Avalon Professional Web Trade Pte. Ltd.

completed

APW is a new trading company, based in Singapore, that sources purchase orders (POs) for home furnishings from US buyers, and subcontracts production on the POs to SME manufacturers, that form part of the APW network, in the Philippines. The APW network is comprised of SME furniture manufacturers that are prequalified by APW, based on their product quality, production reliability, environmental standards, size, export experience, proprietor quality and various other criteria. The SMEs, that are part of the APW network, benefit from APW''s marketing activities abroad as well as financing for pre-export activities such as raw material procurement and labor cost. APW''s expansion plan includes extending the APW network to China, Indonesia and Thailand. This expansion strategy will enable APW to offer a product line to meet the full market demand ranging from high end, high craftsmanship, high margin products, to lower end, lower margin products, mass produced. Furthermore, the geographic expansion will allow APW to take advantage of raw materials indigenous to each region. This expansive product line supports APW''s strategy to offer international buyers quality products sourced from Asia for competitive prices.IFC''s investment in APW is a pioneering replicable model to promote SME development through broad investment. APW will: (i) help SMEs obtain much needed working capital financing, presently unavailable due to the SMEs size and lack of collateral; (ii) increase SME''s market reach; (iii) create a conduit through which SMEs can benefit from volume raw material discounts; (iv) encourage international buyers to source production from the emerging markets in South East Asia. APW''s local production monitoring provides international buyers additional comfort to outsource such production to the Philippines. APW''s success will translate into growth in furniture exports from Cebu and as APW expands, throughout the region. Being part of the APW manufacturing network will also promote greater transparency and an adequate level of environmental standards amongst the SMEs. The World Bank''s main focus in the Philippines is poverty reduction facilitated through enhanced economic growth. This project fits well with the World Bank strategy as SMEs are a major source of employment and wage income for a local labor force suffering from high unemployment. IFC''s investment in APW is also consistent with IFC''s strategy to finance SMEs through broad investment rather than directly in the SMEs. Furthermore, the SME sector is one of the most dynamic sectors essential for the necessary economic growth in the Philippines. Therefore, APW contributes to improve the growth potential of SMEs by providing access to efficient financing and facilitating access to global markets.