Uncertainly caused by the Sino U.S. trade war is creating opportunities in the Chinese seafood sector for trade finance firm Tradewind.
The Germany-based company has announced the closing of a USD 6 million (EUR 5.1 million) “export factoring facility” for a Fujian-based seafood processor and exporter with funding used towards operating expenses and the fulfillment of orders.
With the facility in place, the company is better positioned to explore new markets and to better face the risk of additional trade tariffs, Nancy Zhu, head of international trade at Ningde Xia Wei Foodstuffs Co, told Seafoodsource.
Ningde Xiawei scored significant growth in profitability and trade volume in 2017, but liquidity remained limited – more than 80 percent of its balance sheet was comprised of accounts receivable and inventory.
“Tradewind is a reliable partner for seafood processing companies like us,” said Zhu. “With their support, we regain the liquidity for operations, and are able to provide OA terms to our customers to get more orders. In addition, their finance can increase or decrease as our business fluctuate. Therefore, we don't waste the finance and utilize every penny for the business.”
Tradewind plugged the cash flow gap at Zhu's firm by purchasing the company’s accounts receivable and funding it upon delivery to the company’s buyers according to Jason Wang, VP of Sales at Tradewind’s Shanghai office.
“Our financing has enabled the client to execute a strategy to minimize foreseeable trade tariffs and complete orders on time while exploring new territories,” Wang said.
Tradewind is able to scale its funding in line with sales, he added.
