Finance solutions for Australian contractors

Export Finance and Insurance Corporation (EFIC), the Australian Government’s export credit agency, offers specialist finance solutions that helped pipe suspension designer and manufacturer Binder fulfil a contract for Australia’s Gorgon LNG project.

Some smaller businesses may have all the expertise, products and specialist knowledge to fulfil a new business contract, but meeting all the terms and conditions under the contract can sometimes present financial hurdles. Often just meeting the contractual requirements can put a strain on a company’s working capital and risk future growth plans.

This was the situation faced by Binder Group Pty Ltd, one of Western Australia’s largest designers and manufacturers of proprietary and custom-built pipe suspension solutions for the oil and gas, power generation, petrochemical, mining and mineral processing industries.

The company needed to provide a warranty bond for the supply of pipe supports for the Gorgon LNG project, Australia’s largest single resource project and one of the world’s largest natural gas projects.

Export Finance and Insurance Corporation (EFIC) provided a warranty bond for $547,000 to cover Binder’s warranty obligations for the Gorgon project. EFIC can assist eligible Australian-based companies, such as Binder, with financial solutions for eligible export and onshore export-related contracts. These are contracts where the goods or services produced are exported from Australia but the companies that are part of the contract supply chain may not themselves be exporters.

Warranty bonds are a common contractual obligation for construction projects involving the supply of goods and/or services for export and export-related purposes.

The bond enabled Binder to use its existing bank guarantee lines to fund additional LNG export projects.

“This is a prime example of how EFIC can help contractors and subcontractors involved in export-related deals win more business,” said Leela Hanson, EFIC’s Director, SME & Mid Market, WA and SA.

“We are able to assist eligible Western Australian companies working on major export-related resource projects with financing solutions to supplement what their banks offer.”

Binder managing director Paul Bennett said: “EFIC’s support was crucial in helping us protect our obligations as a supplier to this landmark LNG project and also helps us secure future LNG deals, thereby supporting our future revenue and profit growth.”

Visit www.efic.gov.au for more information.