Exporting pays off - First Co.'s foreign trade efforts

Business America, July 26, 1993

The coming of the fax opened up international markets for a Dallas, Tex., manufacturer of airconditioning/heating equipment. The ability to submit price quotations instantaneously greatly improved the firm's chances to respond to foreign bids and win foreign contracts. We select our export success stories, not because we endorse any particular firm or its business plan and activities, but because we believe their experiences will instruct other companies to improve their export performance. We welcome your export success story. Write or call: Business America, Room 3414, U.S. Department of Commerce, Wash., D.C. 20230; tel. (202) 482-3251.

"Sometimes a small manufacturer finds that its products that aren't so technologically advanced are well suited to the emerging nations," says Harold Hammer, International Sales and Marketing Manager for First Company of Dallas, Tex. The 350-employee family-operated firm, headed by Oslin Nation, founder and CEO, and James Nation, President, makes airconditioning/heating fan coil products for residential and commercial systems.

Hammer explained, "Americans emphasize the latest technology so much that we fail to realize that the emerging countries often prefer older and less advanced products. Never believe your company is too small to do international business."

First Company has found, for example, that some of the products it makes are compatible with the style of equipment used in Latin America. The firm exports to Chile, Venezuela, Paraguay, Brazil, and Mexico, as well as Central America.

Six years ago, First Company exported less than 1 percent of its equipment. Today, the percentage is 20 percent, and it is growing.

Why did First Company, a 27-year-old firm, wait until six years ago to push exports?

"Until then, we had a communications problem," Hammer said. "Say, for example, we wanted to bid on an airconditioning/heating system for a foreign office building. We needed to cite price quotations and swap information so we could match foreign specifications. We used to rely on the telex, which was very slow--some foreign firms did not even have a telex. By the time we got our quotations there, the foreign firm often had already let the contract. All of this changed with the advent of the fax. The fax put us in contact with the world overnight."

First Company's export program began with a phone call to the Dallas District Office of the Commerce Department's International Trade Administration. "We were not well versed in exporting procedures," Hammer said. "We had heard the Commerce Department could open doors. We needed basic instruction on how to ship our equipment and do the paperwork--a simplistic thing but a major hurdle for us!"

Commerce Department trade specialist Tom Shugart provided Hammer with information on shipping and documentation and introduced him to the Department's catalog-magazine, Commercial News USA. Hammer now regularly places ads in Commercial News USA, which he said yields "more responses than we can handle.". Shugart obtains trade leads and marketing information on a regular basis for First Company.

To sell its equipment, First Company relies on U.S.-based foreign agents, and it has an agent in Taiwan. The firm also sells its equipment to a Monterrey, Mexico manufacturer, which sells it under its name, and it has developed a market in the Middle East.

Hammer sees another big plus for small companies in building up exports. "Exporting helps us through the peaks and valleys of the U.S. economy," he said. "When the U.S. economy fluctuates, exports stabilize our business. Another factor: in the slow time of year for airconditioning equipment in the United States--the winter--we can sell in South America, where it is summer. Selling there helps us fill in the gaps."