Opening the door for Gilgen Door Systems
The Société du Grand Paris asked its Swiss supplier Gilgen Door Systems AG to provide a six-figure counter guarantee for a term of more than five years. How could the Swiss exporter process this order and still keep liquidity free for other projects?
31.03.2021
Paris is currently home to Europe’s largest infrastructure project: the ‘Grand Paris Express’, operated by the Société du Grand Paris founded specifically for this purpose. As part of this project, Paris’ existing metro network is to be expanded to include a further 200 km and four additional lines. The aim is for 68 metro stations to transport around two million passengers every day by 2030.
A reliable partner
Gilgen Door Systems AG (Gilgen), based in Bern’s Schwarzenburg, was awarded the contract to work on this gigantic, prestigious project. Gilgen will be kitting out 16 stations on the ‘Line 15 South’ section with fully automatic doors, with the order value coming in at 42 million euros.
This medium-sized company has more than 60 years of experience in drive and control technology for automatic door and gate systems. When applying for tenders, Gilgen’s reputation as a reliable, competent partner offering high-quality products and services stands the company in good stead. Ultimately, this helped Gilgen win the contract. The decisive factor was its top-notch score in terms of technology and price, says Robert Hug, deputy head of ADP (Automatic Doors for Public Transport).
The buyer calls the shots
While being awarded the contract is an occasion to celebrate, it also goes hand-in-hand with major challenges: Gilgen needs to comply with an array of highly standardised requirements, all while adhering to a tight time frame. After all, “if a system doesn’t work within a project like this, it’s catastrophic. All you need is a one tiny defect and the entire metro network is brought to a standstill,” says Hug, speaking from years of experience. As a result, the French buyer requested a performance bond amounting to EUR 2.1 million, with a term of 65 months. Gilgen will be paid in instalments, in line with its progress. This means that the last payment will be made in 65 months’ time. In international tenders like this one, the negotiating margin is almost zero. Gilgen does indeed have enough liquidity, “but this means that a large part of it is tied up for the entire term, so we can’t use it for other orders,” Hug explains.
To avoid running low on liquidity, Gilgen applied to SERV for a counter guarantee, combined with contract bond insurance. This sees SERV take on the exporter’s payment risk vis-à-vis the financing bank, leaving Gilgen’s credit limits unaffected. An additional advantage is that the existing guarantee limits for its other ongoing tasks are available in full, meaning Gilgen has more flexibility in terms of pre-financing its business. In short, SERV’s support has opened the door for Gilgen to take on its next large project.
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