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Insurance case study: Bega Cheese

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Bega Cheese not only sells its products in Australia, but exports to over 50 countries across the globe and as a result knows all too well the importance of credit insurance when trading in overseas markets. Bega Cheese, as we know it today, has been in existence for over 100 years and has been exporting since 1995.  With more than 30 percent of its production destined for overseas markets and total exports of close to $100 million, Bega Cheese needs credit insurance in place to ensure that trading with overseas partners and expanding into new markets is a safe and secure way of doing business. Grahame Hocking, senior manager for Sales & Marketing at Bega Cheese explains: "Basically it gives us more flexibility to go to the market with longer trading terms as letters of credit are quite stringent and obviously need to be funded. Credit insurance gives us the security we need." Atradius has been Bega Cheese’s credit insurance provider since it began exporting, and the relationship remains strong over a decade later. "The relationship with Atradius has grown over the years and it has been very positive. We’re pretty isolated sitting more than 400 kilometres away from Sydney and the service they provide is excellent," Hocking remarks. "The dairy industry is a large exporter of product in Australia and our Account Manager in Atradius understand not just the dairy industry, but other companies within the industry." Bega Cheese makes use of this expertise whenever it is exploring new markets or customers. "If we’re in discussions with a new customer, we put an application into Atradius to give us an understanding of whether this customer has the credibility or the financial situation to be able to pay us and that gives us a good background pretty quickly on whether we should be dealing with them or not," he explains. It is also beneficial that Atradius is an international credit insurance provider and therefore can offer on-the-ground expertise in many of the markets to which Bega Cheese exports, he says. "There are other service providers that don’t have the networks that Atradius does and therefore don’t have the ability to get information on companies based overseas as easily. That is definitely a consideration for us." Bega Cheese recognises this expertise and always takes the advice that Atradius provides on board. "If we can’t get credit insurance on a new customer we normally reconsider our position pretty quickly unless we can get pre-payment," says Hocking. "If Atradius raises the black flag, it definitely makes us sit up and take note." When the time has come to make a claim against the credit insurance policy that Bega has in place, he says that Atradius have always acted quickly and efficiently. "We have had the occasional issue crop up and Atradius was very supportive during those periods. They certainly came through with the coverage that we had in place and ensured that our liability was much less than it could have been," he explains. "If we didn’t have credit insurance we would have been very limited in our opportunities to expand our market globally and considering 16 years ago we didn’t export one kilo of product, we’ve done fairly well." -Sara Carden is the PR representative for Atradius

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