Going global
Small Texas firms get help selling products overseas
By BARRY SHLACHTER
STAR-TELEGRAM STAFF WRITER
Not all U.S. manufacturing jobs are being outsourced abroad.
Thanks to export assistance centers set up by the Department of Commerce, including two in Tarrant County, even modest family-run businesses have been able to identify prospective customers, confirm their financial well-being and sell them locally made goods, which helps keep Texans employed.
Renato Riccio is exporting North Texas-made $30,000 wood-fired pizza ovens to Asia.
And Tom Misfeldt of Fort Worth has found buyers in Asia, Australia and Europe for his meat-slicing machines.
A block across University Drive from the Modern Art Museum of Fort Worth, in a light-industrial area that boasts companies selling everything from designer textiles to yoga lessons, stands Misfeldt's Spirocut Equipment Co.
In 2004, it was wrestling with a dilemma: What does a small business do when its only product rarely wears out but might eventually saturate a very snug niche market?
"It came to the point where I thought, 'Gee, everyone in this country already has one,'" Misfeldt said.
The family venture decided to find customers overseas for its $10,000 spiral-ham cutting machines, known as Spirocutters.
The company is run alongside the Misfeldts' other business, Ranch Oak Farm smoked meats, begun here in 1941 as a sideline by the owners of A. Brandt Furniture, which produced the Ranch Oak furniture line.
Seldom does a customer need more than one spiral slicer, which cleverly cuts around the bone of a smoked ham and can be converted to carve a cooked turkey breast. With proper maintenance, they can cut up hams for decades.
Over the years, Misfeldt and his wife, Carol, had been contacted by foreign companies. They shipped the odd Spirocutter overseas as early as 1991.
But the small business, which did $235,000 in sales last year, lacked the staff or resources to check the finances of companies expressing interest.
The day Misfeldt approached the U.S. Export Assistance Center about an inquiry from an unknown company in Australia, a trade official from Down Under happened to be visiting.
As a result, Misfeldt got a lightning-quick turnaround, getting all he needed to determine the Aussie company's reputation and credit rating.
The customer soon bought a machine, and exports have been steadily climbing ever since.
Export assistance centers opened in 1994 during the Clinton administration, and 109 operate across the country with an overall budget that tops $220 million.
Fort Worth has one downtown, and the other Tarrant County office is located in a leafy Grapevine area a few blocks from the Delaney Vineyards winery.
The local centers helped 12,491 export deals in fiscal 2005, up 1,068 from the year before, according to the department.
The Commerce Department has been reined in for claiming to have accomplished more than it had, however.
Its in-house watchdog, the inspector general, found that the department had inflated by $4.33 million foreign sales that the assistance centers helped generate in 2003. A department spokesman said projected export sales had been mistakenly included. In 2004, the agency enhanced oversight of export "success" information, he said.
Misfeldt, for one, is pleased about how the centers vet inquiries. Referring to a local export assistance officer, he said, "David Royce helps us do due diligence on their creditworthiness."
Foreign shipments now amount to 17 percent of sales.
"This is important because it represents where this business was 15 years ago," Misfeldt said. The weak dollar has helped, particularly with Australian buyers, he said.
Cowtown-made Spirocutters are used in Mexico, Canada, Iceland, Britain, Ireland, Denmark, Norway, Belgium, Jamaica and the Philippines.
Because the Misfeldts sell spiral-sliced smoked hams, prospective buyers can fly into town and watch the machines in a real setting.
"One guy came in all the way from Greenland, saw us use the machine and said, 'That's what I want,' ordered and left."
Royce, a export specialist with the Grapevine assistance center, said that various misconceptions have kept businessmen from exploring foreign markets. "Some companies think there are greater risks to exports," he said.
But once a decision is made to export, a company must be serious about following through.
"Staffing has to be committed to address their export potential," he said. "It does take a commitment. And you get out of it what you put in."
Riccio had a different problem than Misfeldt.
The former food and beverage manager at the Petroleum Club and Colonial Country Club had started a company in 1981 that built and sold wood-burning pizza ovens.
Wanting to expand into Asia, Garland-based Renato Ovens needed to identify companies dealing with food-service equipment that could import the ovens and serve as distributors to five-star hotels and high-end restaurants in newly affluent markets of India, Thailand and China.
The fact that Hyatt Regency hotels in the region already had Riccio's pizza ovens, which range from $10,000 to $30,000, gave the product market credibility.
"The U.S. Commerce Department delivered 125 percent," said Riccio, who has become something of a walking advertisement for the export assistance centers' bureaucrats.
Instead of spending $4,500 or more to set up at a trade show, the department's staff at embassies drew up lists of potential distributors and reviewed the performance and reputation of each.
"They had done the legwork and lined up people ... pre-qualifying them for me."
The timing couldn't have been better.
After the December 2004 tsunami, many upscale resorts in Thailand were upgrading their properties. Riccio linked up with one of the companies introduced by the department, and "we sold several units right off the bat."
As a result, his Asian sales are up 15 percent, he said.
ONLINE: http://www.spirocut.com/
EXPORTS AND TEXAS
Texas exports increased almost 10 percent in 2005 over the previous year, and 36 percent from 2001 to 2005, to $128.8 billion.
From 2001 to 2005, Texas exports increased to many of the state's top destinations, including Canada (39%), China (211%), Mexico (20%), South Korea (162%) and Taiwan (31%). Texas' exports to many other destinations also showed solid gains.
Machinery, transportation equipment, computer and electronic products, and chemicals ranked among Texas' leading exports.
Texas firms exported to 218 foreign destinations in 2005 -- and Texas ranked first among exporting states.
22.7 percent of all manufacturing workers in Texas depend on exports for their jobs (2001 data).
A total of 28,300 companies exported from Texas locations in 2004. Of these, more than 91 percent (25,849 firms) were small- and medium-sized businesses.
Small- and medium-sized companies generated 25 percent of Texas' total exports of merchandise in 2004.
SOURCE: U.S Department of Commerce
To contact the U.S. Export Assistance Center in Fort Worth, call 817-392-2673; to contact the center in Grapevine, call 817-310-3744.
EXPORTING TIPS
Dedicate top-level management and develop a clear export strategy.
Identify your market(s) -- conduct research and a risk/reward assessment.
Be patient and realistic when going international. Take a long-term approach and allow sufficient time for due diligence.
Seek professional help from the U.S. Commercial Service, District Export Council, bankers, international legal firms or freight forwarders.
Make sure your product is export ready (standards compliance, regulations, labeling, licensing, etc.).
Understand and select the best distribution channel for each country. (Do research on all potential distribution partners.)
Create payment terms and conditions that meet the market's needs/standards. You can offer terms to your foreign buyers. Meet your competitors head-on by using the EXIM Bank and SBA Export Programs.
Design your Web site to be attractive and responsive to foreign buyers. Visit www.export.gov/sellingonline.
Take advantage of U.S. government export promotion services, which include everything from export financing to market research to advocating for your products in overseas markets and are affordable and effective, regardless of the size of your company.
SOURCE: U.S. Commerce Department
Barry Shlachter, (817) 390-7718 barry@star-telegram.com
