DS-Concept prides itself on its international reach. With 20 offices on four continents, that reach is significant – a fact made further evident by the company’s website being available in 10 languages.
The 18-year-old Mönchengladbach, Germany-based company specializes in “cash-flow solutions,” primarily, short-term trade finance for importers and exporters. While the company works with clients in numerous industrial sectors, the seafood industry has been its fastest-growing segment over the past three years, according to DS-Concept U.S. CEO John Stillwaggon.
“Our U.S. business grew by about 30 percent top-line and by 50 percent bottom-line last year,” Stillwaggon said. “The reason I think we’re good at this is we’re very familiar with the logistics of the seafood industry."
Although DS-Concept has several qualities of a bank, the company's approach to the seafood space is decidedly unique and less trepidatious, explained Stillwaggon.
"We’ve got the resources of a bank, the capital of a bank, but we think like a trader. Whereas banks just see too much volatility in the seafood space and are not as willing to dig into it, we know about how dynamic the seafood industry is, about [how] a company can have a bad catch, or one-off product problems, or have had a deal go sour, and still be running a sound business. But all of those things are deal-breakers for banks,” he said. “Banks also prefer stable assets they can easily liquidate, while seafood is perishable, volatile, and seasonal – and we’re OK with that.”
The company has worked with seafood companies ranging from start-ups to publicly-traded entities with more than USD 200 million (EUR 161.9 million) in annual sales. Stillwaggon said his company has found the seafood industry to be in great need of the type of financing DS-Concept provides, which is short-term, asset-backed lending.
“We’re focused on trade finance – short-term revolving loans based on payable, sitting inventory,” Stillwaggon said. “Our niche is bridging the gap between buyers and sellers.”
Seafood companies often get stuck in chicken-and-egg situations, where an opportunity to go for bigger business pops up, but they don’t have the capital to make the deal happen, Stillwaggon said. And seafood buyers sometimes won’t pay upfront; they’ll require that they receive and inspect the product before transferring payment, he said.
“You can have this beautiful product that people want to buy, but you can’t make that happen because you don’t have the cash to keep your machines running while you wait for your big customer to receive and pay for your fish,” Stillwaggon said. “We will advance you money from when your boat leaves Iceland, China, India – or wherever – until it gets sold.”
DS-Concept typically works with fast-growth and asset-light companies, and more financially challenged companies, Stillwaggon said.
“In many situations, these are companies unlikely to be getting support from banks,” he said.
Not that DS-Concept needs to act alone, he added. While the firm often acts as sole financier on deals, it is also willing to work alongside other arrangements in place, such as banking facilities, Stillwaggon said.
In the past few months, DS-Concept has done several major seafood-related deals. The firm recently provided a USD 1.5 million (EUR 1.2 million) export factoring facility to an Icelandic seafood exporter and processor. The facility was structured in two currencies in order to allow the company to service both British and French markets. The loan allowed the company to increase the amount of product it processed to accommodate large-scale orders and therefore increase sales, DS-Concept’s manager of Icelandic business, Sveinn Reynisson, said.
“The client is a well-managed company known for the quality of its products. Their products are sought after in the U.K., where they are available in major retail chains,” Reynisson said. “Through the partnership with DS, they will be able to increase their turnover and strengthen the basis of the company.”
On 1 March, DS-Concept also announced it has supplied a USD 1.5 million (EUR 1.2 million) trade finance facility to a U.S. subsidiary of an Iceland-based seafood processor and exporter. The client, an importer and wholesaler of fresh and frozen Atlantic cod from Iceland, received a financial package that included non-recourse factoring and supply chain financing, with the intention of using the cash to support its financial independence from its parent company and fuel its growth with both new and existing customers in the United States and Canada, according to DS-Concept.
“The recently-established subsidiary was experiencing exponential year-over-year growth when it sought out DS-Concept to help accommodate its rapidly increasing orders,” according to Brian Dowd, the vice president of DS-Concept’s New York office. “As a seafood wholesaler selling to a diversified group of retailers and distributors on a revolving basis, the client required improved cash flow to continue its growth trajectory. DS-Concept’s trade finance facility provides a steady replenishment of working capital which puts the client in a position to maximize growth.”
Also in March, DS-Concept opened an office in Lima, Peru. The new office aims to assist Peruvian companies supplying the United States, Europe, the United Kingdom, and Asia.
“With an export-driven economy ruled by free trade, Peru has become a leading force in Latin America, marked by rates of high growth and low inflation unrivaled in the region,” the company said. “Located in the extreme west of South America, Peru is one of the most dynamic countries in the world and serves as a ‘regional hub’ for the surrounding territory, as well as a source of attraction for foreign investment due to its positive economic performance. With its inauguration, DS-Concept Peru opens the doors to the Latin American market with the goal of financing foreign trade for companies in the region.”
The opening of the Peruvian office is part of a larger strategy to expand DS-Concept’s service of the global seafood trade, according to Stillwaggon.
“There is an unmet need in the market we’re going after,” he said. “We think our business can be squared or even cubed.”