Zeigler Bros. Inc. designs and sells aquaculture feed to over 50 countries worldwide from facilities in Gardners, Pennsylvania. Specifically, Zeigler delivers cutting edge products for the shrimp industry to Asian and Latin American countries like Nicaragua, India, Indonesia and Brazil and catfish feed to African countries like Nigeria. Aquaculture is a booming business worldwide, and Zeigler helps increase the food supply in developing countries that need it the most.
Zeigler has been a tremendous success internationally. “Export sales have tripled over the past several years,” says Kim Crooks, Finance Director. “By 2013, they totaled over $14.0 million and accounted for over 50% of our total company sales.” With this international expansion came a swell of jobs. Zeigler now employs 65 people full time, and an additional 10-15 temporary workers given the time of year. What is one key ingredient behind Zeigler’s export success? The Export Import Bank.
“There are two problems Ex-Im solves,” says Crooks. “The first is working capital.” When you export from Pennsylvania to Nigeria, payment cycles can often take 60 to 90 days. This means Zeigler needs money to finance those sales, but private banks will not loan against overseas sales like they will domestic. “We wouldn’t be able to get bank support without Ex-Im,” explains Crooks. Once Zeigler bought Ex-Im credit insurance for its foreign invoices, it obtained the working capital it needed to grow.
Ex-Im solved a second problem for Zeigler that is rarely given thought. Small American businesses often have trouble collecting payment from companies in developing countries. “If I tell a firm that I’m going to report it to the U.S. government, it gets serious about payment,” says Crooks. “The U.S. Bank name gives us clout when collecting.” This is one reason why Ex-Im backed loans have such a low default rate, less than a quarter of one percent in 2013.
Despite this low default rate, Ex-Im may cease operations. Its charter expires on September 30th, and some in Congress oppose the bank on ideological grounds. Crooks encourages Congress to be practical on this issue, “Private sector banks will not back loans to Nigeria and other developing countries. Ex-Im backs $10 million worth of our exports. The other $4 million is prepaid, but many of our customers will not be willing to do that.” Foreign customers simply expect Ex-Im enabled credit terms.
Zeigler has won awards for its exporting prowess, most notably the 2013 “Exporter of the Year” award from the Small Business Association and the President’s own E Award. Crooks believes Ex-Im played a crucial role in his company’s success and hopes Congress will hear his message, “Ex-Im is critical to our industry and business. If we lost Ex-Im, it would negatively impact our sales and, subsequently, our employment.”
