“ProducePay appeared as our solution to commercialize much more coffee, give cooperatives greater profitability, and protect the growers.”
Rodrigo Fonseca
CFO at Expocafé
Company
Expocafe
Location
Bogota, Colombia
Profile
Green coffee exporter
Challenge
Limited cash flow
Solution
ProducePay Financing
Expocafe is one of Colombia’s leading coffee exporters, sourcing green coffee from over 28 cooperatives representing thousands of local farmers. With more than 35 years of commercial experience, the company exports their product to international markets, primarily the United States and Europe.
Expocafe’s mission is to ensure that growers receive competitive prices, while maintaining its commitment to quality and sustainability throughout the supply chain.
The challenge:
Volatile market conditions threatening operational cash stability.
“We were under a lot of financial pressure, and ProducePay arrived like a helping hand to keep us keep operating.”
Adriana Morales
Financial Specialist at Expocafé.
Expocafe’s business model of transferring favorable prices to growers often leaves them with low margins to operate, making volume sales crucial for sustaining profitability. This is why, in 2019 when the global coffee market saw a sharp decline in prices, Expocafe’s volumes were reduced and their cash flow was severely impacted.
As a result, the company’s working capital and credit lines began to diminish, exacerbating the financial strain, having 2021 and 2022 marked by significant economic losses and supply chain disruptions, including delays due to container shortages and road blockages caused by local protests. These delays forced Expocafe to renegotiate sales at unfavorable prices, worsening their financial situation.
The solution:
Tailored working capital solution to stabilize cash flow and secure continuity.
“ProducePay didn’t require the same guarantees as a traditional bank, and the payment terms fit perfectly with our cash flow cycle. This has been a tremendous benefit for us.”
Rodrigo Fonseca
CFO at Expocafé
With traditional bank loans becoming harder to access due to higher perceived risks, Expocafe needed an alternative financing solution to maintain operations and continue purchasing coffee from local growers.
In 2023, Expocafe partnered with ProducePay, securing a Pre-Season financing that provided them the liquidity they needed to overcome their financial challenges and allowed them to continue buying coffee from local cooperatives.
ProducePay’s tailored financing solution addressed Expocafé’s specific cash flow cycle, aligning repayment terms with their capital rotation, which is of approximately 60 days. ProducePay’s flexibility in structuring payments around these timeframes proved critical in stabilizing their operations This allowed Expocafe regained the financial flexibility to increase coffee volumes while maintaining a healthy cash flow.
Even though Expocafé has not yet fully recovered from the significant losses incurred in 2021 and 2022, their financial position is much improved and the infusion of working capital of ProducePay has allowed them to meet their obligations and foresee a brighter financial future.
