Small Florida Business ‘Makes Hay’ of Ex-Im Bank’s Insurance Offerings
Southeast Hay Distributors - West Palm Beach, Florida
The idea for Southeast Hay Distributors struck Alex Christensen on a flight home to the United States from Amsterdam, where he had just delivered a pair of horses. Christensen, who at the time was working construction and managing a family friend’s horse farm in Florida, gave some thought to the wide discrepancies in hay prices and saw an opportunity to compete in the market.
Launched in 2008, Southeast Hay Distributors sent its first overseas shipment to Venezuela, followed by shipments destined for the Puerto Rico zoo and police department. Today, the Middle East is the company’s primary export market for hay, feed, and wood shavings used for equine bedding. Southeast Hay Distributors has a presence Singapore and is eyeing the Far East for further growth. The company’s meteoric rise could never have been possible without a U.S. Export-Import Bank insurance policy on the company’s foreign accounts receivables,
“I didn’t have the working capital to drop on a private insurance policy,” Christensen says. “I don’t know what I would do without Ex-Im.”
Christensen tapped Ex-Im as a financial backstop beginning in 2010, and, not coincidentally, his business has taken off since then. Annual sales went from $770,000 in 2010 to nearly $2 million in 2013 to a projected $3 million in 2014. In 2013, exports accounted for 29% of Southeast Hay Distributors’ total sales; in 2014, that figure is expected to grow to nearly 40%.
With growth has come new jobs. The number of full-time Southeast Hay Distributors employees has grown from two in 2010 to seven currently, not including seasonal and part-time help. Exports have enabled Southeast Hay Distributors to maintain its payroll over the traditionally slow summer months in the United States.
“Most of our growth is a result of Ex-Im,” Christensen says. “Having an Ex-Im policy gives me confidence that I can give my dealers good terms.” Another benefit, Christensen adds, is Ex-Im’s vetting of Southeast Hay Distributors’ customers for creditworthiness.
Closure of Ex-Im, which would occur if Congress fails to reauthorize it, would stop Southeast Hay Distributors’ growth spurt dead in its tracks. The uncertainty alone surrounding Ex-Im’s future is already having an impact. “I’m hesitant to enter into new contracts overseas in the event that the Ex-Im charter is not renewed,” Christensen says.
Christensen’s concern extends to his suppliers, most of which are located in small, rural communities in which they are employers of significance. He mentions a southern Georgia town home to a wood shavings supplier. The town’s unemployment rate in 2000 was 11.2%; in 2010, it was just 2.7%, according to Christensen. “I have to believe that our business helped revitalize that community economically, and I hate to think about what would happen if Ex-Im went away.”