17 annual FCIB Global Conference: a rousing success.(CREDIT COLUMN)

Building on past successes, the 17th annual FCIB Global Conference held at the Biltmore Hotel in Coral Cables, Florida in November was another great event. The approximately 200 attendees got to hear from and speak to experts on an array of issues of importance to those engaged in the field of international business credit. Also, as with all FCIB conferences, attendees had ample opportunity during various coffee breaks, meals and receptions to network with business colleagues and make new and lasting business and personal friendships.

Stephen Leach, who is Managing Director and Emerging Markets Economist for Citigroup, presented the keynote speech. He gave an economic overview of as well as projections for the U.S. and global economy in 2007. Commenting on the global economy's resilience in the face of rising world oil prices, Leach said, "Here we are in probably the strongest GDP global growth in decades and that's with the sharp increases in oil prices."

Two concurrent sessions followed Leach. Paul Beretz, CICE, of Pacific Business Solutions, presented "Fundamentals of Export Credit Management." Beretz said the keys to success are the three "Cs" of international business credit: Country, Currency and Culture. A key point on culture, he advised, is to be observant to learn the major points and nuances of how business is conducted in other countries and how people relate to each other. Understanding this is essential to conducting business successfully.

Jack Cloonan, President of Clayton Consultants, held the other concurrent session entitled, "Risky Business: Coping with Hostile Credit Management Situations Abroad." Cloonan, a former FBI agent, has done extensive work helping companies prepare for the possible kidnapping of one or more employees while on business overseas. His firm has been involved in a number of kidnapping negotiations. Kidnappings are usually conducted to make money. He noted that calm, methodical negotiations, understanding the kidnappers' culture and knowing how to speak their language are important skills to have in order to get victims out alive. Forceful tactics seldom work. "We've had our eighth case in Iraq and they all got out alive." Cloonan recommended that companies obtain insurance that covers kidnapping situations. This insurance can help pay ransoms as well as third party firms such as his that have the experience and knowledge to get the victims released unharmed. Although kidnappings can occur in any country he noted the kidnapping hotspots of the world are Latin America, the Middle East, parts of Africa and some eastern European countries such as Romania and Bulgaria. However, "kidnappings are on the rise in China and India," he said, noting the 4,000 in China in 2005. (Look for further coverage on this topic in a future Business Credit issue.)

After a networking luncheon, the next session conducted was entitled "Analyzing Latin American Financial Statements--Evaluations and Interpretation." Moderated by the experienced international credit manager David Marsh of Novus International Inc., the panel of experts also included David Gardner of Wells Fargo HSBC Trade Bank and Pablo Siade of Euler ACI Servicios. When analyzing the financial status of existing or potential customers in Latin America, Marsh said, "One thing you have to remember in Latin America is the equity market is very limited. There are not a lot of companies using it to raise capital. I don't get excited if total debt is more than twice the net worth. Heavier debt in Latin America is to be expected." On reading financial statements Marsh advised that it is best to analyze them at your customer's premises so that you are in a better position to learn about them. "Read the footnotes carefully and ask questions," Marsh said. "You can't do that from your desk." He also cautioned to look in the financial statements for advances to the owners. "You don't want to find out that the owners took out advances they'll never pay. That drains the company."

"Russell D'Souza, with Hallmark International, Inc. and FCIB Chairman, moderated the session "Understanding the Sharia'a: Islamic Financing in Theory and Practice." Joining him were Patrick Connelly, CCE, FICM, CGBP, Entelyx International, Inc., Andrew Metcalf, King & Spalding LLP and Derek Weist, Arab Banking ...