The Rise of DemeTech Threatens to Stall Without Ex-Im Bank
DemeTech Corp. - Miami, Florida
In 2000, Luis Arguello purchased a small surgical sutures and blades distributor in Miami, Florida. The company, DemeTech Corp., was doing less than $100,000 in annual revenues – all of it coming from domestic customers. Where one businessperson might see a sleepy company with limited upside, Arguello had visions of a world-class manufacturer with global reach.
Today, DemeTech has 75 employees, and a stunning 90% of its sales, or more than $10 million, come from exports to 100 countries around the world. Arguello, the chairman and CEO, is looking to add to that tally. In September, he will travel to Singapore and Malaysia as part of a U.S. Department of Commerce trade mission to plot his company’s entry into the Pacific Rim market. DemeTech’s remarkable growth could never have happened without the support of the U.S. Export-Import Bank (Ex-Im), which insures 60% of the company’s exports.
Without congressional reauthorization the Ex-Im charter will lapse, a possibility Arguello doesn’t want to think about.
“It would be a very dark day for DemeTech,” he says, further explaining the impact of the Bank’s closing with words including “emergency mode” and “desperation.”
He goes on to say, “Without an insurance policy from Ex-Im, we couldn’t get a line of credit from our bank. The financial crisis left banks with little appetite to extend loans for domestic business, much less international. If you’re a small company, you can’t compete internationally without Ex-Im insurance.”
Arguello, the son of Nicaraguan immigrants, cites the example of a Mexican client that requested a $1 million line of credit from DemeTech. Without continued Ex-Im backing, DemeTech would have to rescind the credit line and demand payment upfront, in which case, “our customer would tell me to go fly a kite,” Arguello says.
That Mexican client purchased $3 million worth of sutures and blades from DemeTech this year.
DemeTech’s remarkable success in the international market has earned distinctions from the federal government and the Nicaraguan American Chamber of Commerce, among other entities. Arguello also wears the hat of an international trade advocate.
He testified before Congress in support of free trade agreements at the request of Rep.Ileana Ros-Lehtinen and participated in the White House signing ceremony for those trade pacts. More recently, he has turned his attention to Ex-Im Bank reauthorization, writing letters to both of Florida’s senators and pushing for an opportunity to address members of Congress on the issue. He expends time and energy on the issue, he says, because nothing less than the future of his business and the jobs of his 75 employees are at stake.