Ex-Im Bank Could Mean the Difference of $2 Million in Sales for Fla. Distributor
Kings International Marketing Corp. – Miami, Florida
Alex Luk has witnessed a seismic shift in the export-import business. When he started Kings International Marketing Corp. in Miami in 1989, most of his business consisted of distributing imports to American consumers with big appetites for low-priced products from China and other low-cost countries.
However, as rising incomes around the world triggered growing consumerism, Luk’s business has shifted almost entirely (95%) to exports. Without the support of the U.S. Ex-Import Bank (Ex-Im), Luk wouldn’t be able to fully capitalize on this market swing.
Kings International Marketing’s 55,000 square foot warehouse is teeming with automotive products, including such recognizable brands as STP and ArmorAll, destined for overseas markets. The five-employee distributor recorded $3 million in export sales in 2013 and expects that figure to rise to between $5 million and $6 million this year, according to Luk. Its top markets are in the Caribbean (Jamaica, Trinidad, U.S. Virgin Islands) and Asia (China, Singapore, Japan, Malaysia, Indonesia, Vietnam). Luk, a Hong Kong native, attributes his company’s success to his mastery of multiple languages, his familiarity with Asia, and a vast network of friends and colleagues there.
It is China, though, that is the apple of Luk’s eye. A big new customer there started placing $150,000 orders this year, offering to pay $50,000 upfront and requesting a line of credit for the balance. Uncomfortable having to absorb such a high level of risk, Luk turned to the Ex-Im Bank to insure payment of the $100,000 balance.
Because most of Kings International Marketing customers pay upfront, the company has never had much need for Ex-Im until now. Having become a regular Ex-Im user, Luk is, like thousands of other small businesses, worried about the bank’s future. Without congressional reauthorization, Ex-Im’s charter will expire at the end of September.
“We have no chance of doubling our exports without Ex-Im insurance,”Luk says. “We’d be on target for $4 million in sales this year without Ex-Im instead of a projected $6 million.”