© 2010 Konecranes Plc. All rights reserved.
Matti Malminen / Trade Finance
Sitra / December 2013 Matti Malminen
© 2011 Konecranes Plc. All rigths reserved. 5.12.2013 2 Corporate presentation 2013
OUR COMPANY IN NUMBERS
EQUIPMENT IS
61% OF TOTAL SALES
ACTIVE IN ALMOST
50 COUNTRIES
609 LOCATIONS WORLDWIDE
12,100 EMPLOYEES
€2,170 MILLION IN SALES
IN 2012
MAINTENANCE CONTRACTS
COVERING MORE THAN
418,000 EQUIPMENT OF DIFFERENT
MAKES
SERVICE IS
39% OF TOTAL SALES
1,73 MILLION ANNUAL
SERVICE CALLS
© 2010 Konecranes Plc. All rights reserved.
WORLD’S LARGEST GOLIATH CRANE
384 ft.
117 m
689 ft.
210 m
25.10.2012 Trade & Export Finance / Matti Malminen / Konecranes 3
© 2011 Konecranes Plc. All rigths reserved.
TWO KONECRANES STS CRANES ON THEIR WAY FROM CHINA TO MOZAMBIQUE (12.2.2013)
SHIPMENT ON
DECK NOT
ALLOWED!
© 2013 Konecranes Plc. All rights
reserved.
CONTAINER TRAFFIC
5
SOURCES: Drewry Container Port Insight (latest data point July 2013)
Annual container handling volume Monthly container handling volume
-25 %
-20 %
-15 %
-10 %
-5 %
0 %
5 %
10 %
15 %
20 %
25 %
Change Y/Y
0
100
200
300
400
500
600
700
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Million teu
© 2010 Konecranes Plc. All rights reserved.
TRADE FINANCE
WHAT IS IT AT Konecranes?
Trade & Export Finance – sounds fancy…
• How to make sure that Konecranes is paid by the foreign Buyer!
• Advance Payments, Letter of Credits (D/C or SBLC)
• Bank Guarantees (bonds)
• Payment time to Buyer without any extra risk to Konecranes
– ECA:s, EBRD, NIB, IFC, banks
• Finance company products (rental, leasing)
• Trade policies
Matti Malminen / Trade Finance
© 2010 Konecranes Plc. All rights reserved.
HOW TO COVER CREDIT RISK OF THE BUYER
Know Your Customer!
Credit Policy!
1. 100 % Advance Payment
2. Confirmed Documentary Credit / Locally issued Bank Guarantee/
3. Confirmed Standby Letter of Credit
4. Unconfirmed Documentary Credit / Buyer’s direct Bank Guarantee
5. Documentary Collection
6. Payment on open account terms
(non payment risk of the Buyer can be covered by Credit Insurance)
Matti Malminen / Trade Finance
© 2013 Konecranes Plc. All rights reserved.
Export Finance
Main principle
Risk of the Buyer has to be covered
by “third parties”!
1. Export Credit Agency (ECA)
• Finnvera Plc in Finland, EKN in Sweden
2. Multilateral Finance Institution
• NIB (Nordic Investment Bank)
• EBRD (European Bank for Reconstruction &Development)
• IFC, Asian Development Bank, BNDES, etc etc
3. Credit Insurance Company
4. Buyer’s Bank
• Deferred Payment D/C, Bank Guarantee
Trade & Export Finance, Matti
Malminen 8
© 2013 Konecranes Plc. All rights reserved.
FINANCING – RELATIONSHIP WITH BUYER
• Loan from international Bank with Export Credit Agency (ECA) support
– ”Seller’s role is to be part of the Buyer’s procurement team”
• Key questions in the first meeting
– Which banks in Europe knows the Buyer?
– Has the Buyer concluded ECA –cases in the past (Finnvera, Finland, EKN,
Sweden)?
– Are the financials available?
• Open and explain all finance charges (Buyer will pay all charges)
• Agent Bank (Lender) should
– have experience with the relevant ECA
– be easy to access by the seller and the buyer
– be ready to to meet the buyer at an early stage (also ECA:s visit is appreciated)
Trade Finance / Matti Malminen
5 December 2013 9
© 2010 Konecranes Plc. All rights reserved.
Repayment
Supply Contract
(Delivery)
Credit
Agreement
Export credit guarantee
Interest equalisation
Refinancing
Agency agreement
BUYER BANK
BUYER’S CREDIT
Matti Malminen / Trade Finance
Loan proceeds
© 2010 Konecranes Plc. All rights reserved. Matti Malminen / Trade Finance
DEFERRED PAYMENT DOCUMENTARY CREDIT (D/C) 360
DAYS
11
5. SHIPMENT
1. CONTRACT $150,- (CRANEVALUE $100+ INTEREST
$50)
2. D/C
APPLICATION
$ 150,-
BUYER
ISSUING BANK
3. D/C ISSUANCE
8. SHIPPING DOCUMENTS
EXPORTER
ADVISING BANK /
CONFIRMING BANK
9. SHIPPING DOCUMENTS
DEBIT $ 150
after 360 d
4. ADVISING
(Confirmation)
6. Shipping documents
+ invoice $ 150,-
7. Payment of $150
(discounting)
./. interest for the
deferred payment
time apprx. $ 50
=> Net proceeds $100
© 2010 Konecranes Plc. All rights reserved. 12
Trade Finance => Exotic countries!
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