“We have significantly strengthened our presence in over 20 of the fastest growing renewable energy markets in Europe. Many of them are countries of Central and Eastern Europe or not belonging to the European Union. The use of the deferred payment option is crucial for the development of the activities of installation and distribution companies that are just entering the market”.
Marcin Ślęzak, Chief Commercial Officer at Menlo Electric
KUKE supports the green transformation
Cooperation with Menlo Electric is in line with KUKE's policy of supporting domestic companies in their foreign expansion, and at the same time contributing to the green transformation of the Polish and European economy.
“We are delighted to support Menlo Electric, which, thanks to its rapid development, is playing an increasingly important role in providing users across Europe with access to the latest and more efficient renewable energy technologies. KUKE enables Polish companies not only to safely offer deferred payment terms in relations with domestic and foreign buyers, but our insurance and bonding facilities also enable exporters to conduct investments, acquisitions and increase their payment credibility in the eyes of their suppliers”.
Janusz Władyczak, President and CEO of KUKE
Financing through factoring
Financing under domestic and export factoring will be provided by KUKE Finance, a subsidiary of KUKE.
“We see the progressive concentration of entities operating on the photovoltaic market, and Menlo Electric, due to its position, is one of the most important beneficiaries of this process. We hope to finance the company itself on an increasing scale, and through it, smaller distributors and installation companies from this industry in Poland and abroad, so that the market continues to grow despite various adversities, such as the recently rising costs of devices”.
Konrad Klimek, President and CEO of KUKE Finance
Broader cooperation with the Polish Development Fund Group
The agreement is part of a wider Menlo Electric financing program, led by the Company’s CFO Marta Walendzewicz.
“As we observe disruptions in international supply chains, ensuring that we have constant access to the highest quality goods requires an adequate level of working capital. That is why our goal this year is to secure financing worth over PLN 90 million. The agreement with KUKE and KUKE Finance is a milestone in the implementation of the program. We are also talking about wider cooperation with the Polish Development Fund Group, which KUKE and KUKE Finance are a part of”.
Marta Walendzewicz, Chief Financial Officer at Menlo Electric
First use of a new export support facility
Boryszew will be the first Polish exporter whose loan for a foreign direct investment and its repayment have been insured with KUKE. The financing provided by BNP Paribas Bank will enable the development of the plant in Mexico with a line for the production of air conditioning hoses for electric car manufacturers. Thanks to the insurance, the risk carried by the bank was significantly reduced, giving it more capacity to provide financing for Boryszew’s foreign investments.
"Polish exporters and banks providing export financing have an excellent facility at their disposal, which allows them to conduct a more active and, above all, safe expansion on foreign markets. In the era of regionalization of production and shortening of supply chains, investments in countries that are located close to the main industrial centers - such as Western Europe, the USA or China - will gain importance. Global producers, wishing to increase their resistance to market turbulences caused, among others, by the Covid-19 pandemic, will choose sub-suppliers with production facilities located close to their key plants. Therefore, Polish companies willing to benefit from cooperation with the largest international producers will have to open plants on different continents".
Janusz Władyczak, President and CEO of KUKE
"Through the financing we provide, we enable Polish companies to use their full potential for growth both at home and abroad. Boryszew is an excellent example of this. Its plants are located in countries considered to be potentially the greatest winners of the upcoming changes in global trade, i.e. Mexico, Brazil, Southeast Asia and India By acting together with KUKE and using the global network of the BNP Paribas Group, we are able to make the investments of Polish companies in distant markets effective, safe and beneficial also for the entire Polish economy. Despite the considerable turmoil that hit the automotive industry during the Covid-19 pandemic, we believe that it has excellent prospects for a technological revolution resulting from electromobility".
Agnieszka Wolska, Vice President of BNP Paribas Bank Polska
Polish direct investments abroad
In the latest report of PFR TFI, PwC and KUKE on prospective investment directions for Polish companies, India is in the first place in practically all categories. In high places from non-European countries we can find, among others Israel, Chile, South Korea, Thailand, Malaysia, Morocco and Turkey.
According to the report, in 2020 foreign direct investments in the automotive industry exceeded USD 20 billion. For years, Poland has specialized in the production of car parts - this is our largest export position, giving us the 5th place in this category among the European Union countries.
Insurance of investments in Poland generating exports
Boryszew also invests in the development of domestic plants in the automotive industry. The funds granted by BNP Paribas under the second loan will allow the purchase of new production lines and equipment for the factory in Toruń, Poland, where air conditioning elements installed in electric cars will be manufactured. The value of this investment is EUR 20 million. Here, KUKE will guarantee the loan intended to finance a domestic investment that generates exports. It is worth noting that the share of exports in the revenues of the Boryszew Group has exceeded 60% in recent years, and the level of 20% is sufficient to obtain the guarantee from KUKE. This is another use of the KUKE guarantee to strengthen the production potential of the Polish exporter.
"We are conducting talks about supporting domestic and foreign investments of Polish companies from various industries. Thanks to our solutions, banks can offer financing more willingly and on a larger scale. For the exporter, this is a benefit in the form of lower security requirements or the possibility of securing higher credit and guarantee limits. Together with banks, we want to maintain the propensity of Polish companies to invest, at a time when the market environment causes great uncertainty and discourages allocating funds for development”.
Janusz Władyczak, President and CEO of KUKE
The Boryszew Group is the largest Polish manufacturer in the automotive industry. Every tenth car in the world and every fifth in Europe has parts manufactured in one of the Group's factories.
We are covering a long-term credit that Wielton offers to foreign buyers for the purchase of its products. The total value of the two contracts is EUR 3.3 million. Being protected by KUKE relieves the Polish exporter of the risk of non-payment, and additionally, should the company wish to strengthen its liquidity, it can easily sell the insured receivables ahead of schedule and receive cash. We are talking with Wielton about insuring further sales to African markets, where the company has already built a very strong position - said Adam Grzybowski from the Insurance and International Cooperation Department at KUKE.
This is not the first Wielton contract of this type using solutions offered by KUKE. Last year, sales to Ivory Coast were also insured. Polish exports to this country, despite the difficulties caused by the coronavirus pandemic, increased last year by 58 percent, and to Mali by 49 percent. In the case of Africa as a whole, Poland recorded an increase of 2.2 percent.
We are increasingly active in Africa, which is being "discovered" by a growing group of Polish exporters. This month, we signed a cooperation agreement with the Islamic Investment and Export Credit Insurance Corporation (ICIEC), which includes Mali and Ivory Coast, to jointly participate in export and investment projects of Polish entrepreneurs in this region. In the near future, further attractive instruments supporting exporters and the banks financing them will be added to our offer - emphasised Adam Grzybowski.
Last year, sales of goods to African countries accounted for 1.2 percent of all Polish exports and their share in the portfolio of long-term transactions insured by KUKE is similar.
BGK is purchasing receivables under the export contract concluded by a Polish company, Wielton, and thus supports the delivery of 25 Wielton trailers to the Ivory Coast. Without the instruments offered by the Polish development bank, expansion into some markets would be impossible or very difficult.
"Africa is a difficult but promising market where the Wielton Group sees the potential for further development. Every year, Wielton Afryka, a company established in 2017 in the Ivory Coast, successively increases its sales, entering new markets and dynamically expanding its sales network. The company is also focused on developing products that meet the needs of the African market. It offers vehicles with a solid structure and high-quality of workmanship, which have an optimized curb weight which lowers the operating costs, e.g. by reducing fuel consumption. Wielton Afryka focuses its operations on introducing new products and improving their availability, by streamlining the supply and service chain for its clients. Besides a wide range of products, it also offers support tools to its clients, such as financing of acquisition projects, efficient after-sales service and professional consulting. Fulfilment of orders placed by large clients and leaders in the transport industry in the African market as part of export sales financing is possible because of co-operation with financial institutions of the Polish Development Fund (PFR) which support Polish exports, namely Bank Gospodarstwa Krajowego (BGK), which co-operates with Korporacja Ubezpieczeń Kredytów Eksportowych (KUKE). This assistance ensures safe transactions with the client and contributes to the actual development of Wielton Afryka", says Artur Pietrzak, Director of Wielton Africa.
Other companies see the potential for a similar development and increasingly more often export their products to the African market. The 2019 figures show an approximately 25% increase in trade. Currently, the share of Africa in total exports of Polish goods is about 1%.
"We support clients on another, seventieth market. For the past two years, we have helped our clients in seven African markets. Africa offers massive potential. This is the fifth export destination, following Belarus, Russia, Ukraine and a group of EU countries, for which enterprises want to obtain financial support for their transactions from BGK. One of our tasks is to strengthen the position of Poland and Polish companies abroad. Considering the development potential of Africa, we will certainly support and encourage enterprises to expand their presence on this continent. For exporters, co-operation with us means, among others, greater transaction security and economic profits in the form of lower transaction costs and ensured financial liquidity", says Karol Jakubaszek, Manager at the Transaction Banking Department of BGK.
KUKE and Polish Investment and Trade Agency (PAIH) also offer help in increasing exports to prospective though seemingly exotic markets. Contract insurance by KUKE, combined with financing obtained from a Polish development bank, provides exporters with a key instrument to expand into promising, albeit still risky, African markets.
"For years, we have been providing cover for transactions involving export of investment goods and fast-moving consumer goods to many countries on this continent. We try to be as active on those markets as export credit agencies from other countries that have been present there for decades. We are constantly expanding our offer to provide solutions tailored to the individual needs of Polish exporters. Besides classic insurance of receivables or credit, we provide packages of contract bonds and counter-guarantees, export pre-financing bonds, or bonds for payment of receivables related to letters of credit. We also offer insurance for direct investments abroad, which can be a great security for an acquisition loan. Despite the pandemic, our exporters continue to sell on African markets and we hope to quickly close the transactions which are currently being negotiated, which we are ready to cover", says Adam Grzybowski of the International Insurance and Co-operation Department of KUKE.
Through a network of foreign offices, PAIH is able to provide the necessary information about the market and provide assistance in proper preparation for export.
"Ivory Coast is the most diverse and fastest-growing economy in West Africa. It owes its strong position to a well-developed logistics infrastructure: an international airport, the second, after Lagos, largest port on the Atlantic coast, and a railway line connecting the country with other markets in the region. All this means that this market is more and more frequently perceived by European companies as a gateway to their development in West Africa", says Thomas Amari, PAIH Foreign Trade Office Manager in Abidjan.
KUKE, PAIH and BGK provide support to exporters and create an opportunity to better compete on international markets. This way, companies such as Wielton are able to expand their operations into new markets and increase the attractiveness and competitiveness of their export offers.