Luminor bank has granted a factoring limit of 500,000 euros to the milk processing company Limbažu siers. The loan is also secured by the Altum export credit guarantee, which is used for the first time in factoring cooperation.
Limbažu siers is a company that procures milk from local farmers to produce various dairy products, but its main product is hard cheese. It is produced according to a special recipe and 70 % of the production is exported to Italy. In order to be able to continue exporting and selling products to one of the main customers, the Altum export guarantee was used.
“We are ready to adapt to different situations and customer needs, looking for individual and, if necessary, new solutions – like this deal. For the first time, we are attracting the Altum export guarantee in factoring cooperation so that the company Limbažu siers can be granted the necessary financing and it can successfully continue the export of its products. This is a new type of security that allows the customer to send their goods to buyers, for whom, after risk assessment, the limits provided by insurers cannot be used. In the future, we plan to offer this type of guarantee to other customers as well,” says Ilze Zoltnere, Head of Corporate Department at Luminor in Latvia.
“Limbažu siers is a good example of how a company adapts to the new circumstances, when due to the crisis caused by the virus, the buyer changes the conditions of cooperation and, in general, the risks in export markets increase. By attracting the Altum export guarantee as an airbag, the company not only retains its export partners and is able to use factoring for financing open account transactions, but also maintains competitiveness and protects itself from the risk of losing money in the event of buyer insolvency,” Evija Zaķe, Altum Export Support Manager.
Igors Aleksejevs, Chairman of the Board of Limbažu siers, says: “Our biggest export market is Italy, which suffered a lot from the Covid-19 pandemic. We were faced with a very difficult choice, on the one hand our largest partners in Italy asked for an extension of payment terms, but on the other hand we did not want to delay payments to our partners in Latvia – local dairy farmers, who were also affected by the economic situation. Insurers could not provide the required limits, so we turned to our bank – Luminor, which together with Altum found a solution for us to receive financing. This is a very successful example of tripartite cooperation between a local producer, a bank and the government, which ultimately strengthens our country’s economy. At the moment, it is critical to ensure that our country’s export volumes are maintained, so I would like to encourage other entrepreneurs to contact their bank and Altum to find solutions even in seemingly difficult situations.”