In a series of blogs, we talk about funding opportunities NOM has to offer healthy and mature SMEs. In this blog we explain by means of a practical example for whom and for what exactly a growth funding is meant.
No, NOM is not only there for startups and scale-ups. In a previous blog we have already emphasized this. NOM is also there for northern SMEs. No wonder: after all, SMEs are the beating heart of the regional economy. Both in terms of the number of companies and their contribution to employment, innovative strength and livability in the region.
In short, NOM can be of significance to SMEs in every phase of their development. A condition is that the enterprise really adds something to a more sustainable, smarter and healthier Northern Netherlands. For healthy and mature SMEs, for example, we have various funding options available, including growth funding. As the name suggests: with such funding we support companies in their growth plans.
Advance
A recent example is Drenth Holland of Oude-Pekela, founded in 1931 and still a true family business. Drenth Holland is a weaving company that makes so-called technical fabrics from metal - or plastic threads, particularly for the process industry. Customers are located in more than 35 countries around the world. The fabrics are used, among other things, in the drying of milk powder, the production of wood panels and the production of security paper for passports and banknotes.
Drenth Holland has always been profitable and intends to remain so in the future. A few years ago, therefore, the question arose: do we continue as is or do we want to continue to grow? The company chose the latter, of course. So a growth plan was made. In order to be able to guarantee quality and quantity in the future, all but one of the old machines had to be replaced by an innovative, automatic weaving machine.
The extremely expensive machine was purchased in 2021 and partly financed from its own resources. At the same time, a production line was developed together with the machine builder so that new production runs could be prepared outside the machine. This was previously not possible, which meant that the actual production of the fabrics sometimes stopped for some time.
The unruly practice
However, the old location lacked sufficient space to install the new weaving chair and production line in the best possible way. Therefore, in 2022, a 10,000-square-meter plot of land was purchased on Industrial Estate West in Oude Pekela. It was to accommodate two production halls, with an office in between. In the spring of 2023, the first production hall was ready and the new weaving chair and production line were installed. In short, the first production runs could be started.
Drenth Holland's apparel division initially remained active at the old location. Only when the second production hall was built would the rest of the organization move to the new location as well. But practice was recalcitrant. In terms of communication and coordination, having two locations turned out to be far from ideal. Eventually it was decided to merge the two locations early. Only: this required additional investments.
The criteria
Through a business advisor, Drenth Holland was put in touch with the NOM in April of this year. Whether we might be able to do something for the company? Yes, we certainly could. It is an SME that suits us and above all meets the criteria to qualify for growth funding. First of all, it is based in the northern Netherlands and, in addition, it is very distinctive. It is, as we call it, a key company. That is, the company profitably supplies a product that is hardly ever made in the Netherlands.
Is Drenth Holland innovative? We think so. Especially since the company has the most modern machinery in its field in Europe or perhaps even in the world. And not unimportantly: Drenth Holland itself had developed a well thought-out growth plan. Of course, we review the plan carefully, but we are not going to co-write it. The company must devise and execute the growth plan itself.
Yes, we provided Drenth Holland with the growth funding. That includes more than just capital, by the way. Because what distinguishes NOM from many other financiers is the broad support. Think of access to our large network of specialists, other companies and potential partners.
Increase exports
For example, Drenth Holland had indicated they were looking for opportunities to increase exports. We then put the company in touch with our specialists who support internationally active SME entrepreneurs. Just to spar together. What other international markets suit us and how do we approach them?
In other words, thanks in part to the growth funding, Drenth Holland can move forward for quite a few years and continue to grow nationally and internationally. Indeed, the complete move to the new premises and the optimization of the machinery will enable the company to double the possible output.