S/C Financing – Sewing Thread and Fabric Manufacturer

Deal Summary

Product Line: International Supply Chain P/N Line
Funding Line Amount: $5 million
Company Type: Sewing Thread and Fabric Manufacturer
Industry Type: Textiles
Annual Revenue: $140 million
Location: Latin America

Our client’s core business is the manufacture and sale of fine cotton and polyester sewing thread. The company has multiple production facilities in Latin America. In addition to thread, the company also sells denim fabrics. Latin America plays a major role in the global textile industry and is a relevant exporter of denim worldwide, as well as a main supplier to the US. The region has strong potential in the apparel category as its middle class consumers are growing in spending power, with a reputation for high-quality manufacturing.

Challenge

Cotton prices are increasing due to growing global trade tensions, and cotton consumption is increasing at a record-breaking pace. Because of this, the world cotton reserves will be reduced by 1.6 million tons between 2018-12019. Despite these issues, the company has experienced double digit growth over the past two years and is expected to end 2018 on a high note, triggering the need for additional working capital.

Solution

The company has had stable profits and a low cost structure regardless of the fluctuations in the price of cotton thanks, in part, to its efficient purchasing policy. It also maintains effective control over operating and administrative expenses. Additionally, it has a competitive advantage by being one of the few yarn producers, which enables it to manage market prices. Based on the proven and projected success of this highly-efficient, experienced company, consumer demand within the market and the company’s competitive advantage and strong presence in the industry, ExpoCredit quickly approved the company’s request for the Supply Chain P/N line.

Benefit

Thanks to ExpoCredit’s support, the company now has the working capital it needs to continue to be a major player in LATAM’s strong textile market.

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