More San Diego companies are competing on global stage

San Diego Business Journal, May 12, 2008 by Mike Allen

Despite competing with the world's largest medical device makers, Carlsbad-based Timely Medical Innovations is becoming so successful that it's selling products to those same manufacturers.

"What we do is low-cost, disposable medical products, and at a high volume. But we've been able to manufacture quickly and manage our supply chain effectively. Some of the biggest medical device manufacturers in the world, such as Cardinal Health and Kimberly-Clark, buy our products," said Michael Grad, TMI president.

TMI makes disposal protective devices worn by health care providers to protect them from infection from blood spattering or other sources.

Founded in 1991, the company has only six employees, and has products made by several small manufacturers in the county.

While Grad would not reveal sales, or profits, he said sales in 2007 increased 20 percent above sales in the prior year. Most gains came from new distribution agreements signed last year that opened up markets in France, Germany, the Netherlands and Spain.

TMI exports to about 17 countries.

Grad is quick to give some of the credit for TMI's success to the U.S. Commercial Services, part of the U.S. Department of Commerce, which helped the company gain access to an industry trade fair in Germany.

Distributor Agreements Signed

As a result, TMI signed four distributor agreements, with six pending, Grad said.

TMI's story is indicative of what's been happening at many U.S. companies, said a federal trade official who presented Grad with an award earlier this month.

Israel Hernandez, assistant secretary of the U.S. Department of Commerce and director general of the department's U.S. Commercial Service, said companies from small to large are finding similar success in international markets in recent years.

By spotlighting a local company helped by the Commercial Service, it inspires other businesses to undertake similar steps, Hernandez said.

"The main message that we're sending is that if you can do business here in the United States, you can certainly do business overseas," he said.

Looking at the most recent statistics provided by the agency, more San Diego firms are seeking out new markets outside the nation's borders.

For 2006, the most recent year available, companies located in the county exported $13.6 billion in goods, up from $13.2 billion in 2005, according to data provided by the U.S. Commercial Service.

One business based here, Cohu Inc., a maker of testing equipment for the semiconductor industry, reported 74 percent of its $58 million in first quarter sales came from exports. Most of these large chip manufacturers have operations in Asia.

For California, total exports in 2007 increased 9.5 percent to $134 billion from 2006.

Mexico is the biggest recipient of San Diego's exports, The value of the goods exported across the border surpassed $5 billion.

Largest Classification

The largest classification of goods sold to Mexico include computers and other electronic products. Most are sent to Mexico for assembly in plants along the border. The final product is sent back into the United States.

The next largest nation receiving locally produced goods was Canada, receiving more than $1 billion.

Hernandez cited the impact of the North American Free Trade Agreement, the trilateral pact among Canada, Mexico, and this country, which took effect in 1994.

"With NAFTA, we have the world's largest free-trade zone and we're trading $1.7 million a minute between the three countries," he said, referring to both imports and exports moved within the three nations.

Hernandez recently was on a trade mission to Africa where he accompanied about 30 executives from U.S. companies to three countries: Ghana, Nigeria and South Africa.

In addition to introducing executives to potential trading partners, the mission set up meetings with government trade officials to talk about the current agreements, and obligations these governments have to ensure U.S. companies are treated fairly, Hernandez said.

"We have to make sure they don't change the rules midway through the game," he said. "It is very much about reducing trade barriers that sometimes prohibit American companies from going (into that nation). We're constantly addressing ways we can level the playing field for American companies."

In addition to its San Diego office, the commercial service operates offices in 46 other states and 76 nations.

Metro Exports Value

For 2006, companies in the county exported
$13.6 billion in goods, up from $13.2 billion in 2005.

EXPORT VALUE 2006

SAN DIEGO   $13,617,790,527
MEXICO       $5,005,315,587
CANADA       $1,034,086,664
JAPAN          $745,891,031
U.K.           $551,620,607

Source: Office of Trade and Industry Information, International
Trade Administration, U.S. Department of Commerce.

Note: Table made from bar graph.