2012-01-16 www.enorth.com.cn
To respond to the call of Tianjin Municipal Government and settle the actual difficulty of technology-oriented SMEs in financing, Industrial Bank Tianjin Branch designed and combined products flexibl y based on conventional credit products in combination with the developing characteristics of technology-oriented SMEs across Tianjin. The branch released a number of innovative products including “IB Sesame Blooming”, “IB Credit Enhancement Loan”, “IB Quick Loan”, and “IB Point-based Loan”, etc. and introduced a number of guarantee methods such as intellectual property pledges, commercial contract enhancement financing, contract energy management, and credit loans to solve the hard bottlenecks of technology-oriented SMEs in providing guarantees. By the end of November 2011, the balance of loans granted by IB Tianjin Branch to SMEs amounted to RMB 16.133 billion, up 112% YoY; and the branch supported 283 SME customers, up 121.09% YoY. The branch has supported 26 technology-oriented SMEs approved by the science and technology commission in total, through project appraisal and granted loans amounting to RMB 686 million, playing an active role in supporting technology-oriented SMEs to spread everywhere and little giant enterprises to grow up fast.
A bank characterized by green credit supports technology-based energy conservation projects actively
As the first Chinese “Equator Bank, IB has become the advocator and practitioner of “green finance” and “low-carbon finance”, and its loans have basically formed three models: energy efficiency finance, environment al finance and carbon finance. From among the technology-based energy conservation projects under its support, Tianjin Hengjing Regenerated Alloy Material Co., Ltd., which has been listed in the fourth batch of 20 major industrial projects of Tianjin, has become one of the model projects under its support.
Registered in December 2007, Tianjin Hengjing is an enterprise integrating the production, processing and marketing of “new nichrome”. The efficient, energy-conserving and clean manufacturing method, named “chromate” and invented by Hengjing, received the Appraisal Certificate of China for Scientific and Technological Achievements. The technology fundamentally solved problems that exist in conventional processes: high consumption, heavy pollution and difficulty in controlling pollution, reaching an advanced level in the world. On December 20, 2008, Tianjin Municipal Government listed the company into the fourth batch of 20 major industrial projects. Though the project boasted great development potential of transform ing the scientific and technological research results into productivity, the company initially had to face the following development bottle necks: massive and concentrated investment in the early stage, low returns in the initial stage, and a long capital recovery period. Although the company had raised a large amount of funds by itself, a gap still remained from the planned scale.
After discovering the financing predicament faced by the company, IB was certain about the position of the enterprise in the field of waste nichrome residue regeneration and the project boasted world level technology. The bank regarded it as important that the company could eliminate chromic pollution from the source and boast a 100% resource utilization rate. It was clear about that the company would discharge none of the three wastes (waste water, waste gas and industrial residue) during the production process, and the project would be efficient, energy-conserving, clean and boast significant social and environmental effects and is a promising development prospect. Hence, IB regarded it as an energy-conserving and emission-reduc tion project, arranging corresponding financing products for the company in stages in combination with its needs. First, IB extended the energy-conserv ation and emission-reduc tion project loan s of RMB 60 million to the company for a term of three years, with an additional grace period for repayment for the purpose of reducing the repayment pressure on the company. Next, after the project came online, the bank provided the company with a working capital loan of RMB 20 million, supplementing the starting funds of the company with a view to facilitating the project to reach production targets. By September 2011, the project accumulatively registered sales revenue reaching RMB 190 million. According to preliminary estimation, it has, in an integrated way, utilized 25.1 tons of waste nichrome and 23.7 tons of waste steel, reduced 100,000 tons of solid waste emissions, 1.7 billion standard cubic meters of waste gas, and 240,000 tons of carbon dioxide.
For several years, the strategic practice of “green finance” has opened new business fields for IB. Up to now, IB has granted energy-conserving and emission-reduc tion loans of RMB 39 billion. The projects under support reduce 720,000 tons of oxygen consumption each year, resulted in 2.4 billion tons of waste water reach ing the national Level 1 emission criterion and bring considerable “golden” earnings for society, the bank and the enterprises.
“Logistic finance” - settl ing the financing conundrum of supply chain companies
Tianjin Haiyan New Electro-mechanical Technology Co., Ltd. is a small technology-oriented enterprise mainly engaging in energy-conserv ation transformation. Formerly known as the Electro-mechanical Engineering Department of the Institute of Ocean Technology under the State Oceanic Administration of China, the company mainly deals in energy-conserving products such as industrial automation integration systems and low-voltage frequency converters. The company has gained the hi-tech enterprise certification of Tianjin and obtained ISO 9001: 2008 quality management system certification, and compulsory product CCC quality certification, etc., boasting certain independent research and development capability and strong development potential. Along with the “11th Five-year Plan” period, our city took eliminating backward production capacity as an important approach for the whole city to accelerate the transformation of the economic development model, improve industrial structure and enhance economic growth quality and benefits. Orders received by the company increased several times over, so existing funds could not meet the needs of its operations and development. As a result, the company submitted a credit extension application to the bank.
Based on investigation and interview regarding the operation and management characteristics of the company, IB learned that the company has engaged in the energy-conserv ation transformation for 15 years and has accumulated rich operation al and management experience. In addition, the government has invested massive manpower and material resources to transform projects involving high energy consumption. As a result, the company has good industr y development prospects. In addition, IB has maintained good cooperation with its major service partners–Tianjin Tiantie Metallurgy Group Co. Ltd., Tianjin Hot-rolled Plate Co., Ltd. and other large-sized SOEs, having a high recognition of the business strength s and good performance capabilit ies of downstream customers. As a result, IB based on the characteristics of a long payment period during cooperation, low capital turnover rate, good qualification of downstream enterprises, and guaranteed credit standing, proposed to the company a financial services program to relieve its shortage of funds by way of account receivable.
Based on the energy-conserv ation transformation RMB 15 million contract signed by Tiantie Group and the company in the first half of the year in 2011, IB handled the factoring business of RMB 10 million account receivable for the enterprise and opened a special factoring account for it. Through factoring, IB first settled the problem of insufficient guarantee faced by a technology-oriented SME, thus meeting their financing demands; second, it resulted in the timely capital recovery for extended reproduction coming sooner, cooperation with downstream customers and improve ment the progress of transformation; third, with Tiantie Group, a customer of our bank being selected as the specified purchaser, the communication agreement between the bank and the company became smoother. The monitoring of the recovery of account receivable also reduced the business risks in an effective way.