Sterling Pumps is a Victorian-based manufacturer of standard and custom designed pumps that are used in the agricultural, firefighting, civil, mining, gas and oil, and maritime industries around the world.
Through the sharing of designs, technology, processes and parts, Sterling has developed an excellent reputation for delivering high quality custom pumps to large projects globally.
An exciting new opportunity Sterling won a A$1.2 million contract for the manufacture and delivery of five custom pumps to Hyundai Heavy Industries, which will be used in Hyundai’s existing fabrication yards in South Korea and Malaysia.
As is often the case with manufacturing contracts, Hyundai required bonds be put in place to guarantee the completion and performance of the pumps, before releasing any advance payments to Sterling.
While Sterling’s bank was supportive of this contract, it was unable to provide finance for these bonds unless they were 100 per cent secured.
This would have resulted in a significant amount of Sterling’s working capital being tied up for long periods, which would have limited its ability to complete existing contracts and tender for new ones.
How we helped
We provided US$375,000 worth of advanced payment bonds directly to Hyundai, allowing the advance payment to be released to Sterling so it could begin production.
We also approved a US$125,000 performance bond, which converts to a warranty bond one month after delivery of the pumps.
Through our bonding support, Sterling was able to secure this important contract with Hyundai, which as a leading global shipbuilder could lead to more contracts for Sterling in the future.