Guardian Pool Fence Systems is in talks to enter into a joint venture with a Saudi Arabian company to provide pool safety equipment in that desert country. Guardian, based in Van Nuys, sees the Middle East as an untapped market for its products, especially in light of plans for Saudi Arabia to build several new cities in coming years. Guardian owner Steve Sadinsky said it has a memorandum of understanding with A. Bin Taleb Commercial and Industrial Co. Details of the venture need to be worked out, he said. The partnership will boost Guardian’s revenues, although Sadinsky said it was too early to know just how much the company will benefit. An additional $1 million in revenues is possible but would not happen immediately, he added. As one of the leading suppliers of pool safety equipment, Guardian holds two patents and has two others pending. Residential homes, be it in the San Fernando Valley or in Saudi Arabia, all have the same issue of keeping children away from swimming pools. Guardian fences have been installed in Europe, Israel, Central America and Mexico. The U.S. is the company’s biggest market. Saudi Arabia attracted $11.6 billion in U.S. exports in 2010, according to the U.S. Census Bureau. New and used passenger cars represented the category with the most exports that year, valued at $3.3 billion. With exporting seen as a way for the U.S. to rebound from the recession and create jobs, President Obama created the National Export Initiative with the goal to double U.S. exports by 2015. A September 2010 report to Cabinet members and administration trade officials recognized the many hurdles small and medium-sized businesses face in selling overseas, including obtaining financing and a lack of information about exporting and market research. In Saudi Arabia particularly there are the added hurdles of a language barrier and a culture of doing business where patience is a must. Asim Khan and his Khanstellation Group, an Orange County export management business, assisted Sadinsky in connecting with Bin Taleb. Khan hooked Guardian up with a distributor in the United Arab Emirates who purchased one order of safety equipment. Sadinsky next made contact with Khan toward the end of 2010 about getting into other Mideast markets. (Khanstellation Group later acquired a similar company and changed its name to the purchased company, Zeons Global.) Dozens of bidders Khan was in Saudi Arabia in March and met with up to a dozen companies to be a distributor for Guardian. That number was then whittled down to three before Bin Taleb was selected. Bin Taleb manufactures swimming pools and related equipment. The company has done business with U.S. firms in the past, Khan said. Rather than being a distributor, Bin Taleb suggested a joint venture with Guardian in which it would put up 95 percent of the cost to manufacture Guardian fences in Saudi Arabia. The proposition would be more cost effective than shipping finished product to the Middle East and was one Sadinsky was willing to listen to when Khan presented it. Such a deal would require Guardian to reveal its manufacturing know-how and some trade secrets to Bin Taleb. Before that can happen “a very good contract” needs to be worked out between the two companies, Sadinsky said. By manufacturing in Saudi Arabia, Bin Taleb can make the fences cheaper and be in a better geographical position to service the 20 other countries it distributes to, Khan said. A company such as Guardian, whose name is known around the globe, can find a secondary market in licensing out its name and collecting royalties. “We are able to cut the pie in more than one way,” Khan said. Patience needed To cut that pie takes a different approach than found in the U.S. Saudi businessmen are not as time driven as their American counterparts, Khan said. He has found himself in the position of being called by a sheik to discuss business only to find that the man has jetted off elsewhere. One needs to have more finesse than usual when in negotiations with the Saudis, said Khan, who speaks Arabic and five other languages. “Patience is the name of the game,” Khan said. “There is not anything they have not seen or heard of.” Showing patience is where Sadinsky now finds himself until the details of the joint venture can be worked out. He is optimistic the Saudi market is the right one to get into and that Khan has done a good job up to this point in getting Guardian into that market. With three new cities at the center of an effort by the kingdom to diversify its economy away from the oil industry, the homes that will be included will need safety features installed by the pools. Sadinsky is satisfied that Guardian fences are the best safety equipment available. “It is not easy to develop a system that prevents children from getting into a pool,” Sadinsky said.
Guardian Eyes Saudi Opportunity
