Borrower Overview
 

TriLinc has provided trade financing to a South African company engaged in agriculture for feed, feedlot and meat processing facility operations. Established in 1986, the company supplies meat to large, well-established local supermarket chains and outlets. TriLinc’s loan is supported by a purchase and repurchase agreement that is secured by livestock feed inventory. The financing is expected to support the borrower’s continued growth efforts through the expansion of its distribution network and the addition of more retail outlets in the underserved low- to middle-income market. With this growth, the company anticipates that it will create more jobs and expand its employee base. In addition to being one of the largest employers in the rural heartland of South Africa’s cattle country, the company provides its employees and their children with access to education and day care services, funds a soup kitchen and makes additional food donations to charitable organizations serving the communities where it operates. The borrower takes environmental considerations into account in all aspects of its operations, with a special focus on reducing its dependence on chemical fertilizers and non-renewable energy sources.

Market Overview

South Africa is classified as an upper middle income country by the World Bank.¹ Between 2010 and 2013, GDP growth rates averaged approximately 2.8%.² Major exports include gold, diamonds and platinum.

South Africa meets TriLinc’s country standards for performance across relevant growth, stability and access metrics.³  In 2013, it ranked 41st in the world and third across the region on the World Bank’s Ease of Doing Business index.⁴ As the second largest economy in Sub-Saharan Africa, the country has benefited from an estimated $32 billion of foreign direct investment in the region in 2013.⁵ Robust domestic demand across Sub-Saharan Africa helped spur regional GDP growth up to 4.7% in 2013, and is expected to remain stable at 4.7% in 2014.⁵ Looking ahead in 2015 and 2016, overall regional GDP growth is projected to strengthen to 5.1%.⁵

Additional Sustainability & Impact Highlights

• The company’s co-sponsored school offers an accredited education curriculum and agricultural training to 400 students.
• The company’s soup kitchen provides meals to 500 disadvantaged community members, and employees help prepare and serve the meals.
• The company is a member of the South African Feedlot Association and promotes the Five Rights of Animals through livestock pens designed to minimize stress and disease, rations formulated by a nutritionist to optimize animal health and specially designed trucks to reduce transportation stress and discomfort.
• The company’s meat processing facility is one of only three in South Africa that is HACCP (Hazard Analysis Critical Control Point) compliant. HACCP certification ensures food safety practices from raw materials and procurement through manufacturing, distribution and consumption.

¹World Bank, Doing Business 2014, Economy Profile: South Africa ²World Bank, World Development Indicators Database, 2014 ³There is no assurance that our investment in this company or this market will be successful. ⁴World Bank, Doing Business 2014, Understanding Regulations for Small and Medium-Size Enterprises ⁵http://www.worldbank.org/en/publication/global-economic-prospects/regional-outlooks/ssa#12

The above information is as of the initial date of investment: July 7, 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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