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Indigenous foods exporter booms with cash flow finance

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A boom in local and overseas demand for unique foods has been both exciting and challenging for Robins Foods, manufacturers of a range of indigenous Australian food products.

Founding directors Juleigh and Ian Robins began their association with indigenous foods in 1986 and have been manufacturing and marketing their product to Australian and overseas markets since 1998.

Their brand of chutneys, sauces, dressing and herbs - "Outback Spirit" - which retails in major Australian supermarket chains Coles and Woolworths, as well as Sainsburys in the UK, has generated the company's enormous growth. In 2003-04, the company grew by 40%.

Juleigh and Ian Robins were on the one hand thrilled with the overwhelming interest in their unique fare, but knew the company's cashflow as it stood could not support significant expansion.

“When the range took off, we were growing faster than our capital base, which can create problems," said Juleigh Robins.

A growth explosion can present enormous challenges in meeting production costs. Payment cycles of big businesses such as Coles, Woolworths and Sainsburys tend to stretch 30 day terms closer to 60 to fit in with their system of accounts. This presents numerous problems to smaller suppliers like Robins Foods - especially during a time of growth when steady cashflow is crucial.

To help redress the imbalances caused by rapid growth, along with concentrated purchasing periods (dictated by harvest periods of ingredients) and the late payment cycles of Robins' larger customers, the company looked to factoring - a cashflow solution they had previously experienced.

Factoring provides a flexible source of finance by allowing businesses to unlock the funds tied up in unpaid invoices - leading to an immediate injection of cash - but aligned with the business' performance and growth.

"We are very comfortable with factoring as a cashflow solution. It allows us to grow within our means," said Juleigh.

Indigenous food products have only recently moved into mainstream markets, so uncertainty around the viability of the products meant that the more traditional banks were not interested in the concept and initially declined to offer Robins Foods financial assistance.

With no support from the banks, Juleigh Robins looked further afield at a range of debtor cashflow solutions, which led to Bibby Financial Services .

Bibby Financial Services (Australia) is a full service debtor finance company and the only company in Australia that provides specialist export factoring.

With Bibby offices throughout Europe, UK, and the USA and New Zealand, Bibby can service Australian clients exporting to these key markets, helping them grow their overseas business profitably and with confidence.

Robins Foods send a copy of their invoices to Bibby who then converts up to 90% of the unpaid invoices (up to 80% for exported goods) into cash within 24 hours.

As the invoices are paid by Robins' customers, the remaining 10-20%, less a small service fee, is transferred from Bibby to Robins.

The Bibby international network of operating companies can benefit Australian exporters by removing the hassle that can come with dealing with overseas customers.

Clients can opt to use the services of the Bibby in-house multilingual team to chase and collect outstanding invoice payments from overseas customers.

"From our first contact, Bibby set out to really understand our business, which is admittedly different to most," said Juleigh Robins.

Robins Foods' products are made from ingredients grown and gathered by traditional indigenous methods.

The company has established unique supply chains with native Aboriginal suppliers, which protect the rights of the suppliers, and for which they have received UN recognition.

Since indigenous produce is seasonal and must be harvested and stored at the peak time, Robins Foods are required to purchase large quantities at certain times of the year to ensure they have sufficient ingredients for year round production.

Suppliers need to be paid at the time even though the produce may be stored for months before production processes begin and any income is received.

"Invoice factoring gives us flexibility and security. One of the best things about that is that we have been able to establish strong relationships with our suppliers, because they know they will be paid,” said Juleigh.

"Bibby gives us fantastic service and great support. Their customer service standards are exceptional.

"What we particularly like about Bibby is the easy access we have to senior people who are able to make quick decisions. When things are moving as quickly as they are for us at the moment, this is crucial. We need to be able to seize any opportunity that comes our way.

"Managing a business is a balancing act - growing a business and into overseas markets at that, even more so. Bibby has helped us keep the balance over a very busy period.”

Robins Foods won the 2003 Rabobank Agribusiness Award for Excellence, Rural Industries Research & Development Corporation Agribusiness Value-adding Award.

Juleigh Robins was also a Victorian finalist in the 2003 Telstra Business Women's Awards, Westpac Group Business Owner Award.

Juleigh has also written two native food cookbooks, Wild Lime and Wild Classics, published by Allen & Unwin.

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