1. 1. EDC IN GREATER CHINA Presented by: Jeff MacArthur Senior Account Manager May 2, 2017
2. 2. 2 To support and develop, directly or indirectly, Canadas export trade and Canadian capacity to engage in that trade as well as to respond to international business opportunities Canadas Export Credit Agency Offers financial solutions to help Canadian exporters expand their international business Crown corporation wholly owned by Government of Canada Financially self-sustaining and operates on commercial principles About EDC WHO WE ARE AND WHAT WE DO EDCs Mandate
3. 3. 3 MOSCOW RUSSIA 17 OFFICES ACROSS CANADA MONTERREY MEXICO MEXICO CITY MEXICO BOGAT COLOMBIA LIMA PERU SANTIAGO CHILE ISTANBUL TURKEY LONDON ENGLAND DSSELDORF GERMANY RIO DE JANEIRO BRAZIL SAO PAULO BRAZIL JOHANNESBURG SOUTH AFRICA MUMBAI INDIA DUBAI UAE NEW DELHI INDIA SINGAPORE SHANGHAI PEOPLES REPUBLIC OF CHINA BEIJING PEOPLES REPUBLIC OF CHINA JAKARTA INDONESIA EDCS FOREIGN REPRESENTATION SYDNEY NEW 2017
4. 4. 4 EDCS BUSINESS STRATEGY FOR CHINA EDC supported almost 5.6 Billion of Canadian trade with China in 2016 (4.8 Billion with credit insurance and 750 Million with financing) EDC is actively seeking to grow Canadas trade with China by supporting business opportunities, Canadian trade and investment in China Key sectors of opportunity include: Aerospace, Automotive, Cleantech, Consumer Goods, Agri-Food and Oil and Gas EDC will continue to focus on increasing Canadian investment opportunities, supporting Canadian affiliates and their parent companies and leveraging in market relationships
5. 5. 5 China was New Brunswicks 3rd largest export destination in 2015 with exports of $87.1M Canadian exports to China have increased by 79% between 2008 and 2016 - feeding Chinas demand for raw materials and technology Top exports include precious metals, minerals, pulp & paper, petroleum, oilseeds and aerospace products & parts Canadas Merchandise Exports to Greater China and EDCs Volume (Mainland China represents 67% of Canadas total Exports to Greater China in 2016) EDC & GREATER CHINA (GREATER CHINA INCLUDES MAINLAND CHINA, HONG KONG, MACAO & TAIWAN) 0 5000 10000 15000 20000 25000 30000 2008 2009 2010 2011 2012 2013 2014 2015 2016 $3,739 $3,100 $5,664 $10,750 $7,610 $8,451 $8,597 $5,569 $5,579 $13,216 $13,349 $15,849 $20,767 $22,690 $26,284 $24,515 $24,784 $23,714 EDC BV Exports
6. 6. 6 If you know you are going to get paid You can Enter into new markets and expand in existing markets Be more competitive by offering more flexible payment terms Your banker can: Provide you with more working capital financing HOW CAN EDC HELP? MAKE SURE YOU GET PAID
7. 7. 7 EDC credit insurance covers 90% of losses due to: Bankruptcy Default (not bankrupt but not paying) Repudiation (refusal to accept the goods) Political Risks which prevent the goods from entering the country or the buyer from sending the payment out of the country HOW CAN EDC HELP? MAKE SURE YOU GET PAID
8. 8. 8 EDC offers two credit insurance solutions: Accounts Receivable Insurance Available online, through EDC account managers or through select insurance brokers Fully customizable coverage for terms of up to one year No restrictions on credit limits (subject to credit approval) Trade Protect Available exclusively online and can be in place in as little as 10 minutes Coverage for amounts up to USD500,000 (subject to credit approval) You pick which customers you want to insure Standardized coverage HOW CAN EDC HELP? MAKE SURE YOU GET PAID
9. 9. 9 EDC can provide your lender with loan guarantees to finance your export business or your foreign affiliates (available through all banks, UNI and select credit unions) Guarantees range from 50% to 100% depending on the size of the guarantee and the type of assets being financed Talk to your bank tell them how EDC could help them support your growth and help them do more business HOW CAN EDC HELP? LOAN GUARANTEES
10. 10. 10 EDC can help with your international business related activities by providing guarantees on loans to finance: Ongoing working capital needs Financing receivables and inventory Costs related to export contracts Term loans for equipment Federal and provincial Scientific Research & Development Tax Credits (SRED Claims) Foreign domiciled inventory Foreign acquisitions Foreign affiliate working capital needs Indirect exports sales to a company that exports Things we havent thought of yet HOW CAN EDC HELP? EDC GUARANTEE PROGRAM
11. 11. 11 HOW CAN EDC HELP? MANAGE FX RISK Foreign exchange volatility can wipe out profit margins (or even create a loss). The lower the profit margins, the greater the impact of currency volatility Banks and FX brokers can set up FX hedging facilities to protect you from that volatility but they will need security. For many companies, providing that security will negatively impact working capital EDC can provide a guarantee to your bank or FX broker to secure a foreign exchange hedging facility to help protect you against fluctuation in foreign exchange rates
12. 12. 12 HOW CAN EDC HELP? SUPPORT BONDING NEEDS Many project oriented companies need to issue bonds in connection with projects they are bidding or working on. For projects outside of Canada and for some projects in Canada such as mining or oil and gas, EDC can provide the bank with a 100% guarantee to support a wide range of bonding needs Performance Bonds Bid Bonds Advance Payment Bonds Holdback Bonds
13. 13. 13 There are currently over 250 Canadian firms with investments in China, including firms of all sizes and industry sectors The stock of Canadian investment in China has increased on average by 16% annually since 2000, reaching $12.4 billion in 2015 EDC can help create financial capacity for Canadian investment into China through joint support with the Canadian banks Accounts Receivable cover for the China domestic sales by a 100% owned Canadian affiliate may be possible CANADIAN DIRECT INVESTMENT ABROAD (CDIA)
14. 14. 14 KEY EDC CONTACTS Chia Wan Liew Chief Representative - China (Shanghai) cliew@edc.ca Peter Xu Sr. Regional Manager (Shanghai) pxu@edc.ca Monica Fan Regional Manager (Beijing) mfan@edc.ca Shelly He Coordinator (Shanghai) she@edc.ca Jeff MacArthur Senior Account Manager - Moncton jmacarthur@edc.ca Bryan Nugent Account Manager Moncton bnugent@edc.ca Luisa Rebolledo Chief Representative - Asia lrebolledo@edc.ca Marti Falcone Regional Manager - Asia mfalcone@edc.ca Ladislau Papara Regional Manager - Asia lpapara@edc.ca IN CHINA: IN CANADA: