How an SME in French-Speaking Switzerland Manages to hold its own on the Market
THE Machines Yvonand SA (THE Machines), which is based in French-speaking Switzerland, is doing good business. The SME is, however, confronted by the challenges of supply bottlenecks and high commodity prices and needs attractive payment terms if it is to survive in the market. SERV offers solutions to these challenges.
06.04.2022
“It’s one of our best years ever,” says Jehona Gaçaferi, Export & Financing specialist at SME THE Machines Yvonand SA (THE Machines). Turnover has grown strongly over the last two years, yet, for some time now, the company has experienced new challenges, largely due to the pandemic: the SME is experiencing delays in the delivery of electronic components, and rising commodity prices are putting margins under pressure. As a Swiss company, it is also in the upper price segment. THE Machines makes up for this with its high-quality products and attractive payment terms, and it is SERV’s support that makes these payment terms possible.
Attractive payment terms thanks to export risk insurance
But what exactly is THE Machines? Everything revolves around pipes and cables at the SME. As mundane as that sounds, the solutions offered by the company, which is located near the industrial region of Yverdon-les-Bains in the French-speaking Canton of Vaud, are ingenious. It is dedicated to the development of complete, sometimes customised, production lines for the manufacture of irrigation pipes with drippers and multilayer pipes for a range of applications. THE Machines is also a pioneer in the welding of tubes in the micromillimetre range and alloys that are difficult to machine.
It has customers all over the world. They generally make only minimal down-payments and sometimes demand bank guarantees amounting to millions for the purchase of a production line. The SME, which has 60 employees, cannot handle such large orders on its own as its credit limit with the bank simply does not allow it. THE Machines has therefore relied on SERV’s insurance policies and guarantees on a regular basis for many years. “We are extremely grateful for SERV’s support because we would probably have to turn down some orders if we didn’t have it,” Jehona Gaçaferi says. SERV’s support also allows the company to enter risky markets and offer its buyers multi-year payment periods at low interest rates. It means that bank guarantees are not a problem and THE Machines’ liquidity remains intact. This collaboration has been in place since the days of the Export Risk Guarantee (ERG), SERV’s predecessor. Jehona Gaçaferi comments: “I really appreciate the relationship of trust that has developed over the years. SERV’s advisers always respond quickly and flexibly, which is indispensable for processing our transactions.”
A new strategy
Until only a few years ago, the majority of the company’s deliveries were to the agricultural sector, but there has been an increase in demand for applications for sanitary installations, heating, aviation and telecommunications in the intervening period. A high level of investment is required for the machinery for these new applications and the orders are increasingly large in volume. While this is, of course, a good thing, it necessitates adaptation to the conditions of these new markets. THE Machines has therefore introduced a new strategy. Where previously the company put stability and security first, it will in future also focus on diversification and growth. This will necessarily entail a greater need for liquidity. Jehona Gaçaferi says: “We are therefore counting on SERV’s support in this growth phase.”
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