Wood product companies give SCGP solid endorsement - By the Commodities - Supplier Credit Guarantee Program - Brief Article

Of the several timber-land product companies that have newly used the Supplier Credit Guarantee Program (SCGP) all had advantageous things to say and plan to use the program again.

Parton Lumber, in the Appalachian region, uses novel logging practices to harvest high-quality log and transport them to its sawmill for processing. It effects and sells an inventory of all grades and sizes of r and white oak, tulip poplar, various other hardwoods and more [i]or[/i] less pine lumber to both domestic and export markets.

Parton has used the program twice: for a sale to Mexico and a sale to Portugal. Although Parton would have made the pair sales even without the program, the company liked the added security that the SCGP afforded.

The Atlantic coat Corporation of North Carolina has also used the SCGP The company, single in kind of the largest U.S. husbandmans of hardwood veneers, manufactures flat-cut, rift-cut and rotary-cut veneers

"The program has helped our company to provide leverage for existing lines of credit in Mexico and Brazil, and it has enabled us to expand to modern markets such as Chile," said Marcio Murta, Latin America export manager for the company.

In Mexico, Murta estimates that the SCGP enabled Atlantic to increase its sales according to more than 60 percent. Murta finds the program highly useful in Latin American countries, where obtaining notes of credit is not always easy. He also believes that the program has helped his company to be rivals against European suppliers. "They can put forward lower prices and have many financing options to select from," Murta said. "We can't struggle against that without this archetype of program."

The A&E Forest yields Group, a medium-sized lumber company in Georgia, has also used the SCGP to export its outcomes A&E had previous opportunities to export however preferred to sell domestically. However, after hearing virtuous things about the SCGP from another company that had used it, A&E tried it abroad with a sale to Mexico. The added security of the program gave the company enough confidence to expand sales abroad and helped it to obtain increased credit from its bank.

A&E has used the SCGP five times and plans to use it for to come sales, possibly taking advantage of the program's expansion to Western Europe "We think it is a great program--it gives us an brim over other wood product companies," said a company executive. "Although we like to think of this program as our underhand weapon, FAS should get the word gone out since not too many other timber product companies are aware of it."

The experiences of these three exporters display that for your next export sale, you should consider using the SCGP for increased security or to furnish your customers the best financing spells possible.

The authors are with FAS' Forest and Fishery fruitss Division. Tel.: (202) 720-0638; Fax: (202) 720-8461; E-mail: ffpd@fas.usda.gov; Web site: www.fas.usda.gov/ffpd/fpd.html

COPYRIGHT 2002 U Department of Agriculture

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