Flovac Vacuum Sewerage Systems
Flovac Vacuum Sewerage Systems (FLOVAC) provides solutions to difficult sewage engineering problems in unique geographic areas and in areas that are environmentally sensitive, using vacuum technology.
Need
To secure a large contract in the US, FLOVAC needed to provide a performance bond, which had to be from a government-approved issuer in the US.
Solution
We provided FLOVAC with a performance bond, which freed up cash flow and supported the delivery of its US project.
Flovac Vacuum Sewerage Systems (FLOVAC)’s innovative vacuum technology and monitoring systems are helping flood-prone areas like Key Largo, Florida with its hurricane preparedness, and we were able to support with finance.
FLOVAC solves difficult sewage engineering problems in unique geographic areas and in areas that are environmentally sensitive, using its vacuum technology.
With operations set up in Australia and across Europe, FLOVAC has been a global business since its inception in 2005, providing its services to clients across the world.
I have no idea where else we could have gone to find someone with the knowledge of US bonding requirements, US financial institution contacts and a willingness to support an Australian company trying to find its feet in such an important market. Export Finance Australia and its people were very helpful and knowledgeable and are vitally important to Australian businesses.
John Radinoff
CEO, Flovac
John Radinoff, CEO of FLOVAC said that the US has been a focus market for the growth of the Australian-based part of the business.
While, in Australia, bond requirements are often 10-20% of the contract value, in the US it is not uncommon for the requirement to be 100% of the contract, and for contracts with government bodies, the bond issuer must be an accredited American financial institution. This often makes it challenging for Australian businesses to win these types of contracts.
Finding the right finance instrument to enter the US market
With 12,000 houses and shops located in an area that is particularly vulnerable to large storms and hurricanes, FLOVAC’s monitoring system was just the solution that the Key Largo Wastewater Treatment District needed.
FLOVAC won a contract under a program for the US Army Corps of Engineers for hurricane preparedness to install its monitoring system in Key Largo to help prevent sanitary sewer overflows and warn of potential issues.
“They want to know which parts of their sewer sanitisation system are down, which parts are underwater and which homeowners have been impacted,” John explained.
“By having a monitoring system in place, they can see all the assets in their network – and that’s what we were hired to do.”
As the Key Largo Wastewater Treatment District is a government body, this meant FLOVAC needed to provide its bond via an American, accredited institution.
Going global with the right partner
As Australia’s export credit agency, at Export Finance Australia, we have existing relationships with accredited providers in the US and can partner with those organisations to support Australian businesses. This is something that Australian banks are often not able to do.
“Export Finance Australia has supported a number of businesses with bonds in the US, so they are aware of how the process works and what those requirements are,” John said.
We were able to work together with an American, accredited institution to support FLOVAC to meet the performance bond requirements to secure the contract in the US.
“The support from Export Finance Australia in helping secure and deliver this project was essential,” John explained.
Having such a major project secured in the US is already supporting the business to build its reputation in the US and has also increased awareness of its unique capabilities in Australia.
