Loan bundling saves money

June 19, 2014 Tine Bremholm Kokfelt

FLSmidth can support the financing of a whole range of projects, including smaller purchases. Customers do not have to come to FLSmidth with a complete project or even a very large project in order to benefit from financing solutions. 

In Turkey, the cement market is booming with strong fundamentals for growth, but also structural challenges. In this emerging market, financing is very important and FLSmidth recently helped Limak Cimento combine several smaller loans into one larger financing package. Limak Cimento is the third largest cement producer in Turkey and has acquired several plants that need modernisation. 

FLSmidth helped secure the financing solution from Denmark’s Export Credit Agency (EKF), alongside a German state bank, the KfW IPEX-Bank, signifying a new cooperation between FLSmidth and KfW. The loan, totalling 8 million euros, includes financing of imported equipment and services at three Limak Cimento cement lines – Balikesir, Trakya, and a new line at Trakya. It includes filters for all three plants to reduce dust emissions.

Ahsen Hussain, regional sales manager for FLSmidth’s Air Pollution Control activities explains, “FLSmidth secured EKF financing for the delivery of air pollution control technology to ensure that the three Limak cement plant sites can all meet international environmental standards, as laid out in the World Bank’s Environmental, Health and Safety Guidelines for Cement and Lime Manufacturing.”

In addition, for the Balikesir plant, FLSmidth delivered a pyro-processing upgrade. The project comprised a complete pyro package with modernisations to the existing kiln. After commissioning, expected in late 2014, the clinker capacity at Balikesir will be increased by 100% to 2,600 tpd.

Read more about funding for projects


“Individually, the FLSmidth contracts would amount to quite small loans, but FLSmidth helped facilitate financing them as one package.”

Tine Bremholm Kokfelt, Head of Project and Export Finance, FLSmidth

Smaller loans in one larger financing package
Individually, the FLSmidth contracts would amount to quite small loans, but FLSmidth helped facilitate financing them as one package along with financing of other Limak contracts with other European suppliers:

Tine Bremholm Kokfelt, Head of Project and Export Finance at FLSmidth, explains: “Limak wants to optimise international borrowing but also wants to optimise procurement by shopping around and taking the best single equipment supplier. It is very hard to finance just one single piece of equipment, but when we bundle them into one facility under the EKF umbrella, it becomes a very good solution.” 

Positive new relationships

This type of financing is currently being referred to as the “Limak model” in Turkey and is a good example of how arrangements like this can work. Limak Cimento collaborated with the German state bank, KfW IPEX-Bank for the other European supplies, but this was the first collaboration with both EKF and FLSmidth.

“I had already engaged with the KfW bank in Germany, and I found it very easy to work with EKF and FLSmidth, as they demonstrated great flexibility. They all supported the deal and combining the orders into a larger financing package was a very good solution,” says Erkam Kocakerim, Business Development Director of Limak Cimento.

Anders Vium Gjelfort, underwriter at EKF comments, “EKF guaranteed this “loan bundling” and we believe it will be a good starting point for further cooperation with the German KfW – which is also strong within financing of mining projects – an area that  represents new territory for EKF”.

The “Limak model” has helped to open the door to a valuable, new customer and to the Turkish market. FLSmidth and Limak Cimento are currently considering a new greenfield project, where the financing through EKF is again very important.


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