Charles T. Creech, Inc.
During the '80s, Tom Creech, owner of Lexington-based hay and straw supplier Charles T. Creech, Inc., took notice of a growing number of foreign buyers at central Kentucky horse sales, shopping for breeding stock to be transported back to their operations overseas. In the interest of his business, Creech followed the horse.
"I had to figure out where this horse I was feeding was going to be eating this year," Creech said.
Today, in addition to supplying the local Thoroughbred industry with its premium horse hay, Creech Inc. is a major supplier to Thoroughbred operations throughout Europe and the Middle East. Creech, Inc. supplies its hay products not only to Dubai, but all across the region, including to Oman, Abu Dhabi, Qatar and Bahrain.
"It's all about matching the right hay to the right customer," Creech said. "they want the quality and they want it on time, and that's what we do."
All hay is not the same, Creech said. Much of his company's success has come from custom-designing hay blends of the highest quality available to match clients' preferences and supplying those blends reliably, no matter what challenges the growing season brings in any particular part of the country. Creech has done so by developing a vast network of suppliers across the nation, so a poor crop in one area can be offset by the bounty of another.
Creech said it was an American trainer who initially opened the door for his export business to the Middle East during the 1990s, as Dubai was ramping up the caliber of its racing industry. Creech Inc., which was founded in 1981, was already exporting to farms in Europe at that time, as well as supplying hay for Sheikh Mohammed bin Rashid Al Maktoum's horses in central Kentucky.
Because of limited water supplies in the Middle East, almost all of their hay is imported, but there are plenty of global suppliers on the market to keep the business competitive, Creech said. So far, Creech Inc. has shied away from the mass-quantity, commodity-driven hay export business, where a low price often trumps a quality product. The company has opted instead to build long-term relationships with international customers who have made significant investments in their equine stock and prize quality.
Looking for a way to relate to the foreign market, Creech noticed that, in addition to fine horses, many of his foreign clients shared an appreciation for high-performance luxury cars. He compared his product to the high-octane fuel they routinely pumped into their gas tanks, asking them "Why would you buy all these horse at the (Keeneland) sale and bring them over and feed them junk?"
It has proved to be an effective argument for Creech, and his export business has been growing in recent years, despite the numerous challenges presented, especially in terms of shipping. Fuel prices are on the rise again, Creech said, and a slow economy means fewer shipping containers are arriving in American ports from Asia and other markets. That means more competition among American exporters for fewer shipping container options.
(The ratio of containers used for import to those used for export) used to be four to one, and that has now changed to something like one to one," Creech said. "To get bookings on boats and to get the right equipment for shipment is quite a challenge right now. And we virtually have no control over it."
Creech Inc.'s long-term investment in international sales has proven itself worthwhile from Creech's perspective, but exporters have to be prepared to manage a considerable amount of uncertainty in terms of freight costs, currency exchanges and growing global competition, Creech said.
"It's a whole lot cheaper to do business right here in Kentucky," Creech said. "It's getting very competitive out there, because (the economy) has been slow in America. But we offer a good product for a fair price, and that's how we've continued to repeat the business." -
Susan Baniak
W. Rogers Company
Dubai has the world's tallest building. What Dubai doesn't have, however, in its newly developed areas is a wastewater infrastructure. In other words - no sewer lines. For whatever differences lie between the United States' Southeast and the Middle East, both regions use water, we both waste water, and soon, they may both be sharing the expertise of one of the faces behind this million-dollar market.
That face is Warren Rogers, CEO of the W. Rogers Company, a Lexington-based general contracting firm engaged in the construction of municipal water and wastewater treatment plants. Founded by Rogers' father, William, in 1970, the W. Rogers Company will be celebrating its 40th anniversary next month. Over the years, the business has played a role in more than 300 water and wastewater projects, most of which have been located in Kentucky and Tennessee, although the company expects to be fully licensed in the entire Southeast within the next few months. Now Rogers is considering putting that experience to work by setting up a branch office halfway around the world in Dubai.
With no wastewater infrastructure, Dubai's waste water is currently being collected in large tanks - inside hotels, housing complexes and high-rise office buildings. At night, trucks haul it across town to the wastewater treatment plant.
"That's a pretty inefficient way of going about that task, so I've had an interest in trying to help them solve those problems in replacing those tanks with actual on-site treatment facilities," Rogers said.
Dubai, according to Rogers, is "an emerging country - chaotic and Wild West, evolving and highly leveraged. The laws are evolving and developing there, so it's a different business environment, but there is tremendous opportunity for people who have certain skill sets."
Rogers is not currently working on any projects in Dubai, but with 40 years of company experience, he can claim those "certain skill sets."
How does one set up shop in Dubai?
"You certainly need to observe the local customs." said Rogers. "Navigate how you set up a branch office, how you acquire a labor force, how you get materials in and out-everything you do to set up a branch office. It's hard enough in this country, but the market is there (in Dubai), and we've seen better times here. Everything moves very fast there. Be sure you have a good relationship with whoever you're working with."
He hasn't been all the way through the process, but he hasn't "failed yet," he said.
"When I fail, I'll let you know," he added with a smile. -
Aubrey Nibert
Hallway Feeds
As a 45-year-old, family-owned business based in Lexington, Hallway Feeds has grown from a commodity feed company serving central Kentucky's beef and cattle industry to an international supplier of innovative, custom-manufactured feeds for some of the world's most elite horses.
The company's first forays into international trade resulted from the fact that it is indeed a small world - especially for racehorses, according to Lee Hall, Hallway Feeds vice president.
The equine industry has developed as its own well-connected international community, with constant interaction between multiple operations across the globe. After building a reputation for their feed and nutritional products within the domestic Thoroughbred breeding and performance industries, Hallway Feeds began fielding requests from satisfied clients who wanted the same feed products for their horses abroad - first in England and Europe, and eventually the Middle East, Hall said. The company has been exporting their premium feed products to Dubai for roughly five years.
"It's all about relationships, reputation, flexibility and quality, and a long-term effort to build our brand and have it reach out beyond our local borders," said Lee Hall, vice president at Hallway Feeds.
Between 5 and 10 percent of Hallway Feed's gross manufacturing is dedicated to export sales, Hall said, but it is also one of the fastest growing segments of the company's business. While exports can balance lost or stagnant domestic sales, Hall said his business has benefited from a careful approach to international sales.
"We ship into about 15 countries around the world, and every country has different specifications," Hall said. "You've got to be patient and persistent."
The export business requires companies to balance multiple factors, ranging from foreign government regulations to often complicated freight and credit arrangements. It can be a challenge, Hall said, especially when a company is involved in a high-volume, low-margin business like his, and dealing with a perishable product such as animal feed to boot.
"You don't add assets to your business in terms of added labor or investments to take care of your exports," Hall advised. "It's very fluid, and you could have a change in currency or government that overnight could change your business. It's been our M.O. to try to do all this new export business with the resources we have in place."
Hallway Feeds contracts with a freight company to ship its products, which are loaded into containers in Lexington and typically transported by ocean freight out of Norfolk, Va.
Dubai is not the easiest place to do business, Hall said, but he considers his business fortunate to have been able to grow its sales there in recent years. He also expects his export business will continue to grow in the near future.
"As a whole, companies that have the opportunity need not be afraid of export," Hall said. "They just need to be conservative in how they approach it. Ö It takes some good fortune and some good advice, and some willingness to throw your hook into the water." -
Susan Baniak