Cement Distributor

Borrower Overview
 

TriLinc has provided financing to a cement producer and distributor in Kenya. Incorporated in 2008, the borrower runs a state-of-the-art cement grinding facility that transforms cement clinker into finished Portland and Pozzolanic cement varieties. The borrower’s clients range from homeowners to large project sponsors engaged in small, medium, and large-scale construction activities. The borrower is the only African majority owned cement manufacturer in Kenya, and as a private company, lacks adequate access to timely and competitive financing. With the objective of becoming the leading cement producer and distributor in the greater Sub-Saharan Africa region, the borrower was seeking short-term credit to purchase additional cement clinker inputs to meet increasing demand for its finished cement products. The borrower anticipates that TriLinc’s financing will enable it to execute on its growth objectives, support increased employment opportunities, and further develop its reputation as a reliable and high-quality cement producer and distributor.

 


Market Overview

Kenya is classified as a lower middle-income country by the World Bank.1 Between 2010 and 2014, GDP growth rates averaged approximately 6.0%.1 Kenya’s main exports are concentrated in tea, horticultural products, coffee, petroleum products, fish, and cement.2 Conversely, the country’s main imports are focused in machinery and transportation equipment, petroleum products, motor vehicles, iron and steel, and resins and plastics.2

Kenya meets TriLinc’s country standards for its performance across relevant growth, stability and access metrics.3 As the fourth largest economy in Sub-Saharan Africa,4 the country benefitted from the estimated $37 billion in net foreign direct investment that flowed into the region in 2014.5 Robust domestic demand across Sub-Saharan Africa helped spur GDP growth to 4.6% in 2014.6 Looking ahead, overall regional GDP growth is projected to strengthen to 5% by 2017.6


Additional Sustainability & Impact Highlights

  • Utilizing state-of-the-art roller press, separator, energy storing capacitor bank, and automated operation technologies, the borrower’s facility is considered the most energy-efficient cement grinding plant in the region.
  • Mindful of its impact on the environment, the borrower is in the process of implementing an ISO 14000 Environmental Management System and monitors its particulate matter emissions on a daily basis to ensure adherence to World Health Organization guidelines. Additionally, the borrower proactively benchmarks, monitors, and tracks its CO2 emissions on a monthly basis with the intent to improve the level of plant emissions. The borrower also funds tree seedling plantings as an emission offsetting initiative.
  • The borrower provides comprehensive benefits to its employees, including payment of school fees for employees’ children, retirement plan matching contributions, group life insurance, subsidized meal plans, annual medical examinations, and daily employee transportation.
  • The borrower actively contributes to its surrounding communities through supporting sustainable health, environmental, educational and recreational initiatives.

1The World Bank, World Development Indicators Database, Kenya, 2015. 2CIA, The World Factbook, 2015: Kenya. 3There is no assurance that our investment in this company or this market will be successful. 4The World Bank, World Development Indicators Database, 2015. 5The World Bank, Data, Sub-Saharan Africa, 2015. 6The World Bank, Global Economic Prospects, June 2015.

The above information is as of the initial date of investment: September 23, 2014.

This borrower is no longer in TriLinc’s portfolio.

TriLinc originally performed an SDG mapping exercise in December 2017 to map all of our borrower companies, both current and exited from our portfolios, to specific SDGs based off of business activity. TriLinc’s official SDG alignment methodology was not finalized until June 30, 2018. For borrowers that had exited TriLinc’s portfolios prior to this time period, the selected SDGs for these borrower are a reflection of what TriLinc believes would have been the SDG alignment if 1) the SDGs had been in effect and 2) TriLinc had integrated the SDG alignment while the company was in the portfolio. The SDG mapping presented does not include input from Investment Partners or borrower companies given that the companies were no longer in the portfolio when the alignment was finalized.

RISK FACTORS
There is no guarantee that TriLinc’s investment strategy will be successful. Investment in a non-listed LLC involves significant risks including but not limited to: ownership is restricted; no secondary market; limitation on liquidity, transfer and redemption of ownership interest; distributions made may not come from income and, if so, will reduce the returns, are not guaranteed and are subject to management discretion. TriLinc selects investments and conducts operations on behalf of its clients, and will face conflicts of interest. Investment with TriLinc is not suitable for all investors. Securities Offered through CommonGood Securities, LLC, a member of FINRA and SIPC.

An investment with TriLinc carries significant fees and charges that will have an impact on investment returns. Information regarding the terms of the investment is available by contacting TriLinc. This is a speculative security and, as such, involves a high degree of risk. Investments are not bank guaranteed, not FDIC insured and may lose value or total value. Some investments may have been made in an investment vehicle that is no longer open for investment. The highlighted investment may or may not have been profitable. There is no guarantee that future investments will be similar.

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