Construction Materials Distributor

Borrower Overview
 

TriLinc has provided financing to a construction materials distributor in South Africa. Established in 2010, the borrower imports and distributes piping, fittings, and related hardware and tools for its retail and commercial hardware customers throughout South Africa. The borrower has positioned itself as the country’s exclusive distributor of products from a globally recognized piping systems industry leader with over 60 internationally recognized certifications and a market footprint in more than 100 countries. The borrower reinforces this high level of product quality by importing and distributing products that have been certified by the South African Bureau of Standards. TriLinc’s financing provides the borrower with timely and flexible short-term liquidity for the import of plastic piping and fittings inventory to support business expansion efforts. The borrower anticipates that these initiatives will also lead to increased employment opportunities.

 


Market Overview

South Africa is classified as an upper-middle income country by the World Bank.1 Between 2010 and 2014, annual GDP growth rates averaged approximately 2.4%.1 South Africa’s main exports have traditionally been concentrated in gold, diamonds, platinum, other metals and minerals, and machinery and equipment.2 Conversely, the country’s main imports have been focused in machinery and equipment, chemicals, petroleum products, scientific instruments, and foodstuffs.2

South Africa meets TriLinc’s country standards for its performance across relvant growth, stability and access metrics.3 In 2014, it ranked second across the SubSaharan African region on the World Bank’s Ease of Doing Business index.4 As the second largest economy in Sub-Saharan Africa,5 the country benefitted from the $37 billion in net foreign direct investment that was estimated to have flowed into the region in 2014.6 Robust domestic demand across Sub-Saharan Africa helped spur GDP growth to 4.6% in 2014.7 Looking ahead, overall regional GDP growth is projected to strengthen to 5% by 2017.7


Additional Sustainability and Impact Highlights

  • Maintaining its competitive edge in product quality, the borrower holds a South African Bureau of Standards certification for its multilayer piping system, including the underlying piping and fitting component parts.
  • The borrower’s piping and fitting products support quality-of-life and energy savings applications, such as solar water heating systems, heat pumps, and air-conditioning units for commercial and residential clients.
  • As a responsible corporate citizen and supporter of local community development, the borrower financially supports various employee-selected charities.

1The World Bank, World Development Indicators Database, South Africa, 2015. 2CIA, The World Factbook, 2015: South Africa. 3There is no assurance that our investment in this company or this market will be successful. 4The World Bank, Doing Business 2015, Going Beyond Efficiency, 2014. 5The World Bank, World Development Indicators Database, 2015. 6The World Bank, Data, Sub-Saharan Africa, 2015. 7The World Bank, Global Economic Prospects, June 2015.

The above information is as of the initial date of investment: October 9, 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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