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Export Insurance Replaces Letters of Credit and Expands New York Company
Mon, 2012-04-16 14:45

Exporter: O-AT-KA Milk Products Cooperative, Inc – Batavia, New York
Destination: Mexico
Results: Exports Have Grown from 1% to 10% of Total Sales

O-AT-KA, a company name taken from the Seneca Indians, makes a wide variety of dairy and non-dairy based products. In 1959, O-AT-KA received its first tanker of raw milk as it began operations with five employees. The company has now grown to 300 employees and produces and markets a wide variety of value-added dairy products that are distributed globally by Fortune 500 companies.

In 2010, the financial group of O-AT-KA needed extended credit terms and nonpayment protection for a large customer in Mexico FEMSA Cerveza. FEMSA owns and operates about 7,492 convenient stores and in 2009 was the largest distributor of Coca-Cola products in Mexico. Meanwhile, the company wanted to increase sales by extending terms to international buyers. Ex-Im Bank's single-buyer credit insurance resolved these issues. No fee counsel and full application processing was provided by Trade Credit Insurance Agency, LLC.

The buyer received 61 to 90 day terms while O-AT-KA obtained nonpayment protection and was able avoid expensive and time-consuming letters of credit. Exports increased from 1% of total sales to 10% and company's operations became more resource efficient with no cash required upfront to buy inventory and exports contribution to overhead costs.

"The insurance policy has given us the confidence to ask for more orders and grow sales," stated Jerry Gefert, Controller.