From Olney to beyond

Olney, Texas, is a long way from Brazil and Argentina. The tiny rural community of some 3,236 people is in north-central Texas, 100 miles west of Fort Worth, 40 miles south of Wichita Falls and 200 miles east of Lubbock.

Photo: Air Tractor Inc.

“We have three traffic lights and a Dairy Queen here,” says David Ickert, CFO of employee-owned Air Tractor Inc. one of the state’s most unique exports. From the unlikely base of Olney, Air Tractor produces the world’s most extensive and popular line of agricultural-spray aircraft. The single or dual-seat aircraft are used in spraying, seeding, fertilizing, as well as firefighting.

Since 1972, Air Tractor has produced approximately 2,700 aircraft, priced up to $1.3 million. Driven by powerful Pratt & Whitney piston and turbine engines, the specialty planes — there are eight models now in production — have a capacity of up to 1,000 gallons of fertilizer or other chemicals. Air Tractor has 270 employees.

The company was started by Leland Snow, when he designed his first airplane, the S-1, in 1951. Snow’s S-1 flew dusting and spraying jobs in Texas’ Rio Grande Valley and in Nicaragua until 1957. He followed up the S-1 with models S-2A and S-2B, and moved production facilities to Olney in 1958.

Snow sold his original company and began designing the Air Tractor. Construction began in 1972 on the AT-300, which later became the AT-301. Air Tractor’s first turbine model, the AT-302, was introduced in 1977.

The company says its aircraft can be found over fields and forests across the United States and around the globe, including Canada, Mexico, Central and South America, South Africa, Australia, New Zealand, South Korea, Saudi Arabia, Spain and Eastern Europe. “It is a niche market,” says Ickert.

But at the same time, he notes, foreign countries are getting increasingly concerned about issues such as food security and safety, which is increasing demand for specialty aircraft such as Air Tractor.

Its latest sale – backed by the U.S. Export-Import Bank – is to Brazil. Ex-Im Bank authorized credit insurance to support the sale of nearly $900,000 worth of American-made crop-spraying aircraft to a biofuel and soybean grower in Brazil.

“We’re glad to see Air Tractor — a small business in Texas — winning this sale to Brazil, which is one of our nine key markets,” said Ex-Im Bank chairman and president Fred Hochberg. “This export transaction continues the long relationship we have had with Air Tractor that helped it dramatically grow its foreign sales while supporting American jobs.”

U.S. domestic banks don’t often support small and medium-sized American exporters, Ickert says. “It is not that the banks don’t want to,” he told Business without Borders from the Olney headquarters. “In many cases, the banks don’t know where to go for export support.”

Ickert is the past chairman of the Small Business Exporters Association of the United States, the international trade division of the National Small Business Association. The Washington-based NSBA is the nation’s oldest, non-profit advocacy organization for small business and has more than 65,000 member companies. He will become the NSBA’s First Vice Chair on Jan. 1, 2013.

Over the past 17 years, Air Tractor has used Ex-Im Bank’s medium-term insurance to export an estimated $70 million worth of its aircraft, primarily to small, private-sector buyers in Argentina and Brazil.

Ickert says the support of government-backed agencies such as Ex-Im Bank and the U.S. Small Business Administration are necessary for helping smaller firms find and develop foreign markets. “Export markets just don’t blossom overnight,” he says.

In a presentation to the White House Business Council in August, Ickert identified three major issues facing small and medium exporters:

1. There remains a vast, untapped potential of job creation in the area of small-business exporting, and more should be done from both the public and private sectors to stimulate exporting from small businesses;
2. More should be done by the Department of Commerce to identify specific international sales leads for small business;
3. The lending cap at the Ex-Im Bank should be raised.  (Congress ultimately agreed)

Ickert’s main point, however, was that exporters face “a host of barriers,” and more help, besides funding, is needed to build new foreign markets. “You have to have the patience to follow through on exporting,” he says.

“But if we can export from Olney, Texas, it can be done anywhere.”