Factoring helps German steel exports.
When Mr Manfred Reiner Röhren started his business 20 years ago, he was confident that his professional education in international trade and his business experience would ensure success. His knowledge of the steel industry, in particular steel tubing, and his excellent business connections helped him to quickly become established.
During the first 10 years he acted as an intermediary between the steel producers and the various buyers. This was an excellent way to start as there was no need to hold stocks of the products. However, as the business developed he needed to establish his own warehousing facilities. In 1986 he purchased some land near Nürnberg, Germany and built his own warehouse and head office facilities. The company, Manfred Reiner Röhren - und Stahlhandel GmbH., has been there ever since.
The company specialises in the trade of hot rolled seamless steel tubes which make up about 90-95% of the company's turnover. Other steel products make up the balance.
The company was one of the first to develop close links with the producers in Eastern Europe, where prices are competitive but standards are still high enough to meet German Industrial Norms (DIN) requirements. Today, the company is a specialist importer and proudly holds a number of exclusive distribution agreements, especially with producers in the Ukraine. The customers are now mainly made up of large distributors that are able to purchase in bulk. Close cooperation with the forwarding companies combined with warehousing facilities in Bochum, ensures customers needs are met promptly.
The customer base is reasonably well diversified and 60% of the sales are exported to Western Europe. Further expansion in sales overseas is confidently being predicted.
In order to keep down their own administration costs and to fund the continued expansion of the business, Reiner took up a full factoring package from Deutsche Factoring Bank. This provided a collection service and credit protection for the bulk of his exports. The export business handled by the factor increased from under 5 million DEM in 1995 to in excess of 10 million DEM by 1998 with further expansion being forecast.
"Export factoring has certainly helped us to expand our international business and will become even more important when we supply to the more distant markets", says the exporter. "The credit risk protection facility combined with a steady flow of funding allows us to offer payment terms of between 30 and 90 days as requested by our customers. The use of the two factor system facilitated by FCI, has meant that we have been able to obtain professional credit assessment and collection services in a number of different countries. The level of knowledge and expertise of our Export Factors' staff makes our cooperation with them very satisfying and pleasant."
The Export Factor adds, "Working with such an efficient and expanding exporter is also very satisfying not only for us, but also for the various Import Factors that work on behalf of the exporter."