TriLinc has provided financing to a sesame seed exporter in Guatemala. In operation for over 40 years, the family-owned company is engaged in the purchase, processing, and export of sesame seeds and honey sourced from producers throughout Latin America and India. With a production capacity of over 3.5 million pounds of sesame seeds per year, the borrower sells its product to bakeries around the world that supply leading global fast food chains, including McDonalds. TriLinc’s financing provides the borrower with a source of short-term funding to purchase inventory and fulfill customer orders in a timely fashion. Additionally, it is anticipated that TriLinc’s financing will indirectly improve agricultural productivity of the borrower’s supplier base as well as support the borrower’s employee capacity-building initiatives.
Guatemala is classified as a lower middle-income country by the World Bank.1 Between 2010 and 2014, annual GDP growth rates averaged approximately 3.59%.6 Guatemala’s main exports are concentrated in sugar, coffee, petroleum, apparel, bananas, fruits and vegetables, cardamom, manufacturing products, precious stones and metals, and electricity.2 Conversely, the country’s main imports are focused in fuels, machinery and transport equipment, construction materials, grain, fertilizers, electricity, mineral products, chemical products, and plastic materials and product.2
Guatemala meets TriLinc’s country standards for its performance across relevant growth and access metrics, and meets some stability metrics.3 Given our sub-advisor’s strong incountry experience financing exports, investments sourced by this sub-advisor in Guatemala are approved on a conditional basis, specifically for export financing where the buyer is typically a developed market company or a large conglomerate, and for borrowers with whom our sub-advisor has worked in the past. In 2015, Guatemala ranked ninth across the Latin America and Caribbean region on the World Bank’s Ease of Doing Business Index.4 In relation to the borrower, Guatemala has the second lowest trade tariffs in Latin America and the Caribbean, according to the World Economic Forum’s Global Competitiveness Index.5 With a GDP of $58.7 billion,6 Guatemala’s stable macroeconomic conditions, efficient goods market, and relatively well-developed infrastructure have led the country to benefit from the $178 billion in net foreign direct investment that was estimated to have flowed into the region in 2014.7 Between 2010 and 2014, the annual GDP growth rate for the region has averaged approximately 3.6% and is forecasted to be 2.8% in 2017.8
Additional Sustainability & Impact Highlights
- Conscious of its environmental footprint, the borrower optimizes energy usage by utilizing solar panels and replacing its oil bunker boilers (used for heating water for material processing) with natural gas, a cleaner and more cost efficient energy source. In addition, wastewater is recycled and filtered throughout all of the borrower’s manufacturing processes.
- The borrower is committed to improving employee welfare by implementing human resource policies that include health and dental insurance, disability coverage, parental leave, fair hiring/recruiting and compensation practices, and job-related training opportunities.
1The World Bank, World Development Indicators Database, Guatemala, 2015. 2CIA, The World Factbook, 2015: Guatemala. 3There is no assurance that our investment in this company or this market will be successful. 4The World Bank, Doing Business 2016, Measuring Regulatory Quality and Efficiency, 2015. 5World Economic Forum, The Global Competitiveness Report, 2015-2016. 6The World Bank, World Development Indicators Database, 2015. 7The World Bank, Data, Latin America and the Caribbean, 2015. 8The World Bank, Global Economic Prospects, June 2015.
The above information is as of the initial date of investment: October 15, 2015.
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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