EXPORTING BY COUNTY COMPANIES
Trying to gauge the impact of international trade on Orange County is difficult, specialists say, and figuring out how many products made by county firms are going overseas is just as tough.
So here’s a sampling of what some Orange County firms have done in exports this year and plan to do next year:
Western Digital Corp.
The Irvine-based company has long been one of Orange County’s leading exporters. During the past 12 months, the firm has picked up 50% to 52% of its revenue from export sales, said Gregory Peel, vice president for international operations. Western Digital is one of the county’s larger computer products manufacturers, with $768.3 million in revenue for the fiscal year ended June 30.
The company ships its computer products throughout the world and this year started shipping to China. It also is trying to obtain an export license to ship to Bulgaria, a Soviet Bloc country where high-tech companies can send equipment based only on older technology, Peel said. The license has been on file with U.S. Commerce Department officials since July, and Peel said he hopes it will be approved soon.
“It’s a way to get into the Soviet Union, but we’re also talking directly to Soviet agencies about selling products there,” he said.
AST Research Inc.
Irvine-based AST found this year that its foreign sales, mainly in Europe, expanded faster than its domestic sales, said Dennis Leibel, the company’s treasurer. Sales in Europe accounted for about 25% of its revenue last year and about 33% this year. Leibel said foreign sales are expected to increase next year to 35% to 38% of total revenue and to 40% in 2 years. The company’s revenue has been running at $400 million to $500 million a year.
“All this growth has come within the last few years,” he said. “In the Far East, we see significant growth in the next few years.”
AST, which is also filling orders in China and wants to sell in Soviet Bloc countries, expects to set up assembly plants and manufacturing operations in Europe by 1992, Leibel said. It already has an assembly operation in England. The company makes computer enhancement products and complete computer systems.
Life Cycle Inc.
Life Cycle in Irvine exports its stationary exercise bicycle and rowing machines to about 30 countries, where sales account for about 15% of the firm’s $50 million in annual revenue, said George Otott, director of marketing. But exercise equipment is the kind of discretionary product that foreigners could do without if the dollar rises in value against foreign currencies and makes the machines too expensive for overseas consumers.
“We expect our exports to grow in 1989 as long as the dollar doesn’t jump up,” Otott said. “The lower dollar has been the big thing that made all this possible.”
The company, which is owned by Bally Manufacturing in Chicago, has a unit in Europe that assembles the equipment for sales there.
Carl Karcher Enterprises
The Anaheim-based company hadn’t thought about expanding overseas until a restaurant chain in Osaka, Japan, came up with a licensing plan for a Carl’s Jr. store there, said Steven Kishi, director of international development for Karcher. Now, Karcher has come up with a 15-year plan to ring the Pacific Rim with fast-food establishments, Kishi said.
“Our first restaurant is in architectural design now, but we plan to expand in Japan to a good 200-plus restaurants in the next 10 to 15 years. We expect to have 50 stores there by mid-1994,” he said. “And we’re actively pursuing business in Southeast Asia, Australia and western Canada. The Pacific Rim is our growth area over the next 10 to 15 years.”
Karcher has about 400 stores in California and 100 stores in southern Oregon. To complete the cycle around the Rim, Kishi said, the company also plans to expand into northern Oregon and Washington.
Micro Motors Inc.
Micro Motors is a tiny Santa Ana manufacturer of miniature air motors for dental use. With only $3 million to $6 million in annual sales, the company decided last year to invade foreign turf. Sales overseas last year accounted for less than 1% of the firm’s revenue but grew to nearly 6% this year, said James Kiehl, the firm’s marketing manager.
“Last year at this time, it was all telephone work to set up sales this year,” he said. “We were in international trade 6 years ago but got out of it 4 years ago because of the dollar then.”
Now, he said, the private firm realizes that the industry is finite and the turf battle with six major competitors is worldwide. The company is building a base of demand that it hopes will withstand any future fluctuations of the dollar’s value. “We want to be a longtime player,” Kiehl said.
