Vessel Operator

Borrower Overview

TriLinc has provided financing to an Indonesian vessel operator under a work contract with Indonesia’s largest state-owned tin producer. These vessels work with the tin producer separating quality tin from tailings. After the tin is refined into London Metal Exchange (“LME”) grade tin bars, it is exported to buyers such as the Mitsubishi Corporation, Dow Europe, Toyota Tsusho Asia Pacific, among others in the United States, Europe, Taiwan, Korea, Japan and China. The vessels’ operations have budgeted donation and corporate social responsibility (“CSR”) funds that are allocated every month by a selected local representative. The majority of projects supported are focused on building up local infrastructure and creating new companies to support job creation. Many of the locals who are supported through these efforts begin a service or open a business such as transportation, spare part shops, and food services. The borrower works closely with the Indonesian government to be in compliance with environmental impact assessments, payments of taxes and royalties, and proper registration of concession boundaries, all with the aim of creating transparency to the tin supply chain in Indonesia.


Market Overview

Indonesia is classified as a lower-middle income country by the World Bank.1 Between 2010 and 2016, GDP growth rates averaged approximately 5.6%.1 The country’s main exports are concentrated in palm oil, coal briquettes, petroleum gas, crude petroleum, and jewelry.2 Conversely, the country’s main imports are focused in refined petroleum, crude petroleum, telephones, vehicle parts, and wheat.2

Indonesia meets TriLinc’s standards for its performance across relevant growth, stability, and access metrics.3 In 2017, it ranked ninth across the East Asia and Pacific region on the World Bank’s Ease of Doing Business index.4 Corruption and inefficient bureaucracy are seen as the most pressing hurdles currently facing the country’s productivity and competitiveness.5 As the fifth largest economy in the East Asia and Pacific6 region with a GDP of $932.3 billion, the country’s well-developed macroeconomic environment, innovation, and business sophistication led the country to benefit from the estimated $493.2 billion in foreign direct investment that flowed into the region in 2016.6 Robust domestic demand across East Asia & Pacific region has helped spur regional GDP growth to 6.3% in 2016, and is projected to be maintained at 6.1% by 2019.7

Additional Sustainability & Impact Highlights

  • Certification – the tin products are certified by the Electronic Industry Citizenship Coalition under their Conflict-Free Sourcing Initiative. This initiative helps companies address conflict minerals issues in their supply chains. Additionally the tailings disposal process is controlled by ISO-14001 standards, monitoring the quality of water and tailings that are released back into the sea.
  • Local environmental Rehabilitation programs – the offtaker, Indonesia’s state-owned tin producer, implemented additional CSR funding and activities including planting of mangrove trees, placement of an artificial reef for fish, coral reef transplantation and rehabilitation of river watersheds.

1The World Bank, World Development Indicators Database, Indonesia, 2016 2The Observatory of Economic Complexity, Indonesia, 2016 3There is no assurance that our investment in this company or this market will be successful 4The World Bank, Doing Business, East Asia & Pacific, 2017 5World Economic Forum, Global Competitiveness, 2017 6The World Bank, World Development Indicators Database, 2016 7The World Bank, Data, East Asia 7 Pacific, 2016

The above information is as of the initial date of investment: June 2, 2017.

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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