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Over There
Area manufacturers look to exports for growth — and find them
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Business New Haven
11/6/1995
By: Michael Gomez
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Former Secretary of State Dean Rusk once said, “While we are sleeping, two-thirds of the world is plotting to do us in.”
While Rusk was referring to the Cold War, his comment applies just as well to today's cutthroat global economy, where business survival - let alone success - depends on finding and exploiting new markets.
For many businesses, those new markets are overseas, no less so for southern Connecticut manufacturers. These local companies are making forays into foreign lands, proving you don't have to be big to do business “over there.
It's About Time
As the people of the former Soviet bloc say nyet to communism and howdy to U.S.-style capitalism, they will need, for example, the simple time-keeping devices of the American shop floor to account for workers' attendance and to monitor job costs in their push for profits.
That's where the Stromberg division of New Haven Manufacturing Co. hopes to punch in with prosperity. This week, a representative of Stromberg, which makes time stamps, attendance recorders and other documentation products, storms Riga, Latvia's capital city, in a campaign to develop contacts that can lead to contracts.
Vilis Gulbis, Stromberg's incoming head of international and domestic marketing and sales and a native of Latvia, explains, “Riga is one of the central entry ports into the former Soviet bloc, providing access to all the major countries of Eastern Europe.
“We'll find people in business and industry there, explore trade shows and set up whatever direct contacts we can” to begin establishing a beachhead for the sale of Stromberg's products.
While Eastern Europe may be a new market, Stromberg is an old pro at exporting, having first put its toe in the overseas marketplace 30 years ago. “Ours are user-friendly products, natural for overseas exporting,” explains Joseph Chernauskas, manager of customer service, who will retire this month after 38 years of service. Gulbis will succeed him.
One of four divisions of New Haven Manufacturing, Stromberg is the company's largest unit, accounting for about 30 percent of the privately held firm's sales. About a third of Stromberg's revenues derive from exports, with future sales growth in exports confidently projected by chief financial officer Edward Young. Stromberg ships some 2,000 units annually, mostly time clocks and perforators - hole-punchers used to stamp unalterably such documents as X-rays, invoices and lottery tickets. These products retail overseas for $400-$3,000.
Doing the
Dirty Work
Export growth at New Haven Manufacturing will be fueled by a revamped seven-person team working out of the firm's Blake Street offices. The group will comprise sales pros who speak the languages of burgeoning overseas markets - Spanish, German, Italian, Latvian and Russian.
But not all manufacturers want an in-house export shop. Ted Wright, vice president and co-owner of Masten-Wright, is glad they don't.
“We specialize in being someone else's export department,” says Wright. Indeed, when you call Wright's North Haven office, you are answered by a receptionist who announces, “International Department.”
“For all intents and purposes, Ted is an Electro-Flex employee,” says Robert Murphy, vice president of sales for Bloomfield-based Electro-Flex Heat, Inc., a $5 million manufacturer of drum heaters, flexible heating systems and temperature controls for OEMs (original equipment manufacturers).
“Ted acts as our rep,” Murphy explains. “He represents us overseas and works with clients' engineering and sales people. Then he contacts us and explains the cost structure and product applications.” Exports account for ten percent of Electro-Flex's gross sales, with most goods shipped to Canada and Japan. Masten-Wright has represented the company for just a year, but prime sales leads have increased and, “Our export business is growing for the first time in four years,” Murphy adds.
Masten-Wright ships more than 6,000 units a year overseas on behalf of manufacturers of electrical and electronic specialty materials, sporting goods and industrial process controls and instrumentation. The firm generates more than $50 million in annual sales, making it one of the largest export management firms in the U.S.
Opening New Doors
West Haven's Bilco Co., maker of the famous basement entrances found on many baby-boomers' childhood homes, sells that Bilco hatchway to consumers predominantly in the U.S. Its architectural products division, however, has found doors open to industrial sales in Canada and Europe.
Bilco provides the overseas building industry and utilities with roof access doors, fire vents, floor and vault and sidewalk doors. Five years after taking its export operation in-house, Bilco's two-person international department has developed sales in 35 countries.
Expanding its reach beyond the Western Hemisphere, however, is a harder sale, according to Steve Cermola, international sales and marketing manager.
Selling to companies in the Far East and in Latin America is a challenge. Countries in those markets tend to adopt less standardized building codes, he notes. “These countries also pay varying degrees of attention to safety,” he adds, which has a dampening effect on the sale of products such as fire vents and floor doors.
These business and cultural differences make it hard for companies like Bilco to market their products, which have been designed to comply with stringent U.S. building and occupational health and safety codes. “We must find a way to influence these other countries in adopting our standards,” Cermola says.
Founded in 1926, Bilco in its early decades pursued overseas sales only when queries came in over the transom. “Up until the 1960s,” Cermola explains, “we simply reacted to export opportunities.” Bilco soon opened sales offices in Canada and the United Kingdom to take advantage of that era's building boom, and hired an export agent to scour other markets for sales. That agent was no longer needed when Bilco developed its internal export unit in 1990.
Though the company does not divulge financial information, Cermola says exports account for ten percent of Bilco revenues. Growth potential is huge, he allows, citing the Far East as a “hot spot for construction.”
Patently Successful
But no spot is hotter than cyberspace.
The Internet, with its boundary-less universe, is a natural location for East Haven's MicroPatent to promote its computerized patent data products. Founded in 1989, MicroPatent is the world's largest supplier of U.S. Patent Office information on CD-ROMs, shipping each year some 200 CD-ROMs of patent data to more than 1,000 subscribing clients.
MicroPatent in 1994 developed a home page on the World Wide Web to provide free to cybersurfers new patents just two days after issuance by the patent office.
“We felt it was necessary to provide this data free,” explains MicroPatent president and founder Peter Trace. Altruism aside, the service also has generated highly targeted sales leads from more than 5,000 businesses that want to learn more about how to stay on top of intellectual property rights.
Trace started MicroPatent after a stint at a Woodbridge firm that microfilmed patent data - designs and formulas for new products. “The U.S. Patent Office each week produces 2,000 patents,” he explains. “We were spending up to $300,000 per year to buy the patents in paper form before we could then microfilm them. So I had the bright idea to buy the patents on computer tape and translate them onto CD-ROMs.”
Trace took that visionary notion and started MicroPatent, selling monthly subscriptions of patent abstracts to, at first, corporate libraries and Fortune 500 companies.
But as the computer quickly became an essential business tool in the early '90s, MicroPatent blasted off, with sales doubling by the year. Now, MicroPatent generates $7 million in sales from a handful of online database products. Half that revenue comes from clients in more than 40 countries, with exports concentrated in Germany, England, France and Japan. “There clearly is some relationship between a client's distance from the U.S. Patent Office and his need for information,” Trace notes.
“With this being the world's largest technological database - more than two million patents and 20 million pages - it will always be used.”
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