Driving growth through strategic financing with Eurocold

Avraam Solomon, CEO of Eurcold and Kanani Draper, CCO of Eurocold sat down with Food & Drink Business Magazine to share more about Eurocold's tailored solutions that help businesses navigate logistics, sustainability, and operational efficiency.

In Australia’s food and beverage sector, where maintaining an unbroken cold chain is critical, refrigerated transport company, Eurocold, is offering tailored solutions that help businesses navigate logistics, sustainability, and operational efficiency. Kim Berry writes.

Eurocold was launched five years ago on the foundation of more than 60 years’ experience in the refrigerated transport industry. Managing director, Avraam Solomon says its creation was in response to a gap in the market and changing industry demands. Historically, the Australian refrigerated truck industry has been dominated by small-scale operators who assembled trucks in a fragmented manner or owned their own truck. Solomon saw an opportunity to create a networked, longterm solution that would deliver superior vehicles and services tailored to the needs of food and transport operators.

“We could see a dynamic shift in mindset in the industry, moving from one of ownership to usership, creating a larger market for leasing vehicles,” Solomon says. While traditionally, Australian operators preferred to own their refrigerated trucks outright, rising compliance requirements and operational costs saw many businesses find it increasingly difficult to justify the significant capital investment. “In the early days we quickly realised that if we wanted to scale, we needed a very strong balance sheet.”

“We connected with French company, Petit Forestier, that has a presence in 28 countries and 80,000 vehicles. They had the balance sheet and the capital we needed, but more importantly they had the know-how and understood exactly what we were doing. “For us that was the light bulb moment, we knew where we were heading, where the future of the business was, and how the industry was going to transform,” he explains. “It confirmed our long-play mindset. Why would you buy something and keep it for 10 or 15 years when technology is evolving so quickly?”

Solomon says the company appreciates what it takes to convert an industry, but Eurocold is already moving the needle. It’s a 10-year goal and a transformation the company wants to lead in Australia. The company’s rental service allows businesses to scale their fleets up or down depending on demand.

“If you win a contract, you can instantly expand your fleet without having to invest millions upfront,” Solomon explains. “And if that contract ends, you can adjust just as easily.” This flexibility has been especially beneficial postpandemic, as businesses navigate shifting market conditions. “Coming out of Covid, our customers have realised that managing their own fleets is expensive and inefficient,” he says. “They’re seeing the value in letting us handle it for them.”

SUSTAINABILITY FOCUS

With sustainability now a business imperative, Eurocold has a range of projects and systems in place, including extending the life cycle of its fleet. Eurocold chief commercial officer, Kanani Draper, says 100 per cent recycling or a fully recyclable loop of any sort of manufactured process is a critical piece to the company’s sustainability strategy. “The long-term hire customers get a brand-new asset for the first four years. When that asset’s ready to be retired, it doesn’t sit in a vehicle graveyard, it gets pulled into our short-term fleet.

“It’s one of the reasons why the rental model is advantageous. Obviously, the biggest solution to sustainability challenges is to have fewer trucks on the road but the more efficient we are with what we’ve got, and using those vehicles for their entire useable life, is the next best solution,” Draper said. The company also prioritises the reduction of food waste. “If a refrigerated truck breaks down and the food inside spoils, that’s an enormous cost to both the business and the environment,” Draper says. “By ensuring the best thermal efficiency and reliable fleet management, we help keep food waste to a minimum.”

Eurocold partners with global brands like Carrier and Thermo King to integrate the latest refrigeration technology into their trucks. These solutions reduce diesel consumption and improve energy efficiency, helping customers meet stringent emissions targets. Solomon says there is also an education component. “We live in a vast country with different temperature ranges and therefore refrigerated truck needs. The truck you need in Perth or Cairns is different from the one you need in Melbourne.

“Having that expertise and putting the right asset into the right city is becoming more important for us. We’ve listened to the market and now we’re also teaching the customers in those regions,” he says

STRATEGIC GROWTH PARTNERSHIPS

To drive its ambitious growth, Eurocold has partnered with DLL, a global equipment finance company and part of the global Rabobank group. Drawing on its deep expertise in the food and agriculture sector, DLL provides customised equipment finance solutions. It has allowed Eurocold to acquire specialised equipment for the refrigerated transport sector that ensures perishable goods are transported and stored safely and efficiently across Australia. “DLL supply chain finance specialist, Steven Davey, contacted me and we connected immediately. DLL is focused on products for leasing and financing assets, which is the core of our business.

Steven says “Our customer-first and strategically growth-focused approach to the market made partnering with Avraam and the Eurocold team an obvious choice. As their business has expanded, we’ve been able to enhance our support both locally and on a broader international scale.” “It’s not our exclusive financier, but it is number one. There was alignment from the outset and has been a seamless partnership,” Solomon says. Davey said Eurocold’s vision was very clear.

“Those early conversations with Avraam showed a very clear vision for where he wanted to take the company. His industry expertise was also very apparent. It made getting things set-up and running a lot easier. “DLL is not short-term focused, it’s not transactional. We like to work with companies and help them grow and scale. Both here and globally,” Davey says. For Eurocold, the partnership provides the financial muscle needed to expand its fleet.

““Without DLL, we wouldn’t be able to scale at the pace we are,” Solomon says. “Having that stability allows us to have confident conversations with customers.” Looking ahead, Eurocold is determined to drive further change in Australia’s cold chain logistics sector.