INDIA’S TOP Consumer Electronics Manufacturer Enables Instant Working Capital for Its Vendors With TReDS

CLIENT OVERVIEW

The client operated in consumer electronics manufacturing – Lighting, home appliance, mobile phone segments, and reverse logistics operations. Additionally, the company undertakes the manufacturing of security surveillance equipment. The company has, over the last couple of years, added new principles in the segment. This in-turn has supported growth in segmental volumes and revenues. In the home appliances segment, the company has a range of 100% original design manufacturing (ODM) products. This segment, along with its backward integrationn in the lighting segment, has supported profitability improvements in recent years.

THE VOLATILE SITUATION

In line with its nature of business, the client needs to have an undisturbed supply of raw material. The vendors are predominantly MSMEs (Electronic components, packing material, and raw material), that have been built and nurtured over time. The client recognized that this network is not just a valuable asset, but also a key competitive advantage. One of the key challenges in this industry is the high volatility in raw material procurement prices. Most of the vendors are dependent on their working capital borrowing to purchase raw materials. Given the profile of these vendors, their borrowing rates are significantly higher.

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Also read these – Working capital financing, SME Finance, Invoice Financing, Accounts Receivable Financing, Supply chain financing