IPCQ
IPCQ specialises in corrosion control for construction, manufacturing, engineering and commercial assets for petrochemical, gas and mining companies.
Need
To fulfil its contractual bonding obligations for its contract with the CBI Constructors Pty Ltd, IPCQ required a bank guarantee. Its bank required a 100% cash security before it could provide the bank guarantee that IPCQ needed.
Solution
We provided a performance and warranty bond directly to CBI Constructors Pty Ltd, allowing IPCQ to secure this high-profile corrosion control contract.
Established in 1971 IPCQ is a Queensland-based company that specialises in corrosion control for construction, manufacturing, engineering and commercial assets for petrochemical, gas and mining companies.
IPCQ is well-known within the corrosive control industry and specialises in site-based projects in Australia and overseas.
For over 25 years, IPCQ has also had corrosion maintenance contracts for large projects like BP Refinery at Bulwer Island.
IPCQ’s reputation for safety, reliability and customer service has helped it develop longstanding relationships with clients, suppliers, inspection authorities and local and state government agencies.
The support offered by Export Finance Australia was integral to IPCQ delivering the contractual requirements of the project whilst still having the flexibility to pursue future contracts. Export Finance Australia’s commitment to understanding our businesses’ needs ensured a smooth and easy process for all stakeholders.
An important new contract
In February 2014, IPCQ was awarded a contract by CBI Constructors Pty Ltd (CBIC, part of the CB&I group), as part of the Inpex Ichthys project in Darwin, one of the largest LNG projects in Australia.
The contract involves abrasive blasting, painting, fireproofing, scaffolding, encapsulation and inspection work on 18 non-cryogenic bulk storage tanks that will hold essential liquids including condensate, propane, fire and service water.
The internal and external coatings provided by IPCQ will prevent contamination and corrosion and extend the life of these assets.
CBIC has confidence in IPCQ’s ability to fulfil this contract, given IPCQ had successfully completed several other contracts for CB&I group companies.
While IPCQ’s bank, NAB, was very supportive of this contract and others in its pipeline, it required 100% cash security before it could provide the bank guarantee that IPCQ needed to fulfil its contractual bonding obligations.
This would have tied up precious working capital, which IPCQ needs to have available to secure new contracts as they arise, and so its business planning consultant, Acumen, recommended IPCQ talk to us.
How we helped
We provided a performance and warranty bond directly to CBIC, allowing IPCQ to secure this high-profile corrosion control contract.
Our performance bond will be in place until practical completion of the project, after which it will revert to a warranty bond lasting 12 months.
By reducing the strain on its cash reserves, our bonds allowed IPCQ to continue tendering for other contracts and continue its diversification strategy into other industries, like mining services.