Program Helps Firms Sell Abroad
Modulex Inc. has been making aluminum door and window frames for commercial buildings for 35 years, but until recently its business had been strictly domestic.
Today, the Compton-based manufacturer is bidding on a $300,000 hotel project in Uruguay that could increase its sales 10%, an Argentine distributor has expressed interest in selling Modulex’s product, and there is a possible deal in Chile as well.
“I’ve got my hands full,” Rod Gutierrez, the company’s president and owner, said. The difference between then and now? A training program offered by the Commerce Department to help small minority-owned businesses such as Modulex compete internationally.
The Market Entry Program, launched last year, prepares firms to sell their products and services abroad by providing training, consulting, mentoring and even participation in a trade mission.
Many colleges offer basic exporting courses, but this federal program isn’t over when the classwork ends. It’s then that a Commerce Department matchmaking program, one that’s available to all export-ready U.S. companies, comes to life.
“We can come back with research that defines the best five markets for your product and why,” said Kristin Houston, a Commerce Department official who oversees the program for the 12-state Western region. “Once the markets are defined, then we find buyers, distributors, agents or partners in those given countries at a very low cost and set up meetings for you with qualified buyers.”
Commerce Department officials in 78 countries offer this service and will even assist with accommodations and interpreters if requested, Houston said.
Before attending the first Market Entry Program in Los Angeles, which ended in October, Modulex’s Gutierrez knew little about exporting, let alone the export assistance services offered by various government agencies. “What I got out of it was exposure to different resources,” he said.
One of those agencies was the Los Angeles Chamber of Commerce, which invited Gutierrez to participate in its first trade mission: a six-day trip to Uruguay, Argentina and Chile. In each country, Gutierrez, a third-generation Mexican American, was introduced to six or seven prospective clients who had been pre-screened by the Commerce Department. Gutierrez said he was also introduced to officials at the U.S. Export-Import Bank. The bank is ready to lend money to Gutierrez’s new customers and offer letters of credit.
“What that will do is allow us to offer credit terms to a qualified customer. That is a definite benefit and gives us some flexibility that we normally would not have had,” Gutierrez said.
Another program participant, Pedro Gomez, also has his hands full these days. The president of PG&E; Distributors Inc., which manufactures water-filtration systems in Spring, Texas, was intrigued by the possibilities of e-commerce when he learned about them at a Market Entry Program in Houston last year.
With the help of Mark Matsumoto, chairman of the Southern California District Export Council and the e-commerce instructor in this program, Gomez set up a business Web site using the free Internet storefront builder at https://www.freemerchant.com.
Although Gomez’s Web site has existed only four months, it has already led to sales contracts with companies in Japan and Taiwan, and firms in Malaysia, Singapore and South Korea appear close to making deals as well. The companies found PG&E; on the Web.
Gomez expected his Web site to trigger more sales in Canada and Mexico. “I don’t know why we started to get more replies from Asia,” Gomez said with a chuckle. “But I don’t care. I just want to export the products.”
Gomez, a Colombian native with a staff of 10 and 17 years in the business, said he suspects Net-based orders will increase his business 20% in coming months, and he hopes to add three or four people to his staff by summer.
“To be honest, I was completely surprised by what the Department of Commerce did with us to help us grow and to understand more,” he said. “So many things I didn’t know before, and I have been in business for many years.”
Likewise, Keith Claiborne feels better educated because of the program. The president of Commercial Capital of Los Angeles, an asset-based merchant banking firm, he signed up for the course to learn how to do business in Mexico.
“It was an outstanding overview of the legal issues . . . the cultural nuances and subtleties . . . that have come into effect since NAFTA was enacted in 1994,” he said.
His company is forming a subsidiary that will focus on financing companies in Mexico. Claiborne continues to speak with Commerce officials, other participants and even some of the instructors, most of whom are local experts in trade-related issues.
“The program was extremely useful in helping us to develop our new business,” he said.
Claiborne and Gutierrez were graduates of the inaugural Market Entry Program, which lasted six months, meeting once every two weeks. The course work, Claiborne said, was nearly as rigorous as the workload he handled as a Harvard law student.
“Because of that, I could see why certain people who are running businesses . . . might not have the time,” Claiborne said. “It was probably more than they bargained for. There were originally 20-some people in the class, and it ended with 11 or 12.”
The high attrition rate is one reason the program has been redesigned as a six-week course with one session each week. Trade experts from the Commerce Department and the Southern California District Export Council, an organization of local business leaders, provide instruction.
The next Market Entry Program in L.A. is scheduled for April, and one is underway in Orange County. Other programs will be added as demand warrants, Houston said.
* Companies that want to be considered for the Market Entry Program must be minority-owned, have a positive net worth, have been in operation at least two years and have an exportable service or product. Those interested can contact Houston by phone at (213) 894-3966 or by e-mail at kristin.houston@mail.doc.gov.
