How To Open New Markets: Alternatives to Asbestos 

Context

Asbestos fibers faced a boom during the mid-20th Century, having a very wide range of applications, such as gaskets, filters, brake linings, roofing sheets, or sewage pipes. Since the mid-1990s, the usage of asbestos started to being gradually phased out due to health concerns. More and more countries banned the usage of asbestos, and today, 66 countries have made the usage of asbestos illegal, yet the main reason why the usage of asbestos is declining continuously is the increasingly strong demand by consumers for asbestos-free alternatives, and the higher risk for manufacturers of being sued to compensate victims of asbestos-related deaths and diseases. In 2025, the number of countries where asbestos fibers are still used continuously has dropped to just 8 countries. We used to trade in asbestos fibers in the 1990s and early 2000s, primarily to fiber cement and brake lining companies, but gradually ended the asbestos trade, in following the worldwide trend to discontinue asbestos.

Challenge

The challenge we faced was to maintain our former asbestos customers, with alternative fibers, and yet, we initially had no idea where to start. As we began looking for alternatives, we quickly discovered that factories who had begun to substitute towards other fibers were generally quite secretive about what they used, in order to keep an edge over their competitors, but also, as many of them were still experimenting with alternatives themselves and did not want to appear as if they did not know what they were supposed to do. Factories typically represent large investments, and some of these companies were publicly traded enterprises, where the public image is very important. At the time, scientific literature was scare, or privately owned, and there were only a small number of expert engineers in the world that had the expertise on how and with what to substitute asbestos fibers. The main challenge for all these factories was to use a fiber that is not asbestos, either naturally occurring or man-made, that would replace the sought-after properties in the final product, all while keeping production costs the same.

Solution

Since information was scarce, we engaged with our various customers, and discussed what solutions they had found for themselves to replace asbestos, which these factories would also do typically when hiring engineers off each other, or when meeting during trade shows. Eventually, it became clear that fiber cement factories were using a mixture of synthetic fibers, natural fibers, and additives to replace asbestos for their final products, and that many had gone beyond a change in the raw material mix, by changing the way fiber cement products were cured. As we continued to explore, we understood that a majority of factories were using unbleached softwood pulp, polypropylene or polyvinyl alcohol fibers, and silicon carbon based additives to replace the physicochemical properties of asbestos. Brake lining and fire retardant tissue manufacturers were using aramid fibers. As we gained this market knowledge, we approached producers of wood pulp who either by chance had a matching product, or were willing to modify their production line to a specialty pulp grade that we could sell, thus helping manufacturers to diversify their sales markets, and helping customers to sourcing new supplies and hence reducing their dependency on just one raw material supplier. 

Identifying Fraud: Aluminum Scraps

Problem 

The aluminum scrap market amounted to $6.55 billion in 2024, or 38 million metric tons sold for the same year, and with a projected Compound Annual Growth Rate (CAGR) of 9.56% between 2024 and 2030. The market’s growth is fueled by an increased supply and consumption for recycled aluminum and approximately 70% of all aluminum scraps are traded internationally (with 30% being collected and sold domestically). Metals trade, does attract a high number of fraudulent suppliers and customers, however. Fake sellers may offer product they do not have, or they may supply inferior quality material, and try to collect advance payment, but will then disappear. Some of them may even go as far as to falsify documents to defraud customers. Fake customers will come up with fake claims, for example, adding sand or stones to the already delivered materials, to try and claim monies back, or default on payments. Additionally, when the market prices increase by a lot, suppliers may seek to re-sell the already sold lots to other customers who may pay a higher price, or when the market price drops by a lot while cargo is already on the waters, customers may try to seek price discounts and threaten not to pick up their orders. 

Solution

First we must understand what product we are selling. Aluminum scraps has many different grades, and the Institute of Scrap Recycling Industries (ISRI) lists 49 alone. All of these grades will come at different prices. A second requirement then is to understand what the prices are and how they work and a solid reference here is the London Metals Exchange (LME) price as the aluminum scrap prices will always align itself against that. Typically the closer the scrap grade is to clean and pure aluminum (typically cables) the close the price will be to the LME price. Already we can identify potentially fraudulent trading partners. If the LME price is at, say $2,350/MT on their 3-month average, but someone offers us a price of $500/MT, we know that this cannot possibly be true. Additionally, suppliers should send photographs of their existing stocks, which a potential buyer can reverse-image search to test whether these pictures are unique or not. Typically, the more often a picture appears in an image search, the more likely the supplier did not actually take these pictures themselves. Typically honestly supplies will however be able to provide a series of similar pictures of the same stocks, something which fake suppliers are unable to do. Higher resolution photographs are more likely to be legitimate, than low resolution photos. We also check the time stamps either on the photo itself, or within the digital signature. Finally, loading pictures of previous deliveries are excellent ways of verifying the legitimacy of trading partners. A good due diligence of the interlocutor is important. While not everybody is on social media, there must be a company, that company must have a commercial registry entry, and a bank account, which we must always verify. Company registries are public and accessible in most countries. Bank accounts can be verified through your own bank. Search the names of the companies and people you are dealing with and see if anything suspicious comes up. Do not hesitate to ask the difficult questions from the beginning and when you see interlocutors starting to become aggressive or defensive, it is usually a sign that something is off.

SME Trade Finance: Letters of Credit 

Context

A Letter of Credit, also known as a Documentary Credit is a trade finance tool used in international trade that allows both the supplier and the customer to use their banks as the underwriter that assumes the counterparty risk. While the risks are not mitigated completely, it remains the safest payment term available to parties transaction cross borders that can mitigate the commercial risks for both the seller and the buyer in the same way. Asides risk mitigation, documentary credits can be excellent tools to finance the cash flows of a transaction or of the parties themselves, depending on how the documentary credit is structured. L/Cs can additionally offer a vast array of designed to expand or accommodate for either of the party’s needs. It is for a trading company an important tool to scale the business up, especially when dealing with Asia, while offering security towards our stakeholders, and in supporting our cash flow better. 

Problem 

Letters of Credit are often costly, and their handling are more complex than transacting without L/Cs. Buyers (who will open the documentary credits) will often require a line of credit with their own banks, and are accessible only to companies. In many countries, this trade finance product is not available to small and medium sized enterprises. For either or both of those reasons. We have had great difficulties to being able to work with Letters of Credit in the United States where these are typically more available to corporations only. 

Solution

Ultimately, we needed to find banks that were willing to handle Letter’s of Credit for us and that were able to doing so well. We had thus reach out to several banks in the United States that were offering Letters of Credit to smaller businesses and contacted more than 20 banks. From here we had to do our due diligence to examine things like, their fees, what trade finance product the banks offer, their fee structure, the bank’s connection to other banks, and whether they have a specialized trade finance team or not and where this team is located. In the end, we have identified four banks able to assist us right away, one of which we have opened a banking relationship with, and three more that we may chose to work with in the future, and as the business grows.

A second solution we have found are through trade finance brokers that will find and connect us, or customers, to banks willing to open documentary credits, which has started to open new business which we did not see as being available to us before. An example is a customer in Brazil with a poor payment history who will now purchase from us against documentary credit.