Export Finance and Insurance Corporation (EFIC) has provided a performance bond to support a major new export contract secured by specialist food technology company Gold Peg International Pty Ltd (GoldPeg).
EFIC is the Australian Government’s export credit agency helping Australian companies grow their business overseas.
The Victorian company, a long-term EFIC client has won a contract to supply food processing equipment as well as control hardware and software to a dairy cooperative in Europe.
Under the contract, GoldPeg was required to provide a performance bond for 50% of the contract value. As GoldPeg needed this cash for working capital for its growing business, EFIC assisted GoldPeg by issuing the bond to the buyer.
According to GoldPeg’s Managing Director Simon Donnelly, their business focuses on exports sales and many of their overseas buyers insist on performance bonds, which can put significant strain on their cash flow.
He adds that EFIC’s bonds help them keep their working capital for delivering on their contracts.
Andrea Govaert, EFIC’s Executive Director, SME says that GoldPeg is an Australian small business in a niche area, which is succeeding internationally.
Supporting the company’s continued expansion of its overseas market, she comments that bonds are often a large proportion of the value of export contracts and can present real obstacles for smaller exporters trying to grow their businesses overseas.
She adds that EFIC’s relationship with GoldPeg is a great example of how they can assist SME exporters with bond facilities.
Since 2002, EFIC has provided six performance bonds on behalf of the company, supporting export contracts worth $7 million.