Involves financing the conversion process of raw materials into semi-finished or finished products.

The supplier retains title to the raw materials and will be the offtaker for the refined product.

Raw materials are delivered to the mill / refinery by the supplier.

The ability of the processor to process raw materials and the offtaker’s payment risk are the key risk factors for the lending bank
The security structure is similar to pre-export transactions, and includes:

• Assignment over Export Contract
• Assignment over Collection Account
• Over-collateralisation