Cegasa designs and manufactures customised energy storage solutions for its customers in Vitoria. The boom in renewable energies has boosted demand for the lithium-ion batteries it produces, doubling sales every year. To consolidate its strong growth and meet its business plan, Cegasa needed financing resources and has turned to Kaizen Consulting to access them. In the last year they have obtained new financial resources from traditional and alternative banks to continue with their plan: to be part of the top three European manufacturers in Lithium-Ion. This is what José María Dávila, Cegasa’s financial director, explains in this interview.
– Cegasa is a benchmark in batteries. How has the rise of renewables changed your business?
– We design and manufacture our own customised energy storage solutions. In Spain, we are a reference and we work with two different products: zinc-air batteries and lithium-ion batteries, which are differentiated by their internal technology and their use. The zinc-air batteries are used when continuous energy and durability are required for long periods: for example, for road signalling, alarms with independent power supply, railway signalling, or livestock farms. Where there has been a boom in demand is with lithium-ion batteries: our niche market here is residential self-consumption applications with a minimum capacity of 13 kWh, sufficient for an average household in Europe, and also systems for commercial and industrial applications up to 4 MWh, both grid-connected and off-grid.
– When and why did you seek to Kaizen Consulting?
– We got in touch a year ago because we are growing a lot with renewables: 60% last year, and lithium-ion batteries are doubling sales yearly. This growth needs financing, and the banks we worked with, were no longer covering all our needs. The Sherpa Capital fund, which is Cegasa’s shareholder, recommended that we could approach Kaizen Consulting. José Roca immediately understood our situation, and we started working with his team, who are professionals and have extensive experience in this field: they proposed financing solutions that suited us.
– What new funding have you obtained?
– With the help of Kaizen Consulting we have signed new financing from traditional banks and alternative banks. We have signed contracts with new banking entities, with which Kaizen has very good access, and we have also closed agreements with alternative financiers to which we did not have access. Their personal knowledge of the markets and experience opens doors and they are very involved. For us, the Kaizen team is like an extension of our finance department. They are part of the team: they are the specialists who are focused on finding new financing and offer us agile options that meet our needs.
– Are traditional banking and alternative banking the most suitable pool for financing now?
– No doubt about it. Traditional banking has always accompanied us and is fundamental to our development. And alternative banking is necessary because it provides you with different solutions and structures and faster decision-making.
– Are you open to exploring new financing formulas?
– Yes, because until now we have closed confirming, factoring, and different types of loans… But now we are open to more alternative formulas that we find interesting. Kaizen Consulting takes care of all this market exploration for us: there is a lot of hidden work because they comb the market of financiers to find the products that fit us at any given moment. They separate the wheat from the chaff and present us directly with what they know we are interested in. It is a very specialised job, which sometimes goes unseen but provides us with solutions quickly. For growing companies, I think it is ideal to have the know-how of specialists, who complement our financial department: they have the knowledge, and thanks to their agenda, doors open for you and you receive the right attention to obtain liquidity.
– What is the business plan now?
– We have already exceeded the objectives of our strategic plan ahead of schedule. We are now updating it to the challenges we face in the commercial and industrial sector. We want to consolidate our growth and we aspire to be among the top three lithium-ion battery manufacturers in Europe: it is an achievable goal. In Spain, we are almost the only company that produces these batteries and with renewables the growth is exponential. The change in the energy mix is an industrial revolution. With renewables, energy storage is needed and we differentiate ourselves through R&D and customer service. That is our path.