Exporting pays off - Omaha Processing Equipment Co - Company Profile

Business America, Feb 8, 1993

A 21-employee Omaha, Neb., company, which has been operating for only four years, is finding many overseas business opportunities for an excellent reason: it can underbid competitors and multiply the capacity of foreign food-processing plants. 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 report success story. Write or call: Business America, Room 3414, U.S. Department of Commerce, Washington, D.C. 20230; tel. (202) 482-3251.

The secret export weapon of the Omaha Processing Equipment Company (OPEC) of Omaha, Neb., is to refurbish equipment from U.S. food-processing plants that have closed or converted to new equipment. The technique enables the 21-employee firm to offer quality equipment at significantly lower prices. OPEC now sells its equipment, together with engineering and technical services, in 26 countries around the world.

John Long, OPEC Vice President, explains, "We buy old machines, go over everything, an install new parts as needed. We might disassemble a whole plant in the United States, then reassemble it overseas. We can increase the capacity of a foreign food-processing plant two to three times and sometimes as much as 10 times. From an efficiency standpoint, we can reduce real cost to foreign processors substantially."

Near Durban, South Africa, OPEC is helping renovate a meat-processing plant, currently capable of handling 50 cows per day. When OPEC completes its installation, the plant will be able to process 500 cows per day. Long estimates the cost to the South African company will be only one-third of what it had expected.

OPEC is exploring the sale of poultry-processing equipment in Russia. "We can greatly increase the efficiency of the Russian plant," Long said. "Our low price is particularly attractive there, because of scarce hard-currency reserves in Russia."

In Chile, OPEC is exploring a project to modernize a poultry-processing plant. The Chilean processor had expected to pay millions of dollars, but OPEC would be able to do the job for only $1.5 million. Long learned about the business prospect while participating in a Commerce Department trade mission to Chile and Argentina last August. He identified 50 other projects in the two countries that could result in sales.

Long also makes good business contacts at such international trade shows as IFFA, specializing in meat-processing equipment, in Frankfurt, Germany; MATIC (meat-processing equipment) in Paris; and VIV in Amsterdam (poultry-processing equipment).

Last fall, the firm created an international department and chose as director W. Todd Johnson, who previously was employed by a Washington, D.C., firm that helps U.S. companies find export financing. Johnson is putting his knowledge of the Eximbank, the Overseas Private Investment Corporation, and the World Bank to work for prospective foreign customers of OPEC around the globe, particularly in Russia and Eastern Europe and the developing countries.

Long receives information and advice from trade specialist Harvey Roffman at the Omaha District Office of the Commerce Department's International Trade Administration. Roffman frequently helps OPEC locate U.S. construction firms that become partners in building and renovating plants overseas.

OPEC, formed four years ago by Long and Dave Thiede, now sells 20 percent of its products in foreign countries, but hopes to increase the percentage to 50 percent within two years.