BGK and KUKE support Wielton’s contract in Africa
Bank Gospodarstwa Krajowego has supported an export transaction to another international market, the Ivory Coast. Wielton S.A. will sell its trailers there, and the transaction will be insured with KUKE. Now BGK is purchasing receivables under this contract. For Wielton, the bank and KUKE, it is another joint transaction on this continent.
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.