John Torinus, top executive of decorating film producer Serigraph Inc., favors active steps to go global - feet on the ground - instead of the passive approach of hiring a consultant.
Big multinationals can just buy their way into China or Mexico to enter foreign markets. But Serigraph, a West Bend, Wis.-based company with $150 million in sales, has used a more conservative approach.
Torinus outlined that strategy Sept. 25 during the annual Thermoforming Conference in Milwaukee, organized by the Society of Plastics Engineers' Thermoforming Division. For Serigraph, taking baby steps and building relationships slowly has worked well, he said.
``I am not from a big, multinational corporation doing business all over the world. What we are is a fledgling, midsized company trying to be global,'' Torinus said.
But as a leader in the decorating industry - printing and forming on plastics, making decorative films and company logo badges - Serigraph certainly supplies the multinationals. For example, Torinus said, Serigraph is supplying logos for the five-blade Fusion razor that will be made at Gillette Co.'s new plant in Poland.
Torinus, who is a freelance business columnist for the Milwaukee Journal Sentinel and has a background in newspapers, became chairman and chief executive of Serigraph in 1987. A few years later, company leaders decided to go global. The first move was to hire a sales representative in Mexico.
Serigraph has used sales reps to start out in other countries.
``In my view that was a much better way to do your market research than hiring some consultant to do it in the abstract,'' he said. ``We were out there losing business, winning a little bit, and we learned about the customer base. We learned about price points. We learned about business practices and local cultures.''
In 1996, Serigraph gained production in Mexico when it bought Carvel Print, a specialty screen and offset printer in Queretero. The company added a finishing operation in Chihuahua in 1999.
The one time Serigraph made a quick decision to build a plant in Mexico for one customer, the company got burned when the customer moved the work to another country, he said.
Torinus said Serigraph now employs 800 in Wisconsin and another 500 at the two Mexican plants. Serigraph also has a factory in Shenzhen, China, as well as strong vendor relationships in Taiwan and India.
Today about 40 percent of Serigraph's sales come from outside the United States.
Torinus listed several key points for going global:
* Take an appropriate amount of risk for your company. ``Our general philosophy is to make small bets,'' he said.
* Send over a team of professionals in each area of the business, to train local employees rigorously for about two years. Then bring the team home and turn management over to people from that country.
* In business, human relationships count for a lot in countries like Mexico, China and India, which is another reason to leave the operations to local management you trust. ``We've never been seriously ripped off in our 15 years of global business,'' he said.
* Maintain contact by making regular communications, including visits, to international facilities.
* Be sensitive to local customs, but also insist that each operation follows uniform standards such as ISO and QS. ``Get to standard, world-class business practices as soon as possible,'' he said.
* Hire bilingual young people.
* Begin ``seeding the ranks'' of your business with people interested in global business. Hire carefully to make sure new hires really want to live overseas.
* Don't be arrogant. Instead, listen and learn from a range of people.
For small or midsize companies that aren't ``Chinaproof'' or ``Mexicoproof,'' the most important thing is to get started. ``There's really no substitute for on-the-ground experience,'' Torinus said.
Serigraph officials went through the standard procedures such as benchmarking, reading business books, attending global business seminars and even using consultants. ``But all of that just gets you sort of halfway to first base,'' Torinus told the thermoformers. ``You've got to learn by doing it - by screwing up.''