manufacturing scrap from landfills and returning a substantial amount of valuable battery-grade materials back into the battery supply chain. This partnership is a critical step forward in advancing our proven lithium-ion resource recovery technology as a more sustainable alternative to mining, " said Ajay Kochhar, President, CEO and co-founder of Li-Cycle.
"GM's zero-waste initiative aims to divert more than 90% of its manufacturing waste from landfills and incineration globally by 2025. Now, we're going to work closely with Ultium Cells and Li-Cycle to help the industry get even better use out of the materials,” added Ken Morris, Vice President of Electric and Autonomous Vehicles, GM.
Since 2013, GM has recycled or reused 100% of the battery packs it has received from customers, with most current GM EVs repaired with refurbished packs.
"We strive to make more with less waste and energy expended. This is a crucial step in improving the sustainability of our components and manufacturing processes,” concluded Thomas Gallagher, Chief Operating Officer, Ultium Cells LLC.