Qilu Bank: Preventing funding challenges from hindering progress

Inside a low-temperature warehouse of a large enterprise in Jiaozhou, Qingdao, automated cold chain conveyor lines operate in an orderly manner. Boxes of fresh aquatic products are securely stored at -25°C, ready to be shipped to major markets across the Shandong Peninsula, the Yangtze River Delta, and the Bohai Rim Economic Circle.

As a leading company in the regional cold chain storage and supply chain sector, this enterprise boasts a 32,000-square-meter low-temperature warehouse with a 10,000-ton capacity, 38 automated cold chain conveyor lines, and advanced temperature control systems. It handles an annual turnover of 180,000 tons of various aquatic products, accounting for 35 percent of the total cold chain circulation of aquatic products in Jiaozhou, making it a veritable cold chain hub.

However, not long ago, this industry leader found itself "tripped up" by funding challenges. "The 'payment before delivery' transaction model in the aquatic products industry places immense pressure on us for advance procurement and funding during the peak fishing seasons in spring and autumn, exceeding 50 million yuan ($7.03 million) annually," a representative for the company said. The tight capital turnover not only made it difficult to achieve annual financial cost-saving targets, but also limited collaboration with upstream fisheries, causing the company to miss out on numerous high-quality resources due to an inability to meet prepayment requirements.

The plight of this leading enterprise reflects the broader challenges within Jiaozhou's aquatic cold chain industry. Businesses across the upstream and downstream segments of the industry chain commonly face difficulties in accessing financing, as well as high financing costs, constraining the sector's growth. Recognizing this, Qilu Bank conducted in-depth research into the characteristics of Jiaozhou's aquatic cold chain industry. Aligning with the national strategy to build a strong maritime country, Shandong's provincial goals for a powerful marine economy, and Qingdao's positioning in marine economic development, the bank launched the innovative "Blue Cold Chain Industry Chain Financial Solution". This initiative adopts a dual-driven approach of "empowering core enterprises + extending across the entire chain" to break industry development bottlenecks.

In terms of empowering the core enterprise, Qilu Bank, based on the company's creditworthiness and storage resources, provided a 50 million yuan online trade financing facility to its affiliated supply chain management company. This funding is specifically earmarked for expanding the centralized procurement of dominant seafood products like cod. The financing interest rate is 1.5 percentage points lower than similar products, helping the enterprise save 750,000 yuan annually. "With this funding, we've not only alleviated the pressure from advance procurement payments, but also gained stronger bargaining power with upstream fisheries, significantly reducing our goods costs," the enterprise's representative said.

Concurrently, Qilu Bank used this leading enterprise as a pivot to extend support "bi-directionally" along the industry chain. Through a deep analysis of the industry chain, the bank selected five aquatic processing enterprises with strong growth potential and good compliance, approving a total of 140 million yuan in trade financing credit lines.

"This financing came just in time," A representative from a Qingdao-based aquatic processing company said. "We've not only added new jobs but also increased our annual processing output value by over 20 million yuan. Our annual export volume now exceeds $50 million."

To ensure that blue finance funds precisely serve the marine economy, Qilu Bank established a "triple-flow integration" risk control mechanism, leveraging the core enterprise's cold chain storage system for real-time logistics monitoring and inventory tracking, and utilizing the bank's account system to achieve closed-loop capital flow, ensuring funds are used exclusively for their intended purpose. This mechanism safeguards fund security and provides enterprises with greater confidence for development.

With the support of Qilu Bank's blue finance, Jiaozhou's aquatic cold chain industry chain is rejuvenated. The utilization rate of the leading enterprise's low-temperature warehouse increased from 90 percent to 98 percent, with the single-day maximum throughput surpassing 800 tons, establishing it as one of the busiest aquatic cold chain hubs on the Shandong Peninsula. Upstream and downstream enterprises have seen significant benefits: the five funded aquatic processing companies added 220 new jobs and increased their combined annual processing output value by 120 million yuan. Surrounding the cold chain hub, 46 supporting enterprises in aquatic product processing, packaging and printing, and logistics transportation have gathered, forming a 2.3-square-kilometer marine economy industrial park, highlighting the pronounced cluster effect.