The Chemical Credit Industry at the Forefront of Growing Trend in Globalization

ABC-Amega Inc., headquartered in Buffalo, New York, is a respected global commercial receivable management firm and industry credit group managing firm. With its involvement in international credit since 1960, ABC-Amega is stepping forward as a key player in facilitating a ground-breaking trend spearheaded by the chemical credit industry.

As globalization continues to dominate discussion in all economic sectors, the chemicals manufacturing industry is positioned as the vanguard of the trend to share information across international borders. Their bold strategy for succeeding globally involves sharing commercial accounts receivable information and benchmarking data with competitors and presenting educational programs or mentoring overseas when the opportunities arise.

In December 2005, Chinese government industry associations in Shanghai together with FCIB-China, (an organization formed by agreement with ABC-Amega) hosted the Second China International Credit & Risk Management Conference. Celanese Corporation Credit Director, Tim Thomann, presented a case study on Global Credit Management in the Chemical Industry.

The study illustrated the global mission of managing credit as a component of financial shared service centers. Thomann explained that “the main objective of the credit function is to support the sales and marketing efforts of the company while simultaneously minimizing customer delinquency, risk and bad debts.”

Benchmarking has an integral position in this function. Credit industry groups carry this forward by interacting with competing organizations through involvement in groups such as the Credit Research Foundation and the National Chemical Credit Association for education, networking and the exchange of customer information.

The National Chemical Credit Association, which has existed since 1938 to facilitate the exchange of commercial credit information and provide education to members, has taken the lead in promoting a forum for the global chemical credit community. The Chinese Government is especially active in support of dialogue and exchange that promote education in western style credit management.

As credit group manager for the NCCA, ABC-Amega has participated in and facilitated a number of forums helping to set the industry on the fast-track of this important trend in globalization.

In May 2004, The NCCA Executive Board hosted a meeting for a delegation from the Peoples Republic of China for the purpose of sharing the concept of business credit systems, including industry specific credit groups, utilized by U.S. Chemical Companies.

In March of 2005, Mr. Chen Hao-Ran, Executive Director and Chairman of China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (CCCMC), provided a teleconference presentation on the status and trends of the Chinese Chemical Industry to attendees of the NCCA Educational Conference. Mr. Chen acknowledged that ongoing reforms within the Chinese banking industry will accelerate the pace of market entry for Chinese chemical companies. He feels that the establishment of a Chinese chemical credit association, operating similarly to the NCCA, is an important component of progress.

In February 2006, chemical credit industry representatives from Europe, China and other parts of Asia will participate in the 55th Annual NCCA Educational Conference in Tucson, AZ. William Bastiaan, former Chairman of FCIB-Global, will facilitate an interactive benchmarking session. Mr. Chen and a delegation from CCCMC will provide an update to trends within the Chinese chemical industry along with an update of the progress of banking reform. Dr. Hans Belcsak, President-S J Rundt & Associates, will lead the discussion of international accounts.

The explosion of China as not only a major producer, but also the largest growth market for chemicals, has credit managers from around the globe scrambling to learn how to manage sales in emerging markets. Credit professionals from U.S. chemical companies see an opportunity to participate in the evolution of the Chinese credit system, elevating the level of global standards and practices.

As the Chinese economy continues to progress toward a market-driven system, credit is recognized as the crucial function. Naturally, the training of managers in the discipline of credit continues to be a high priority. Chemical manufacturing in China, being a relatively mature industry comprised of a small number of large companies, is well poised to explore the benefits of this exchange.

The European chemical industry also supports a professional credit association, The European Chemical Credit Association. The ECCA has established an effective network connecting credit professionals from all of Europe. While not interchanging commercial receivable data at this point, the ECCA is considering an initial foray into a comprehensive benchmarking project ? the first of its kind.

Other parts of Asia are beginning to become part of this growing trend. David Herer, CEO of ABC-Amega, service provider to the NCCA, has recently met with leading chemical industry representatives in Japan, inviting them to explore relationships with existing credit industry groups. “As globalization’s impact expands, competition between Japanese companies and foreign countries will intensify. To compete successfully, Japanese companies must gain access to information and education provided to credit professionals through associations like the NCCA.”