Exported Success:
High-altitude Coffee Conquering Markets
How Our Financial Factoring Solution Boosted the Growth of an Agricultural Company in Honduras
Product
Factoring
Transaction
$700,000 USD
Industry
Agricultural
Country
Honduras
Company founded by the strategic association of cooperatives in the western region of Honduras, whose coffee has the best guarantee and quality control systems. Its principal target market is Europe, exporting to countries such as the Netherlands, Switzerland, and Germany, with average sales of 20 lots of its main products (Coffee, Cocoa, and Pepper) in the high season (October – April). Furthermore, the administration guarantees transparency and the improvement of the quality of life for each of the associated cooperatives.
Client Overview
Top destinations for Honduran coffee exports
The main importers of Honduran coffee during the period 2021-2022 were: United States, Germany, Belgium, Italy, and Japan, countries that accounted for 67.7% of the total exports.
In addition, Colombia, Canada, United Kingdom, France, and Sweden are also included.
(Percentage values)
Adhering to quality standards
Due to the increase in Honduran coffee exports abroad from October 2021 to July 2022, the company needed to meet the demand by optimizing its production processes. This involved complying with the quality standards agreed upon with regulatory entities such as UTZ, Fair-Trade—USA, and Rainforest Alliance, among others. As a company with mainly international sales, the payment times agreed upon with its clients and the transit of merchandise tend to be extended. Therefore, an injection of capital is necessary to meet all the market demands, remain competitive in the industry, and strengthen and expand its commercial relationships.
"As a company with purely international sales, the agreed payment terms with our clients and the transit of goods tend to be very prolonged. Therefore, an injection of capital is necessary to cope with all market demands, remain competitive in the industry, as well as strengthen and expand our business relationships." - Shareholder and Commercial Financial Manager.
Account receivable financing
The solution came from ExpoCredit, who provided a $700,000 USD factoring line. With this factoring line, it allowed them to overcome cash flow issues in their company and meet the demands and compliance standards of the international market.
With this financing, the client managed to increase their sales volume and meet the high demand for exports in the industry.
