How Efic Saved the Day for Gemtree Wines

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Efic – Australia’s export credit agency – understands the challenges you face as a wine exporter and can help bridge the gap when your bank is unable to assist, allowing you to expand into new markets and grow internationally.

In 2015 Efic helped family-owned Gemtree Wines with an Export Working Capital Guarantee when its bank couldn’t help, allowing the winery to deliver on its bulk contract for a popular US brand and expand into new global markets.

“Efic’s support ensured we could confidently move forward with our customer to deliver on this very important export contract,” says Christine Seys, Chief Financial Officer of Gemtree Wines.

The winery was established in 1998 as an extension to the Buttery family’s grape growing business, which had supplied grapes to McLaren Vale wineries since 1980. Gemtree has a strong focus on sustainability and has evolved into a successful wine brand that grows Shiraz, Tempranillo, Sangiovese, Merlot, Cabernet Sauvignon and Chardonnay.

Along with producing organic wines from its own grapes, Gemtree also sources grapes from other McLaren Vale vineyards to produce bottled and bulk wine. It has an arrangement with a US wine company, based in California’s Napa Valley, to supply about 900,000 litres of South Australian wine each year for a popular US brand; the company is engaged in winemaking, design and packaging, and provides wine and finished case goods to retailers, wineries, restaurants and start-up brands. All wine supplied by Gemtree under this contract is sourced from premium regions in SA. To meet the US company’s monthly distribution schedule, Gemtree has to make and source enough wine to fulfill the entire year’s order upfront, which increases pressure on its working capital.

Gemtree’s overseas bank provided working capital support for the 2013 and 2014 vintages, but tightening credit conditions made it more difficult for its bank to approve bank guarantees for foreign companies. When Gemtree’s Australian bank was unable to provide the finance it needed, due to a limited risk appetite, it referred Gemtree to Efic for help. Efic provided Gemtree with a Working Capital Guarantee to support its 2015 delivery, allowing it to fulfill this critical export contract and ease the pressure on its working capital.

Gemtree’s ability to deliver on bulk contracts is vital for its export growth, as it builds a strong reputation for on-time delivery to international markets. Along with expanding its exports into Europe, South America and Africa, Gemtree has a joint venture with Sichuan Taifeng Group in China, which provides an excellent platform to increase Gemtree’s distribution into Asia.

To find out how Efic can help your wine export business grow, phone

1800 093 724 or visit www.efic.gov.au/wine

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