The Economic Development Pulse Third Quarter 2016 - Page 6

Safety

6

A Q & A with Steve Patton, Parks and Recreation Director

Exporting Tips from a Seasoned Professional

Interview with Mark Merritt

Owner of Westech Seal, Inc.

As the Permian Basin economy experienced decreases in oil prices within the past year, several businesses and their employees were affected more than others. Many established businesses have felt the effects of previous busts before and have taken measures to soften the impact of future downturns. During the crash of 1987, Mark Merritt found himself unemployed. Rather than seeking employment elsewhere, Mark and two others started Westech Seal, a manufacturer of mechanical seals and related components for centrifugal pumping, in the fall of 1987.

Seeking to operate proactively, Mark diversified his business by entering into international markets in 1995. As a novice exporter, Mark was faced with many challenges that are common among businesses exporting in the oil and gas industry. Learning to navigate international shipping, finding new customers overseas and processing payments from foreign currency are some of the many challenges Mark discusses in our Q & A below. Twenty-one years later, Mark continues to diversify his product lines and his seals can be found in over seven countries and sold by distributors. He is currently the Chairman of the West Texas Export Council.

1. How has Westech Seal grown since 1987?

We first started the business in a 2,400 sq. foot garage selling parts during the day and making the parts in the evenings. We started selling nationwide and the following year hired two new employees. By 2005, I had 25 full-time employees. Over the years, I’ve taken advantage of automation processes and lean manufacturing techniques which has helped maintain a staff of seven in a 25,000 square foot precision manufacturing facility.

2. How was the West Texas District Export Council established?

In the mid-90’s, six businesses in West Texas started to see an increase of international companies contacting them to purchase products directly versus purchasing through a third party.

These business owners were unsure of all the exporting requirement’s so with the help of the U.S. Department of Commerce, the West Texas DEC was formed.

2. How was the West Texas District Export Council established?

In the mid-90’s, six businesses in West Texas started to see an increase of international companies contacting them to purchase products directly versus purchasing through a third party. These business owners were unsure of all the exporting requirement’s so with the help of the U.S. Department of Commerce, the West Texas DEC was formed. Over time, the group has evolved and has a database of government resources available for exporting. The organization is a group of volunteers who are business owners, government liaisons, and non-profits supporting exporting. The Council has helped many Odessa businesses, and is a great alternative to third party exporting consultants whose fees can range in the $100’ks.

b) How to ship products internationally – The important factor in shipping is knowing your customer and their country. The U.S. Government and State of Texas does not want businesses selling to fraudulent customers. Each country including the U.S. keeps a list of “denied” vendors available to protect exporting businesses from making transactions with vendors with a history of fraud or other bad intentions. After checking the denied vendors list, the beginner exporter will need a broker for shipping assistance and completing paperwork, such as UPS or Fedex. Both the U.S. and receiving destination customs will need to approve the shipments and will need a Certificate of Origin on incoming products. Each county will have different requirement’s, and if those are not met, customs can hold the shipments for months, possibly even destroying it.

A seasoned exporter’s biggest challenge is finding new customers in different markets.

5. What advice would you give to a business owner wanting to start exporting?

The West Texas DEC is a great starting point to ask questions and get advice from business owners who have experience with exporting. The group has a variety of government resources, and I encourage businesses to take advantage of those. The West Texas DEC is hosting an export conference on March 31, 2017 on the UTPB campus that will have simultaneous presentations for beginners and seasoned exporters. Keep up-to-date on the conference at www.exportexas.com/westtexas.