The purchase order came from Buenos Aires: three machines for road construction, with a price tag of €2.5 million ($3 million). It’s an ordinary transaction for the Wirtgen Group, a global leader in the market of road-building machines.
Since the 2015 political power shakeup in Argentina, there’s been a lot of infrastructure renewal there, meaning lots of demand for Wirtgen’s road construction machines and tarmac rollers. The construction equipment manufacturer has received more than three dozen such Argentinian orders worth between €500,000 and €4.5 million since 2015, but the success has also caused a headache: trade financing is problematic or impossible.
“The banks’ credit offers for smaller orders are not adequate,” said Reimund Felderhoff, business manager of Wirtgen GmbH, the company’s subsidiary responsible for street construction machinery. “We are financing our orders from Latin America 100 percent through our own supplier loans.”
The fact that a company with a turnover of €2.6 billion and an export share of about 90 percent in auxiliary construction is having this problem isn’t an exception. For many German industrial companies, especially the small and medium-sized, family-owned businesses known as Mittelstand, this financing hang-up is a real problem. “Many banks are no longer offering any financing,” said Ulrich Ackermann, foreign trade expert of the VDMA mechanical engineering association. This is particularly true for orders up to €5 million – so-called “small tickets.”