Cash flow is the decisive factor for the development and growth of any enterprise. It creates agility for decisions as an entrepreneur. Strategic decisions are critical to survive in today’s changing global economy. Only good cash flow allows freedom in strategic decisions. DS-Concept aims to provide powerful international cash flow solutions, tailored for its global clients, in new and innovative ways. The company strives to develop mutually beneficial relationships with numerous organizations to promote the sustainable growth of the global market. DS-Concept works very closely with textile industry globally and more recently with clients in India. We spoke to Mr. Ankit Goel, Managing Director, DS-Concept Intelligent Trade Finance, Dubai on the solutions offered and more specifically on the company’s focus on the Indian textile market.
Let’s start with a brief background on DS-Concept?
Founded in 2000, with 13 global offices and affiliates, including our headquarters in Germany, DS-Concept is at the forefront of international trade finance. Spearheaded by two experts, the economist Dr. Dieter Spickermann and attorney-at-law Ansgar Hütten, DS-Concept is comprised of experts around the world who truly understand international trade and trade finance.
What are the solutions offered by DS-Concept for its customers across the world?
As a Germany-based finance organization with excellent connections in international equity markets, we provide liquidity for international trading enterprises in a variety of industries around the globe. Servicing the cash flow of the exporters who do not want to be at the mercy of long payment terms or the volatility of their currencies, DS-Concept assumes your international receivables and immediately provides the monetary means needed for the proper financial control and strategic asset allocation in an international business climate. While DS-Concept provides each client with a unique, tailor-made solution based on location, products, customers and payment terms, funding is fairly simple and straightforward.
There are three steps:
* DS-Concept inspects the credit-worthiness of the client’s international customers.
* DS-Concept buys receivables from the client’s export business, and pays them the advance amount (typically, upon shipment).
* DS-Concept handles the management of the client’s accounts receivable as well as the complete dunning process. Because we offer non-recourse financing, we provide 100 per cent insurance against deficit or shortfall of payment, should our client’s customer not pay due to insolvency.
In addition to export factoring, DS-Concept offers import and supply chain financing.
Which are the major industry verticals that DS-Concept caters to globally and which are the key global markets in which it has its presence?
DS-Concept is industry agnostic. However that being said, our biggest portfolios consist of the Textile, Automobile, Agro commodities, Pharmaceutical and IT services industries. DS-Concept has a key presence in the European, American and Asian markets. However, our global network operates on a worldwide basis with its fingers on the market’s pulse and continues to grow and expand into new territories.
How important is textile as an industry vertical for DS-Concept globally?
Our company has its origins in the financing of the Turkish textile trade. So the textile and apparel industry continues to play a major role in our business. Currently, we work with many textile and apparel producers and traders in several countries, including China, Bangladesh, India, Pakistan, Turkey and Vietnam. The apparel and textile sector currently makes up about 40 per cent of our firm’s portfolio. DS-Concept is industry agnostic. We finance a wide variety of industries and products. The majority of our clients in the textile and apparel sector are exporting readymade garments or home textiles. Typically, these exporters sell to major retailers and wholesalers in the US, Europe and the Middle East.
What are the specific trade finance solutions that you offer for textile industry customers?
The most common obstacle an exporter faces is the increasingly long payment terms sought by major buyers. As payment terms go from 60 to 90 days and even 120 days in some cases, it becomes increasingly difficult for the exporter to invest in day-to-day operations and virtually impossible to invest in the growth of the company. Costs of raw materials, marketing expenses, R&D, hiring staff and opening a new facility are real challenges when the exporter’s cash is tied up in international open accounts receivable.
Which are the important textile markets/countries in which DS-Concept has a good customer base?
About 70 per cent of our apparel and textile clientele is based in Asia. With our firm’s offices in places like China, Bangladesh, Pakistan and Turkey, we tend to be a natural fit for exporters located in these key markets and the global brands sourcing from these locations. Our business in Asia has grown 30 per cent year-on-year in the last two fiscals.
How important is the Indian market for DS-Concept? Since how long has the company been present in the Indian market?
The Indian Government has identified the huge potential that its textile industry presents and has undertaken various schemes to foster and promote this industry. This makes the Indian textile market a veritable gold-mine of opportunity, and we hope to establish ourselves as a strong and reliable source of finance for textile exports.
DS-Concept has had presence in this market for several years, which will only expand further in the coming years.
How do your services benefit customers in India?
We find that the trade finance solutions offered by us are very competitive in the Indian market. Our preferred clientele consists of small and medium enterprises who have difficulty establishing their creditworthiness to banks, who are becoming increasingly risk-averse due to global market trends. The way that our facility is structured, we rely on the credit rating of the end-buyers being serviced. This format works very well as most of the exports from the Indian textile industry are routed to large and established MNCs.
How has the experience been so far of working with Indian textile customers? Why should an Indian customer look at utilizing the services offered by you?
Our experience so far with our Indian textile clients has been great. Our clients are all from the major textile hubs in India, from Gurgaon to Delhi to Tirupur, Chennai, Coimbatore and Bangalore.
Our customers benefit manifold by utilizing our services. They are able to manage their working capital and mitigate the risk of their receivables due to the insurance wrap provided by us. They are also able to save on hedging costs as we fund their invoices upfront.
Do you expect India to become an important market contributing to your future growth?
Of course! India is a developing country which poised to become a global superpower in the coming decades, and DS-Concept intends to grow alongside this emerging economy.