Programs emphasize Africa and environment

By Peter A. Buxbaum, AJOT

Smaller companies seeking to divine the latest export trends should turn their attention to the priorities of the Export-Import Bank of the United States. The independent federal agency dispenses loan guarantees that supports export finance and working capital.

Ex-Im Bank held a two-day conference in Washington earlier this month, during which it presented awards to US small business exporters. Among the special categories of exporters recognized were those exporting environmental equipment and those exporting to sub-Saharan Africa.

‘Environmental products are a top priority,’ said Ex-Im Bank Chairman and President James H. Lambright, who presented the awards. “Another top priority is to strengthen support for US exports to sub-Saharan Africa, both to facilitate economic development in the region and to create and sustain US jobs.”

Ex-Im’s environmental export program, established in 1994, has since supported $2 billion in sales. Last year Ex-Im Bank authorized $385 million in working capital guarantees for environmental exports, double the level supported in the previous year.

‘There are two priorities to the program,’ Lambright said, ‘to support small businesses in the environmental sector and to maintain US global leadership in this area. We want to let buyers know that we want to help them acquire environmental technologies and products.’

‘Some small and medium sized enterprises have challenges obtaining sufficient working capital to support export growth,’ explained Martha Gentry, vice president of JP Morgan’s Global Trade Services, in an interview with the AJOT. ‘Ex-Im Bank has several programs established to help US based companies generate more exports.’ JP Morgan’s Global Trade Services won Ex-Im’s 2007 small business lender of the year award.

Smaller exporters, with annual revenue $10 million to $500 million, are often challenged in competing internationally because their clients want open account terms rather than cash payment, Gentry said. ‘The Ex-Im programs help them grow their export businesses as well as mitigate some of the foreign risk they would have to assume if they had to sell on open account terms,’ she added. The US Department of Commerce estimated that 90% of US exports came from small- and medium- sized enterprises in 2004.

Robbins Company, based in Solon, Ohio, received the Ex-Im’s 2007 Small Business Environmental Project Exporter of the Year award. Lok Home, the company president, related that Ex-Im Bank had helped get his company off the ground fifteen years ago. ‘Now we are a $200 million company and Ex-Im helped again,’ he said.

Robbins, which designs and services tunnel boring machinery, won a $131 million contract to supply equipment and services to build an irrigation tunnel in India, backed by an Ex-Im Bank $25 million working capital guarantee. The tunnel will funnel water to a reservoir in Andhra Pradesh to supply drinking and irrigation water to 516 villages. To protect the environment, the Indian government decided to run the tunnel under the Rajiv Gandhi Wildlife Sanctuary, rather than building a pipeline through the sanctuary.

‘We were encouraged by the fact that the Indians are interested in protecting their environment while encouraging growth and not disturbing the tigers in the sanctuary,’ said Home. Winning the project allowed the company to add 50 jobs to its rolls, he added.

American General Supplies Inc. of Gaithersburg, Md., received the Small Business Exporter of the Year for sub-Saharan Africa. An exporter of aircraft parts, the company began working with Ex-Im Bank in 1992. By using Ex-Im Bank’s working capital guarantee program, has increased its workforce from 25 to 65, and sales from $11 million to $20 million.

“In 2007 we expect sales to top $30 million because we’ve won a major contract with Angola Airlines,” said American General Supplies Chairman and President Kassa Maru. “Before using Ex-Im Bank we only were able to handl