Mitigate risk and protect profitsDownload Case Study
Multinational steel trader uses Coface Global Solutions insurance and collections services to mitigate risk and protect profits.
Duferco International Trading Holding Group (DITH) are a global steel trader and distributor which ships around 20 million tonnes of raw material and steel each year. DITH was formerly the trading arm of the multinational Duferco Group, but in 2016, it became part of HBIS, one of China’s largest iron and steel material manufacturers.
Today, DITH are focused on trading and distributing steel, including value-added services to customers such as logistics and trade finance. Its steel is sourced from mills worldwide but the Group also has two production sites in Macedonia and South Africa.
There are more than 40 businesses within the DITH Group following its divestment from Duferco. However, the Group is now looking to grow further with the support of its new parent company, recently establishing a base in Australia and acquiring a stockist in Germany.
DITH and its Duferco predecessor have had credit insurance since 1998 and see cover as a prerequisite for their business, as Credit Manager, Sergio Vignone explains: “If you want to trade you need a telephone, a customer and a quality product at the right price but you also need a finance line and a credit insurer.
“As traders, we obtain working capital from our bank and then we receive our money whaen the customer pays. The banks themselves make credit insurance a condition for access to trade finance but we do not want to open our own pockets if it all does wrong,”
Sergio Vignone, Credit Manager.
Coface Global Solutions
Coface has been providing credit insurance for DITH (and Duferco) for the last 18 years. The cover is arranged through Coface Global Solutions (CGS), a division of Coface which is dedicated to serving multinational clients.
As well as multi-country cover and credit management services, CGS clients have access to a global network of risk experts in 100 countries and benefit from a single point of contact. This contact can arrange a bespoke solution which meets the needs of different subsidiaries and is on hand to respond to any queries.
From DITH’s Head Office, Sergio works closely with his Coface Account Manager in the UK. “We have an in-house broker here in Switzerland but I will often make the call myself,” he says. “I’m happy with the service support and credit limits we get from Coface and our Account Manager takes care of policy wording and negotiations for us.”
Claims and collections
Of course, the acid test of any credit insurance provider is how well it supports companies when a bad debt or late payment threatens to interrupt cash flow and hit profits.
“I would absolutely recommend Coface credit insurance,” says Sergio. “In 2014, we made our biggest claim under the Coface policy for £500,000. Everything went smoothly and we received payment 30 days after declaring the loss. That sort of sum will destroy a year’s profit and it shows why we won’t trade without cover – the risk is just too much, even for customers that we have known for the longest time.”
Better still, Coface’s Collections team has also been able to recover late payments for DITH, thereby pre-empting the need to make a claim. “I’m very happy with the service,” comments Sergio.
“We used them twice in the last year in the UK to recover late payments and they were brilliant. In one case, we received the money just two or three days before the company files for bankruptcy,”
Sergio Vignone, Credit Manager.
Such successes reflect Coface’s all-round credit management expertise which have made it a valued partner for Duferco and DITH over so many years, a relationship which is set to continue as the trading giant begins an exciting new chapter.
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