October 31, 2014

Penny Pinching

| 11/1/1995
Three years ago, the state Legislature set aside $1 million to fund the Florida Trade Data Center in Miami. Next month, the funding runs out, and the center may be doomed.

The state House of Representatives earlier this year approved a new three-year, $1 million grant for the center as part of a comprehensive economic development bill. But the Senate, divided over the future of the Department of Commerce, failed to pass the bill.

Allowing the center to fold may be penny-wise, but it certainly will be pound-foolish. After its $1 million state grant was matched with $1.4 million from private sources, the center opened for business in June 1994. Designed to be a self-sufficient information broker, it sells mailing lists of overseas importers, distributors and agents in myriad industries to Florida exporters, and also maintains a comprehensive trade library and database.

In its first full year, the center took in $81,000 from more than 500 companies which bought information. For the year ending June 30, 1996, data center Chief Executive Officer Charlotte Gallogly expects to generate $150,000 in revenue. Most customers are small businesses, and the records show they buy lists of everything from medical supplies distributors in Chile and dinnerware importers in Brazil to door importers in Russia. The center also runs day-long seminars teaching the basics of exporting to small-business people. On a recent morning, 15 companies ranging from baby clothes retailers to auto parts distributors paid $95 each to attend a seminar.

Gallogly says the center will be self-sufficient by 2000. More than 3,000 people have used the center's free library, and Gallogly says more than 600 people per month are visiting it now. It's a valuable resource for business and its stacks include Yellow Pages from every Latin country, comprehensive foreign industry reports written every year by U.S. Consulate officials, lists of worldwide trade shows and a database of more than 55,000 Latin trading companies.

Gallogly, who was director of economic development for the city of Miami in the mid-1980s, has grand ambitions for the center. The center has enough space - and demand, says Gallogly - to open 40 small sales offices on the premises. Companies could rent the offices to show products to visiting traders. Local banks have also expressed interest in moving some international lending specialists to the center.

The center has some high-profile supporters. One fan is House Speaker Peter Wallace of St. Petersburg, whose father built a family export business selling baby chicks to poultry farmers in Latin America. Wallace visited the center earlier this year: "I was very impressed with how much interaction it was having with Florida's business community."

Wallace will try to restore funding for the center in next year's budget, but says the Commerce Dept. will have to find funding until then. "It's a cost-effective way of assisting Florida business," he asserts.

Another supporter is Rep. Ron Klein, Democratic chairman of the House's Commerce Subcommittee on International Trade and Economic Development. "Florida is a small-business state and there are a lot of entrepreneurs around the state who don't have an international marketing department," he says. Klein adds that the center delivers valuable trade-lead information to small businesses, which they can't find as easily or cheaply elsewhere.

Klein says Chiles and the Department of Commerce are looking for ways to fund the data center out of Commerce's budget if necessary.

Gallogly, who wins raves from both Wallace and Klein for her management of the center, finds the whole experience exasperating. "We've really got a wonderful product, we're on the way [to being self-sufficient] and we really have no support," she says.


Heavy Lifting
How a former actor became an importer of Chinese-made forklifts to the Americas.

After years as a singer and performer in Uruguay and Argentina, Jackie Jacob Werba finally made it to Broadway in 1986. The star of "L'chaim to Life," an English/Yiddish musical, Werba was dubbed by one critic "the Argentinian Jewish Tom Jones."

By 1989, the White Way had lost some luster for Werba, who moved with his wife and two young sons to North Miami Beach and started a business. Called King Worldwide Inc., the enterprising Werba quickly built up a decent trade buying used forklifts and other equipment in the U.S. and reselling them in Latin America. He also did a small business selling Chinese-made motorcycles and buses.

King Worldwide relocated to Hallandale in 1994. That same year, Werba's 20-employee operation was threatened when the governments of Brazil, Argentina and Uruguay banned imported used equipment to boost domestic manufacturing. Werba scrambled to find other products to sell.

On a trip last year to China to meet with his motorcycle manufacturer, he learned of a Japanese company that was making forklifts in Hefei, China. Werba convinced the company to make him its exclusive distributor for North and South America, although he hadn't planned to sell forklifts in the U.S. "I was looking only for the Latin American market," he says.

Werba won't identify the Japanese manufacturer, but the forklifts come with either Nissan gasoline engines or Isuzu diesel engines, which give them marketplace credibility. Because the forklifts are made with Chinese labor, they're considerably less expensive than models made in the U.S. or Japan. Werba started a new company, King Lift Inc., to import and distribute the forklifts.

Before he sold any, Werba had a sample forklift sent to him to show other distributors. One distributor, Jim Belotti, immediately volunteered that he could sell 50 of the forklifts in the U.S. Werba couldn't believe it, but Belotti had the orders before the first batch of machines arrived from China. Today, Belotti is vice president and marketing manager for King Lift.

While Werba says the quality of King Lifts is comparable to the top brands, the major advantage is price. Werba says King Lift can sell a 2.5-ton forklift at retail for about $18,000, compared to $23,000 for a major brand.

The first 37 forklifts arrived in Hallandale in July, and more than 70 others have come since. Werba, who is 54 years old, is optimistic that he can sell 1,200 King Lifts in the U.S. and another 500 in Latin America in the coming year. The total U.S. market for forklifts was about 100,000 last year, so Werba essentially is hoping to capture a 1% market share. In August, his fledgling operation was buoyed when Coca-Cola Costa Rica ordered 36 King Lifts for its Caribbean Basin operations.

Industry observers say Werba's goal is reachable. The Korean manufacturer Daewoo began exporting forklifts to the U.S. last year and has captured market share with a similar, low-priced vehicle. "If they can present a quality product and back it with dealer support, they will do quite well," says Sterling Weiss, associate publisher of Material Handling Wholesaler, a trade paper for equipment distributors.

Werba has signed up six of what he hopes will be a total of ten U.S. regional distributors to provide warehousing and repair services and to help recruit local King Lift dealers.

One of them is Peter Vaz, who owns a Nissan forklift distributorship in Tennessee and sells about 40 used forklifts every month from a Fort Lauderdale facility. Vaz's company, Worldwide Wholesale Forklifts, will distribute King Lifts in Florida, Alabama, Georgia, Mississippi and Tennessee. He says the key to King Lift's future will be whether Werba's regional distributors can provide uniform-quality service and spare parts to customers. "I've urged Jackie to go slow and set up the network so it works."

Werba returned to China in October with Vaz and an entourage of 15 to negotiate production schedules with the Hefei Fork Lift Truck Works. He planned to bring back three engineers to help him set up quality-control and repair operations.

"We know that the competition is not easy," Werba says, "because we are coming in with the King Lift brand, which nobody knows, and we have to compete with the giants. But we can compete with anybody."

Tags: Florida Small Business, Politics & Law, Business Florida

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