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Thursday, Sep 28, 2023

Exporting: Local Industry Savior?

They say it takes a village. And so several groups of businessmen and non-profits have banded together in hopes of developing a network that will enable manufacturers to export their goods. The export market, these groups say, is the key to building back many of the San Fernando Valley’s ailing manufacturing businesses. And helping these businesses to move into the export trade requires participation from many different sectors. These groups hope to create an infrastructure for exporting that will include a database of the export community and consulting services. Tony Ceballos, an international trade specialist with the West Los Angeles office of the U.S. Commercial Service, a branch of the U.S. Department of Commerce is among the leaders helping to facilitate that. Ceballos has set up regular office hours at Pierce College’s International Trade Center, where he is currently meeting distributors and manufacturers, and is working closely with the Economic Alliance of the San Fernando Valley and one of its in-house subsidiaries, the Valley International Trade Association. “From our perspective it’s a very unique but natural relationship,” said Bruce Ackerman, the president and CEO of the Economic Alliance. The first project between VITA and the U.S. Commercial Service is the build-up of a database to map the export trade community in the Valley. The database contains 400 entries so far, and Burbank-based Certified Thermoplastics Co. is among them. The 21-employee business a plastics manufacturer would make a good candidate for the poster child of the Valley’s changing manufacturing landscape. In 1978, when the company was formed, the Valley’s aerospace industry was very healthy and so it made parts for airplanes, the space shuttle, and other craft larger parts for which were manufactured by the aerospace giants of that day: McDonnell Douglas, Boeing and Lockheed. How times have changed these days, Certified makes parts for irrigation pipes. Its customers are governments and businesses in nations from Europe to Southeast Asia, such as Singapore, Malaysia, China, France and Spain, said George Duncan, president of Certified. What happened in between? “When aviation went into a tailspin, our business went down with it,” Duncan said dryly. As that happened, Duncan began manufacturing for business machines called “engineering plotters.” After that, it was onto “specialty lighting, architectural lighting and on and on,” he said. But just as industries changed, Internet and other communication tools brought the world closer together, forming the global economy that is today. Some 70 percent of Certified’s $5 million in sales so far this year were shipped overseas. “Our customers went overseas and we went along with them,” Duncan said. Then, there are distributors of goods made in other U.S. states who are involved in shipping them overseas. Michelle Gottlieb, who has sold air purifiers manufactured in Tennessee worldwide for close to eight years out of her Glendale home is also already in Ceballos’ database. Regular meetings Meanwhile, VITA may be one of the smallest branches of the Economic Alliance if judged by its budget, but it’s holding monthly breakfasts regularly at the conference room where the Economic Alliance’s board meets. Last Wednesday’s networking business breakfast brought about 10 attendees to the second floor conference room at the Alliance. They included trade consultants, an accountant and the president of the Monterey Bay International Trade Association Tony Livoti. The topic of discussion was “Security Issues,” and the keynote speaker was Robert Krieger, president of Norman Krieger, Inc., a customs brokerage and international freight forwarder. Krieger described security issues and the rules and regulations put in place by the departments of Homeland Security and Commerce that are of concern to exporters, while Livoti came to introduce TradePort.org, a “click-and-mortar Web site to process business transactions.” “We’re working on new technology,” Livoti said. “We can do new, remarkable things online.” Krieger and Livoti represented the kind of speakers VITA breakfasts usually hosts. Meanwhile, academia has also signed on to do some of the legwork to make the database happen. Pierce College’s International Trade Center Director Bert Sanchez is applying for a federal grant to fund the purchase of equipment and plans to get students involved in research. Sanchez, who has organized several events that brought together businesses representatives of foreign nations interested in importing American goods, believes the database is badly needed. “What I found is everyone has a little bit of something, but there’s no master list,” he said. Sanchez is also trying to secure a grant to set up an international video conferencing center at Pierce, because the closest facility available to Valley companies, he said, is in Culver City. According to Encino-based consultant Ayse Oge, who is the lead volunteer in organizing VITA breakfasts, the full use of technology primarily Web sites is important if firms want to grow their export business and/or begin it from scratch. “Size is not important because technology has caused the marketing price to go down,” Oge said. “Small business has an advantage because they are not cluttered by bureaucracy.” Gradual process The Web marketing and other Internet-centered techniques may require “a gradual process,” but it is a process that pays off, since American business especially goods made in California are highly regarded worldwide despite possible setbacks, including the Bush Administration’s war on terror. “Everything that is California has a big niche overseas,” Oge said. “There’s so much appetite in world demand for American products.” Oge pointed out consistent Web site management is crucial to a successful Web marketing scheme. “The Web presence is the key it gives you the edge to be (in the) global economy,” Oge said. Web presence or not, small and medium-sized businesses still need to network and have access to international trade programming that stimulates their interests something that the Valley is lacking, Ceballos reaffirmed. “The need is obviously there they don’t have the resources to meet buyers and sellers,” Ceballos said. “It’s a barrier to international trade because they do not have the resources.” Ceballos has reached out to the chambers of commerce in the Valley, but going to their breakfasts, he “found there is no awareness” directly relating to stimulating international trade. “The highlight is to sell to each other is very short-sighted,” Ceballos said. That certainly isn’t a problem in downtown, the Westside or other parts of the city of Los Angeles. The Los Angeles Chamber of Commerce hosts a number of programs, with numerous partners, including the U.S. Commercial Service. Recently, Ceballos helped build up an international trade program within the Beverly Hills Chamber of Commerce. He helped chamber officials there organize an annual event and “about seven or eight small breakfast seminars.” Creating jobs “The political motivation is to add value to the U.S. economy and to reduce trade deficit and create new jobs,” Ceballos said. “Those are the overarching political and economic goals we are trying to achieve.” William Schreiber, founder and president of 7-employee Smart Sonic Corp. in Canoga Park, is also on Ceballos’ radar. “(The U.S. Commercial Service was) looking to increase exports and my company has relatively good exposure as far as its reputation,” he said. “They were going to identify market openings in Asia for me and identify future exposure.” Smart Sonic has 45 distribution points worldwide and has exported since its inception by Schreiber, a trained biologist with an MBA to boot who founded the company in 1990. Operating out of a 4,500-square-foot office, Smart Sonic makes equipment and chemical items used in cleaning printed circuit boards. Its clients include Motorola and Intel, among other multinational, multibillion-dollar corporations. With assistance from the U.S. Commercial Service, Schreiber added two new distributors to his network, one in Austria and one in Germany. Both locations allow access to the bloc of freshly minted European Union members Hungary and Bulgaria, as well as eight other nations. “I guess I’m like a shining star,” Schreiber said, referring to what he thinks the U.S. Commercial Service perceives of his company. Schreiber said he has turned down invitations to go on multi-country trips with the Commercial Service to meet new contacts, because “they weren’t focused enough on my particular niche.” Further, Schreiber hopes the cost of doing business decreases in California, as that will enable him to purse research and development, crucial to a high-tech company. “We’re in a high-tech market, the only way to stay in business is to keep ahead in technology,” Schreiber said. “You’ve got to invest money and develop product.” As he grooms his son to take over the company, Certified’s Duncan aims to grow his business, but not “overly aggressive.” And he doesn’t have any regrets that “we didn’t become a giant company,” adding that “we didn’t run debt.” Ironically, Duncan noted “our overseas customers do their own engineering,” perhaps alluding to the well-publicized underlying cause of the erosion of traditional manufacturing in the U.S.: offshore outsourcing of jobs. “Looking at the universe, it makes all the sense in the world,” he said. Economic Alliance’s Ackerman, meanwhile, wants international trade awareness to grow in the Valley. “A lot of the economy in the Valley is somehow touched by the international flavor (and) we are continuing to get our arms around that,” Ackerman said.

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