Fast Turnaround on Medium-term Insurance Lands Big Sale for Sacramento Company, Leads to More Business in Turkey and Other Countries, Exporter Learned About Program at San José Seminar
FOR IMMEDIATE RELEASE February 21, 2000
Linda Formella (202) 565-3200
Tary Farnholtz, founder and president of Select Homes International Inc., a small business headquartered in Sacramento, CA, that produces structural insulated panel manufacturing systems for commercial and residential buildings, used to think that the Export-Import Bank of the United States (Ex-Im Bank) was only for big companies. Then Farnholtz heard Ex-Im Bank Chairman James A. Harmon address a group of small business representatives in San José in January, and his business outlook changed -- rapidly. Within a month after applying, Select Homes received approval from Ex-Im Bank on a $535,000 medium-term, comprehensive insurance policy that is enabling the company to expedite the sale of a manufacturing system to Koca Prefabrik of Istanbul, Turkey. The manufacturing system, which will be operational by May, will help the city of Izmit to rebuild after widespread destruction of housing caused by earthquakes last September. And this transaction is only the beginning.
I was shocked by how well Ex-Im Bank performed for us on this transaction - they've not only expedited this contract but have also opened doors for us in the Turkish market beyond our reach, said Farnholtz. I had heard of Ex-Im Bank before, but until I heard Chairman Harmon speak at the outreach meeting, I had no idea of the possibilities for a small, growing company like ours. Ex-Im Bank's insurance enabled us to offer the financing terms necessary to finalize this sale, and we expect to see several million dollars worth of business from this buyer alone. Ex-Im Bank's support is also having a snowballing effect that's opening up a lot of business in other regions of Turkey and in other countries. Farnholtz is already developing new contracts to sell additional manufacturing systems for schools in Turkey and residential homes in Athens, Greece (also recovering from a recent earthquake), as well as export sales to the Dominican Republic, Argentina, Mexico and the Philippines.
Ex-Im Bank is committed to providing small businesses with the quality service and quick turnaround that is needed to support sales in developing markets such as Turkey, Ex-Im Bank Chairman Harmon said. The transaction follows the recent announcement of a new $1 billion Ex-Im Bank program to expedite financing of purchases of U.S. goods and services by small and medium-sized Turkish businesses.
Select Homes is the exporter and major supplier on this transaction. The company currently operates a panel production facility of seven employees in Sacramento and is planning an expansion this spring that will increase production capacity and add at least five more production and support personnel.
Other U.S. suppliers involved in the transaction, most of which are also small businesses, include James Hardie Inc. of Mission Viejo, CA; Haley Metal Fabrication of Rancho Cordova, CA; and Resin Technology Company of Ontario, CA. In all, approximately seven small-to-medium-sized businesses will benefit from this transaction.
The insured is PNC Bank of Pittsburgh, PA, which is providing financing to the buyer and primary source of repayment, Anadolubank, A.S., a Turkish bank with which PNC maintains a relationship. The broker is Export Insurance Agency of Walpole, MA.
Ex-Im Bank is open under all of its short-, medium- and long-term financing programs in Turkey in both the public and private sectors. This financing will enable the Turkish government and Turkish businesses to buy the raw materials, capital goods and services to rebuild homes, businesses and infrastructure, and maintain trade between the United States and Turkey.
Ex-Im Bank is an independent U.S. government agency that helps finance the sales of U.S. goods and services to developing and emerging markets around the world through loans, guarantees and export credit insurance. In fiscal year 1999, Ex-Im Bank authorized $420 million in financing to support U.S. exports to Turkey in 47 transactions, of which 45 transactions totaling $108 million in financing supported sales to small and medium-sized Turkish businesses. Worldwide in fiscal year 1999, Ex-Im Bank supported nearly $17 billion of U.S. exports.