When it comes to surviving disaster, Californians have a wealth of experience. Tefcen Corp., a small Santa Barbara company, has turned that knowledge into cold, hard cash by finding overseas markets for its Emergi-Pak, an emergency kit containing food rations, drinking water and a blanket.
Gene Ekonomi, founder of the export management company, began talks with the Japanese after the 1995 Kobe earthquake. But sales didn't take off until after the company participated in a California state exhibit at the 1996 Leisure and Recreation trade show in Tokyo.
It hasn't all been smooth sailing. The Japanese government has put the California firm through the regulative wringer--including detailed questions about the vitamin and mineral content of the foodstuffs. One shipment wasn't allowed into the country because government authorities found a small trace of a chemical that is illegal in Japan.
But after modifying its product to meet Japanese requirements, Tefcen sold $200,000 worth of its Emergi-Pak. Japan now accounts for 75% of the disaster pack's sales, partially due to that country's boom in camping and other outdoor activities.
Ekonomi is also hopeful that Japan will become a good market for American medical devices. But he said putting a product through the clinical tests required by the government can cost $300,000 to $400,000, a huge deterrent for some of the smaller companies he represents.
Other good markets for U.S. medical supplies are Singapore and Malaysia, where a growing middle class is demanding more sophisticated medical treatment.
Companies capitalizing on California expertise, such as disaster preparedness, have helped propel this state into the forefront of America's export boom. Another niche is environmental cleanup--which accounted for $14.5 billion in U.S. exports in 1995, up from $9.7 billion in 1993.
Spurred by Vice President Al Gore's keen interest in the green movement, the Clinton administration has taken an aggressive approach to pushing environmental exports through technical assistance, financing and export promotion.
This year, Zond Systems Inc., a Tehachapi-based wind turbine manufacturer, landed a contract to sell $12.5 million of wind energy equipment and services to a trading firm in energy-starved China. The company faced tough competition from a Danish firm offering attractive government-backed financing. But Zond went to the U.S. Export-Import Bank, a government financing agency, which agreed to "level the playing field" by providing three low-interest loans for the Chinese company.
Financing remains a big hurdle for U.S. traders. But the California Export Finance Office and the U.S. Export-Import Bank have teamed up to expand the pool of available capital. CEFO was formed in 1984 to help trade novices by providing loan guarantees and other financing. Since that time, the agency has supported $1.4 billion in export sales and $250.9 million in bank guarantees.
In the past, CEFO could issue a loan guarantee of only $750,000 per customer. Through the Ex-Im Bank pilot program, the California agency can now provide a guarantee of up to $1.5 million.
Evelyn Iritani can be reached via e-mail at firstname.lastname@example.org or by fax at (213) 237-7837.
Thursday: Health Care