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Trade Finance

Diversifying Trade Flows & Working Capital Optimization – A Top Priority for European Construction Machinery Exporters

Munich the 10th of April 2019

Fineon Exchange is supporting EU Construction Machinery Exporters to increase their exports and tap into growing emerging and developing markets. 

Fineon Exchange’s Export Finance Marketplace enables exporters to increase their cash flow in order to invest in developing new technologies to conform with new EU regulations.

The construction equipment sector in Europe is undergoing a major transition, as new regulations come into play, requiring manufacturers to invest heavily in new technologies. Meanwhile, it is also experiencing lower sales volumes, compared to the peaks of just a few years ago and increasing pressures on suppliers. 

These factors combined make Europe’s construction equipment market highly challenging at the moment.

Companies that address these challenges head-on and re-imagine their business processes, will be positioned for significant growth, while companies that fail to take the challenges seriously, will face an uphill battle for viability. The European construction equipment market was valued at $125.2 billion in 2018 and estimated to reach a value of $292.3 billion in 2024; a CAGR of 9.44%. 

Key aspects like increased mining activity and climbing demand from developing countries are accelerating this market, and the factors such as higher import duties and restrictions combined with high initial purchase and maintenance costs, are hampering the market growth.

From a geopolitical risk perspective, the US-China trade wars, populism in the EU and Brexit, are all major concerns for European exporters at the moment. Companies in the EU are bracing themselves for a slowdown in their biggest trading markets, which could have big implications for their respective economic prospects. 

Fineon Exchange is in Munich to participate at Bauma 2019, the largest construction machinery trade fair in the world. The management team of Fineon Exchange met with various European construction machinery exporters that were eager to learn how Fineon Exchange can address their export finance needs and optimize their working capital and cash flow; increasingly important as the slowdown in machine sales of the last few years has come at a time when manufacturers are gearing up to develop new low emission technologies. 

Construction machinery manufacturers have been required to meet tougher environmental legislation in Europe, as well as North America, with the Tier 4 Final/Stage IV requirements having been introduced. Complex and costly, these technologies have cut tailpipe emissions for construction machines but resulted in increased sales costs for many models.

The Fineon Exchange platform helps exporters to increase their cross-border sales, increase their cash flow, while minimizing risk, by matching them with the right funders and credit insurers, that are willing to finance and insure their export sales to important emerging and developing markets. The platform uses the latest technologies, such as its Artificial Intelligence Robo-Advisor, to assist exporters in structuring the optimal tailor-made deal that fits the exporters working capital needs with the most efficient and creative low cost financing.

Fineon Exchange’s overreaching purpose is to leverage its platform’s advisory, matchmaking and receivables trading capabilities among its stakeholders, to provide working capital optimization, market intelligence and credit insurance coverage, thereby increasing international competitiveness and sales.