World Trade - July 2008 - (Page 25)

These companies can face constraints on working capital as foreign accounts receivables balloon and, if they source globally, they can also see their inventoryon-hand increase. Accessing capital can be a challenge for newly established companies in an emerging industry. Depending on the life cycle of the company, there are various alternatives for funding and financing. Early-stage companies may work with investors or venture capital (VC) firms, while companies with more mature balance sheets may borrow from asset based lenders and banks, sometimes with the support of the U.S. Government. Many U.S. banks partner with the ExportImport Bank (Ex-Im Bank), the official export credit agency of the United States, to expand their clients’ overseas trade. Ex-Im Bank’s mission is to increase U.S. jobs by assisting in financing the export of U.S. goods and services to international markets by providing working capital guarantees (pre-export financing), export credit insurance, loan guarantees and direct loans (buyer financing) to both large and small companies. United Solar Ovonic Laminates the Globe In 2008, United Solar Ovonic LLC of Auburn Hills, Michigan, and a wholly owned subsidiary of Energy Conversion Devices, used a $25 million revolving credit line to support the export of its thin-film solar laminates to European and Asian customers. The line was issued by JPMorgan Chase and guaranteed under Ex-Im Bank’s “Fast Track” Working Capital Guarantee and Environmental Exports programs. United Solar needed to monetize its export related receivables and generate working capital in order to sustain aggressive export growth targets and to transform its R&D facility into a manufacturing entity. “Our ability to access a line of credit this size based on export-eligible receivables and inventory is tremendously helpful. The reduced amount of time involved enables us to move quickly to expand our export sales,” said Sanjeev Kumar, VP and CFO of Energy Conversion Devices Inc. As companies such as United Solar expand internationally and widen their supply chains, creative working capital solutions afforded by the Ex-Im Bank are beneficial and often necessary to compete in the global marketplace. Technical Consumer Products Lights the Way Another green company, Technical Consumer Products (TCP), the largest U.S. distributor of energy-efficient light bulbs, has capitalized on the global green movement by successfully promoting its environmentally friendly bulbs through a big-box retailer. In order to remain viable in this highly competitive industry, TCP, just like many other U.S. companies, elected to manufacture its products in China; however, the company’s extended supply chain created a disparity in payables and receivables, thereby causing a significant demand on its working capital. To address its liquidity constraints, TCP turned to JPMorgan Chase to create a supply chain financing solution leveraging the bank’s credit relationship with the big-box retailer. JPMorgan Chase discounted TCP’s open account receivables once the invoice was approved by the retailer, thereby decreasing the company’s financing costs and maximizing its cash flow. As the green movement gets worldwide traction and we see the impact of the federal legislation banning the sale of incandescent light bulbs in 2012, companies like Technical Consumer Products will continue to flourish if they have the right trade tools in place to support their supply chains. Green Supply Chains Deliver Results Companies of all sizes and industries around the world are becoming more aware of their impact on the environment. Besides developing greener products, they are also more focused internally on cutting costs within their supply chains, operating with greater energy efficiency and reducing their “carbon footprint.” Furthermore, while the challenges to be environmentally friendly and to market products into this emerging industry can be great, they are outweighed by the yet greater benefit to sustain the planet’s finite resources and companies’ long term viability. Lori R. Helmers, executive director, Global Trade Services at JPMorgan Chase is a regional manager for the bank’s Middle Market and Small Business Global Trade Sales teams, assisting smalland medium-sized companies with their trade finance and logistics needs. Lori joined JPMorgan Chase in 1999, and during her career with the bank has worked in various international banking capacities, including foreign exchange, global treasury and structured trade finance. She is a graduate of the University of Texas at Austin and received her MBA in International Finance from Loyola University Chicago. Lori is a member of the World Trade Supervisory Board of the Greater Houston Partnership, the Camino Real District Export Council and sits on the Advisory Board of the Austin Community College International Business Institute. 1 JPMC Carbon Principles and Report on Corporate Responsibility 2 Edward Iwata, USA Today, May 20, 2008 edition 3 REI 2007 Stewardship Report, www.rei. com/aboutrei/csr/2007/waste_recycle07. html 4 Sustainable Brands Weekly, January 10, 2008 edition http://www.rei.com/aboutrei/csr/2007/waste_recycle07.html http://www.rei.com/aboutrei/csr/2007/waste_recycle07.html http://www.rei.com/aboutrei/csr/2007/waste_recycle07.html

Table of Contents Feed for the Digital Edition of World Trade - July 2008

World Trade - July 2008 Contents Inside World Trade Logistics Service Provider Report Card 3rd Annnual Buyer's Guide to Logistics Suppliers and Services Supply Chain Partners Letter From the Publisher

World Trade - July 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.