With facilities located in Houston, Texas, and Marrero, Louisiana, Mid-South Control Line is a supplier and manufacturer of hydraulic control lines, tubing encased conductors, and cable protectors, which are used during completion of oil and gas wells. The company performs a number of manufacturing steps in-house, providing its customers with customizable solutions.
The company was concerned about providing open account credit terms to its foreign buyers. It was too small to take a financial hit when buyers don’t pay. In addition, Mid-South Control needed funds to fulfill its export funds as its cash flow was limited.
Mid-South Control Line uses the agency’s export credit insurance to provide open account credit terms to its foreign buyers and protect against foreign buyer nonpayment, especially in riskier markets. EXIM’s export credit insurance is a popular product among U.S. exporters. The policy covers up to 95 percent of the sales invoice against nonpayment due to commercial (e.g., bankruptcy, protracted default) and political (e.g., war, insurgency) risks.
The insurance also improves U.S. companies’ competitiveness in the global marketplace. While many American exporting companies resort to cash in advance to avoid nonpayment risk, most foreign competitors are able to offer open account credit terms, which are significantly more attractive to potential buyers. They expect credit terms, and companies that are unable to extend credit may lose out on valuable opportunities.
EXIM has also helped Mid-South Control Line obtain working capital loans from their lender, J.P. Morgan Chase and Co. Its working capital guarantees enabled the company to obtain the private sector financing. EXIM provided a guarantee to the lender for 90 percent of the nonpayment risk. EXIM’s guarantee means lenders are more likely to extend loans to exporters, as they only carry 10 percent of the risk. As a result, Mid-South has had funds available to fulfill its ever-growing international sales orders.
Mid-South Control Line has grown from two to 20 employees, is now a global enterprise – exporting to 37 countries. EXIM has supported $116 million of the company’s exports since 2014 and $38.2 million since 2018.
Founder and President Rick Lore, Sr. never imagined this growth when he started the company 30 years ago. Lore attributes much of his company’s international success to EXIM. “Without the EXIM coverage, some of these orders would not have happened,” he said. “We are one of the largest exporters of our types of products in the USA. It has been a great feat to see our growth in the international market that we work in, and EXIM has played a huge part in our success.”