Borrower Overview
TriLinc has provided financing to a vertically integrated oilseed distributor in Argentina engaged in the storage, ginning, spinning and weaving of cotton and manufacturing of garments and other end products. The borrower is the number one player nationally in the cotton ginning industry and one of the principal exporters in Argentina. The borrower’s oilseed business is supported by four company-owned and -operated ginning plants, which have a combined processing capacity of up to 2,100 tons per day. For fuel efficiency within the borrower’s plants, the borrower uses biomass as a source of fuel by recovering waste from the ginning plants. Additionally, the borrower recovers wastewater that is collected from evaporative condensers, using a reverse osmosis process, to be reused as cooling water for the manufacturing process.
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Market Overview
In 2014, Argentina was classified as an upper-middle income country by the World Bank.1 Between 2010 and 2014, annual GDP growth rates averaged approximately 4.4%.2 Argentina’s main exports have traditionally been soybeans and derivatives, petroleum and gas, vehicles, corn, and wheat. 7 Conversely, imports have been focused in machinery, motor vehicles, petroleum and natural gas, organic chemicals, and plastics.3
Argentina meets TriLinc’s country standards for its performance across relevant growth, and access metrics but not all stability metrics.4 Due to our Investment Partner’s successful historical experience in-country with financing exports, Argentina has been approved on a conditional basis for this Investment Partner, specifically for export financing where the buyer is typically a developed market company or a large conglomerate, and for borrowers with whom our Investment Partner has worked with in the past. As the third largest economy in Latin America, the country benefitted from the $178 billion in net foreign direct investment that was estimated to have flowed into the region in 2014.5 Between 2010 and 2014, annual GDP growth rates for the region have averaged approximately 3.6% and are forecasted to reach approximately 2.8% in 2017.6
Additional Sustainability & Impact Highlights
- The borrower is actively engaged in the communities where it operates and has a specific focus on corporate social responsibility programs in education, inclusive social development, culture, environment, and employee wellness.
- The borrower currently holds Bureau Veritas certifications for its Environmental Management System (ISO 14001:2004), Quality Management System (ISO 9001: 2008), and Occupational Health and Safety System (OHSAS 18001:2007) for its cotton spinning plant.
1The World Bank, Data – New Country Classifications, 2015. 2The World Bank, World Development Indicators Database, 2015. 3CIA, The World Factbook, 2015: Argentina. 4There is no assurance that TriLinc’s investment in this company or this market will be successful. 5The World Bank, World Development Indicators Database, 2015. 6The World Bank, Global Economic Prospects, 2015.
The above information is as of the initial date of investment: March 21, 2017.
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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