What we do

Safe exports to Libya after the revolution

The revolution in Libya has led to changes in many areas. For Kosan Crisplant, who supplies equipment to gas companies worldwide, it has made an interesting market even more attractive.
What
Equipment for handling and filling gas cylinders
How much
Regular orders, each worth around DKK 500,000 to DKK 2 million
EKF's role
EKF provides a guarantee for Nordea, which handles the payments from Libya
EKF product
L/C Guarantee
When
Typically 3-6 months
  • Quote

    “We now know for sure that the money will arrive, and also when it will arrive”

    Lars Karlsmose, CFO, Kosan Crisplant
    ​Kosan Crisplant is a leader in technology for filling and handling gas cylinders. The markets of North Africa are important for the company as the population is entirely dependent on bottled gas for heating water and cooking food. Bottled gas is therefore a key part of the North African infrastructure.

    “We know of several cases where a poor supply line for bottled gas has led to demonstrations and protests on the streets,” says Bo Larsen, Sales Director at Kosan Crisplant.

    For this same reason, state-owned gas company Brega Petroleum has been a regular customer for many years.
    As soon as conditions in Libya began to stabilise after the revolution, Kosan Crisplant set about reconnecting with its contacts in the market, and Brega Petroleum returned to discuss new orders.

    But one thing was fundamentally different.
  • ​“In the Gaddafi era, our business with Brega would often go through various trading companies, which were typically based in London”, says Larsen. “We normally got our money, but the time it took would vary considerably. This was bad for our cash flow, and we also had to put a lot of time into chasing payments.”

    With Gadafi out of the picture, Brega could instead offer to pay via a letter of credit. This is normally seen as one of the safest forms of payment in international business.

    Lars Karlsmose, CFO at Kosan Crisplant, says: “We had been asking for payment in this form for some years, so this is a big step forwards for us. We now know for sure that the money will arrive, and also when it will arrive. This means that the risk to us has more or less disappeared.”
    ​EKF too considers letters of credit to be a good, safe solution:

    “There’s no doubt that Libya is still a difficult market, so it’s a good idea to cover the risk as Kosan Crisplant has done,” says Søren Møller, Deputy CEO at EKF. “For EKF, the deal was actually fairly straightforward. We’d already approved the country and the bank, so the case went through the system in a couple of days.”
  • ​​When Kosan Crisplant receives orders from Brega in future, a state-owned Libyan bank will guarantee payment. As soon as Kosan Crisplant delivers, the company will get the money from their own bank, Nordea.

    EKF then guarantees that Nordea will be reimbursed by the state-owned bank in Libya. Nordea is then guaranteed to receive their money, even if payment is not made as agreed. This provides certainty across the board.
    ​“We’re delighted to be working with EKF,” says Lars Karlsmose, who anticipates further growth for Kosan Crisplant in Libya:

    “So far we’ve been getting orders for equipment to ‘keep the wheels turning’ – small orders for various upgrades and essential maintenance. As the situation in Libya becomes more stable, funds will probably become available for larger investments in brand-new facilities – and we’ll be ready and waiting when they do.”
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