Jorge Rave, Regional Manager, Mexico

April 28, 2015

Briefing on EDC’s Pull Strategy A Key Tool of Trade Creation

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EDC’S PULL STRATEGY

EDC’s Pull strategy is one of our most important trade

creation tools.

EDC’s participation in financing facilities for key foreign

buyers helps create opportunities for Canadian

exporters, in particular, small businesses.

Corporate or project lending provided by EDC to a

targeted foreign company is leveraged to influence

their future procurement decisions.

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A pull facility is:

a financing commitment by EDC to a foreign buyer that is

not tied to a specific contract.

an opportunity for EDC to influence the foreign buyer’s

future procurement decisions and ‘pull’ exports from

Canada

Best efforts commitment by the foreign buyer to

cooperate with EDC in developing trade from Canada.

EDC’S PULL STRATEGY – DEFINITION OF A PULL FACILITY

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› 1. Introduce and deepen the penetration of Canadian

companies into global and regional supply chains of

major international buyers;

› 2. Create trade opportunities for Canadian companies in

new markets where Canada is traditionally not well

known but where opportunities are present; and

› 3. Promote Canadian emerging expertise and innovation

in sectors where there is low penetration or awareness of

Canadian capabilities.

MAIN OBJECTIVES OF EDC’S PULL STRATEGY

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EDC provides a loan to a targeted foreign buyer with procurement needs that

match Canadian expertise, and the foreign buyer commits to working with EDC

to buy from Canada.

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In collaboration with DFATD and the Trade Commissioner Service, we

introduce the foreign buyers to qualified Canadian suppliers primarily through

match-making missions.

= The foreign buyer procures from Canadian businesses, bringing benefits to the

Canadian economy.

HOW DOES A PULL FACILITY WORK?

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Identify Buyers Needs

Identify foreign buyer procurement staff

Acquire/deepen knowledge of foreign buyer procurement

history and processes

Raise profile of Canadian exporters

Provide information on Canadian supply capabilities to

buyer’s procurement personnel

Matchmaking

Proactively bring exporters together with foreign buyers

Promote new / ongoing business with borrower

EDC’S PULL STRATEGY - CONNECTING CANADIAN COMPANIES

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Regular engagement with and reporting from buyer on Canadian

procurement - at least annually

Track Canadian companies supplying to the buyer, in particular new

suppliers and SMEs.

Track the value of procurement from Canada over the life of the loan

Track “Connections” of exporters to pull buyers (NEW for 2015)

EDC’ S PULL STRATEGY - MONITORING & REPORTING

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PULL FINANCING TRANSACTION - STAGES

1. Research Foreign Company

EDC/DFATD collaboration

Creditworthiness

Procurement/capex plans

Country and industry info.

2. Engagement with “Pull” Target

Ideally DFATD & EDC

Verification of research

Obtain financial, business + capex plans

Initiate financing structuring discussions

Assess engagement “receptiveness”

3. Signing of Pull Financing Transaction

EDC led

Bilateral, syndication or project financing

Foreign company signs Pull Letter (non-binding)

Willingness to engage in matchmaking with

Canadian suppliers

4. Post-Signing Engagement with Foreign Company

DFATD / EDC

Match-making events, in & out bound missions

Monitor engagement and Canadian procurement;

report results

Evaluate potential for new pull financing

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EDC’s pull facilities supported procurement from 1,800 Canadian exporters

last year, 91% of whom were SMEs.

Pull facilities have now been put in place by EDC in 47 countries. These

facilities have supported Canadian export trade for more than 5,000

Canadian exporters, the vast majority of them (> 85%) being SMEs

More than 80 active pull relationships with foreign buyers around the world,

in sectors that match Canadian expertise.

Examples: Petrobras, PEMEX, Noble Group Ltd., Tata Steel Ltd., Vale,

Telefonica SA, Plastic Omnium GmbH, Benteler International, BG

Energy Holdings Ltd., ConocoPhillips, Chevron Phillips Chemical

EDC’S PULL STRATEGY – OVERALL PERFORMANCE

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EDC’S PULL STRATEGY - WORKING WITH TCS

Since 2013, EDC and the TCS have collaborated on assessment of certain pull

candidates (prospects) and in the execution of EDC’s pull account strategies.

Currently, a total of 20 pulls and prospects are targeted for enhanced EDC-TCS

cooperation (EDC-TCS pull pilot project)

Examples: Tata Power, Noble Energy, VW, BMW, SOCAR, PEMEX.

Through this project, EDC and TCS collaborate by:

Early engagement with targeted foreign buyers in understanding interest in

Canadian supply.

Assisting in identifying qualified Canadian suppliers to introduce to foreign

buyers.

Planning and supporting the execution of Matchmaking/introductory

initiatives as required.

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Joint engagement strategy (JES) → (TCS: Procurement, Intros / EDC: FIN &

MM)

Pemex (O&G): JES in market & successful matchmaking (GPS, CMP, missions)

CFE (Power): JES in market & successful matchmaking (2015 inbound mission

Canada through NAPP)

America Movil (ICT): JES in market (TCS: Procurement/EDC: FIN) & successful

matchmaking (MWC 2014 & 2015, plus ICT missions)

Metalsa (TRN): JES in market & EDC also financed ISE Metal for the

construction of their plant in Saltillo.

PULL COLLABORATION IN PRACTICE (EXAMPLES FROM

MEXICO)

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EDC’S PULL STRATEGY - DEALS ACROSS THE GLOBE

PULLS PRESENT IN EMERGING AND ADVANCED MARKETS