INTRODUCTION
Sutphen Corporation is a Dublin, Ohio, fire truck manufacturer established in 1890. Sutphen is the oldest, continuously family-owned fire truck manufacturer in the country. As a small business operating four plants around the Dublin area and one plant in Pennsylvania, Sutphen manufactures a full line of emergency response vehicles to support firefighters around the world.
Lynn Rich, International Sales Application Engineer for the company says “Sutphen Corporation’s mission is to build the safest, most reliable fire apparatus in the world through innovation and customer focus and we are extremely proud of what we do.” The lasting success Sutphen enjoys today, however, has not come without challenges.
CHALLENGES
In 2008, at the height of the global financial crisis, Sutphen saw its purchase orders dip to half of previous levels. Sutphen realized an immediate need to expand to markets outside of the U.S.
It made growing its exports a top priority, dedicating resources to find opportunities overseas. As a small business, however, Sutphen had limited resources to market its products internationally. Fortunately, Sutphen learned about the Ohio International Market Access Grant for Exporters (IMAGE), which is designed to help offset such marketing expenses. The IMAGE grant is funded by the state of Ohio and the U.S. Small Business Administration (SBA) to increase exports and create jobs. It provides a 50% reimbursement up to $10,000 per year for qualifying activities. Lynn told me that her company has received this grant for the past several years and that they are “very appreciative of the support from the government.”
Additionally, while trying to grow its international market share, Sutphen has had to overcome trade barriers imposed by other countries. China, for example, requires a Certificate for China Compulsory Product Certification for fire truck imports. This is a costly and time consuming process that requires the manufacturer/exporter to arrange for Chinese certifying officials to come to the U.S. inspect and approve manufacturing plants. China is the largest customer of Sutphen’s products and Sutphen needed to comply with the CCC Product Certification requirements in order to be eligible to have vehicles exported to China. All of these factors equate to a longer sales cycle and tighter cash flow for Sutphen Corporation.
THE SOLUTION
To increase liquidity and mitigate the economic and political risks in foreign markets, Sutphen has used Export-Import Bank’s (EXIM) Export Credit Insurance and Working Capital Loan Guarantee (WCLG) products. With the WCLG, EXIM works with the exporter’s private bank to help secure financing for overseas sales. The exporter can use the loan from the bank to pay for the labor, materials and other inputs required in fulfilling export sales. With Export Credit Insurance, the exporter is protected against nonpayment in the event of a buyer default. In Lynn’s words, “Sutphen has been a direct beneficiary of EXIM’s reauthorization, and having EXIM’s support afforded the company the confidence to continue to pursue new opportunities and open up new avenues in international markets.”
LEARN MORE
To find out more about how export credit insurance can help your business mitigate risk and increase competitiveness, check out our FREE E-Book “A Guide to Export Credit Insurance”.
