Export Credit Insurance Fuels Year‑on‑Year Business Doubling of Guanyu International Trade
— Pang Bin, General Manager of Ningbo Guanyu International Trade Co., Ltd.
Distinguished leaders and dear friends:
Good afternoon!
Ningbo Guanyu International Trade Co., Ltd. is a pure trading enterprise located on the 21st Floor, Building 11, Xintiandi, Century Avenue. We have more than 50 employees and three overseas offices. Founded at the end of 2002, the company is mainly engaged in the export of pharmaceutical chemicals and food chemicals, with key markets in Central‑Eastern Europe and South America.
In the early days, it was just my wife and me working from home, with annual sales of around USD 400,000. In 2004, we took out export credit insurance. Supported by China Export & Credit Insurance Corporation (Sinosure), our sales doubled each year from 2004 to 2009, reaching USD 10.56 million in 2009. Our sales hit USD 2.6 million in the first three months of this year.
Looking back on our growth, I am deeply moved. Without Sinosure and Bank of Ningbo, Guanyu International Trade would still be just a two‑person home‑based SOHO business. On behalf of Guanyu International Trade, I would like to express my sincere gratitude to you. Thank you, Sinosure, and thank you, Bank of Ningbo.
Over the past five years, we have progressed from knowing nothing about export credit insurance to understanding it and now applying it proficiently. The value of this policy‑driven tool has been fully demonstrated in our company. I would like to summarize several tangible benefits we have gained over five years under export credit insurance coverage:
1. Secure receipt of export proceeds. Since we took out the insurance in 2004, we have filed more than 40 claims with a total reported loss of over USD 2 million. Most of these cases occurred after the global financial crisis. Our major market South America was severely hit by the crisis. Buyers suffered capital shortages and operational difficulties. Meanwhile, local currencies in South America depreciated sharply, leading to numerous payment defaults. Without Sinosure as our back‑up, we would have been placed in grave jeopardy. Uncollected receivables would have kept us up at night, while new orders would also fill us with anxiety. During this difficult period, Sinosure gave us tremendous support. Instead of scaling back business amid rising overseas risks, they strengthened their support and raised credit limits for our overseas buyers. Their efficient claim‑settlement service also boosted our confidence. Our cases were well‑handled, either through indemnity payment or debt recovery assisted by Sinosure. To date, we have received nearly USD 300,000 in total indemnity from Sinosure, of which almost USD 200,000 was paid in 2009. Despite certain losses, our business has maintained sound overall development.
2. Enhanced market competitiveness. Trading companies always source goods from manufacturers, so our purchase prices are inevitably higher than those of factories. Protected by export credit insurance, our sales representatives dare to adopt deferred‑payment terms such as D/A or O/A for 60‑150‑day credit sales to explore markets and expand business volume. In fact, credit sales have become common practice in our industry. While competing on product quality, pricing and service, we also use flexible payment terms as an important competitive edge.
3. Alleviated working‑capital pressure. Domestic manufacturers of pharmaceutical and food chemicals are large in scale but limited in number, leaving us few alternative suppliers. Accordingly, factories hold strong bargaining power and generally require advance payment before shipment. Meanwhile, many of our export transactions are conducted on credit terms, creating a capital mismatch between incoming and outgoing payments. With Sinosure‑backed insurance policies, we can obtain bank financing after shipment, revitalizing cash flow and effectively resolving the conflict between rapid business expansion and capital shortage.
4. Targeted customer development and maintenance. Overseas clients are the foundation for a trading company’s survival. According to our rough statistics, Sinosure has conducted credit investigations on hundreds of overseas customers for us over the years and provided professional risk advice. Referring to buyer credit limits approved by Sinosure, our sales teams carry out targeted customer development and account management. We arrange regular visits and prioritize relationship‑building for high‑potential large‑size buyers with good payment records. Less energy is invested in clients with average credit and limited growth potential. For parties with poor credit standing, especially those on Sinosure’s Watch‑list, we proactively discontinue cooperation. After years of practice, export credit insurance has become an indispensable tool for our business development.
5. Improved internal management. As our company expanded and headcount grew, higher requirements were placed on internal governance. Through in‑house exploration together with assistance from Sinosure, we have gradually built a risk‑management system centered on export credit insurance. For instance, leveraging Sinosure’s information resources, we established our own buyer profile database for classification and screening. We have laid down explicit internal rules: payments to domestic manufacturers can only be made after Sinosure grants credit approval for the relevant overseas buyer. We also stipulate that sales staff must press for payment once arrears occur; if overdue payments exceed a set threshold, Sinosure will be engaged to assist with debt collection.
As the financial crisis gradually recedes, Guanyu International Trade is embracing a new spring. We hope Sinosure Ningbo Branch and Bank of Ningbo will continue to support and care for our company. I would like to take this opportunity once again to extend our heartfelt thanks to Sinosure and Bank of Ningbo!
