Vinmar Finance has recently celebrated its second full year of operations and is experiencing strong growth for its trade finance products, especially in Latin America.
A subsidiary within the Vinmar Group, a successful global marketer and distributor of petrochemicals and plastics, Vinmar Finance has established itself as a niche provider of trade finance products.
“We are not a bank and generally do not compete with banks,” says Thomas Wells, the company’s managing director. “Instead we seek niches in each market which is being underserved by the local financial markets.”
Operating through exclusive agents and employees, Wells says that Vinmar Finance has been successful in finding those niche opportunities. In Brazil, Mexico and Chile, for example, Wells said the company has done well in providing short-term import lines of credit for manufacturers who seek transactional financing for specific opportunities which allow them to earn profits which otherwise would be lost.
“In these instances we are an incremental provider of trade finance,” Wells says. “Our customers are generally strong middle market companies who have bank lines secured by land or fixed assets but whose need for working capital exceeds the appetite of the local financial market. By financing their imports on terms of 120 to 180 days, Vinmar Finance can often help these manufacturers achieve higher profitability.”
“We are also providing selective medium-term financing,” Wells adds. “We are a guaranteed lender of the Export-Import Bank of the United States. But we also can provide some medium-term financing for products not eligible for Ex-Im Bank or for down payment financing.”
Recently, the company provided down payment financing to an Ecuador banana exporter who had obtained a Hermes loan for the building of a corrugated box facility, Wells says, and this week is closing a medium term facility in Mexico for the import of equipment from the US.
“The Mexico deal actually qualified for Ex-Im Bank,” Wells says, “but we decided to do it without Ex-Im support because of the short time frame.”
Despite the Vinmar Group’s focus on petrochemicals and plastics, Wells says the finance subsidiary is not limited and is willing to consider a vast array of products.
“We have financed everything from fertiliser to notebooks to dietary supplements,” Wells says. “Because our parent company has been successfully operating in emerging markets for more than 27 years, we understand that good business opportunities are not limited to traditional glamour products.”
The only time the finance subsidiary limits is focus to petrochemical products is on pre-export and project finance transactions in which the Vinmar Group is a direct party.
“Our Special Projects group is very active in developing large scale petrochemical projects in which the Vinmar Group will participate as offtaker,” he says. “They also get involved in large pre-export transactions. Vinmar Finance will sometimes finance these transactions or will assist the Project’s Group in working with the project finance lenders.”