“We started working directly with Chinese customers as soon as this became possible a year and a half ago. We quickly secured our first contract, valued at NOK 30 million, but the deal was jeopardised when the customer was unable to pay in the ordinary manner,” related Alfsen og Gunderson’s paper-industry equipment director Oscar Olsen to the daily business paper Dagens Næringsliv in June last year.
Export financing proved to be the answer.
“Due to exchange restrictions, it is difficult for Norwegian financial institutions to provide financing to Chinese companies. The solution was for Alfsen og Gunderson to issue a supplier’s credit for some of the contract sum. We then took over part of the credit, creating a hybrid loan and supplier’s credit solution,” says Export Credit Norway’s Thor-Magne Johansen.
Since being founded in 1926, Alfsen og Gunderson has become a leading developer of water, air, drying and cleaning technologies. Photo: Alfsen og Gunderson AS
The purchaser under the export contract for the delivery of advanced paper manufacturing equipment is Anhui Taipingyang Special Mesh Industry Co., Ltd., which is based in China’s Anhui province.
The delivery from Alfsen og Gunderson comprises advanced machinery for heat-treating and stretching the broad paper mat produced in paper factories. Long, broad belts are directed over the paper pulp, which is pressed to an even thickness and dried before being rolled up into a finished product.
“We have already received several enquiries from China thanks to this contract.”
Oscar Olsen, Alfsen og Gunderson
The company states that both normalised political relations between Norway and China and financial credit and guarantees from the Norwegian policy instruments were important factors in securing the contract.
“We have delivered to Chinese customers previously, but the involvement of the Norwegian State through loans and guarantees is opening new doors. We have already received several enquiries from China thanks to this contract,” he relates.
Alfsen og Gunderson AS used Export Credit Norway and GIEK’s SMB solution for export contracts valued at less than NOK 100 million, which features a joint application form and simplified loan documentation.