Mr. Capo says El Dorado’s year-to-date total sales and export sales are up about 22 percent over 2000 figures, with the company’s best quarter – the fourth, when many Latin American consumers travel to Miami for Christmas shopping – not yet finished.
Mr. Capo doubts the September 11 terrorist attacks will be a long-lasting detriment to his business, although sales dropped 20 percent to 30 percent in the two weeks following the attacks. He believes El Dorado’s Latin American customers are unlikely to be deterred.
The threat of terrorism, he observes, is a part of everyday life for many in Latin America, where militias guard commercial sites such as pharmacies and grocery stores. “For them to go out on the street and see a cop searching their bags … it’s very normal,” Mr. Capo says. “That doesn’t stop them from going on and doing their chores on a daily basis.”
Mr. Capo says one thing that could hurt the company’s export sales is a reduction in flights between Miami and Latin America. While the federal government and the airline industry are grappling with ways to make airline travel safer while keeping costs down, airlines have cut back on service to many areas following the September 11 events.
So far, El Dorado hasn’t experienced any new costs that can be attributed to the attacks, although Mr. Capo has observed a two- to three-day delay in receiving imports. Imports are now receiving more scrutiny than in the past, and that added attention has also slowed export procedures somewhat.
Lucia De Garcia, president and chief executive officer of Elan International in Newport Beach, California, number 30 on the Top 50 Exporters list, believes the import/export industry will be hit hard by the fallout from the terrorist attacks. But new opportunities also may appear. If markets in Asia and the Middle East become more difficult to reach, she says, other markets will be more attractive, and it only makes sense for the United States to look south. “It will be interesting to see how this will affect us in a good way,” comments Ms. De Garcia.
Mr. Claure believes federal government measures to decrease trade barriers – like those lifted by the North American Free Trade Agreement – will help increase exports and improve the U.S. trade balance. According to the U.S. Census Bureau, the United States last year had a negative trade balance of $436 billion, including a $14 billion negative balance with Central and South America. Mexico is responsible for the largest portion of that balance ($24.6 billion) and is both the largest Latin American importer of U.S. goods ($111.3 billion) and the largest exporter to the United States ($135.9 billion).
Some countries impose import duties of as much as 40 percent on incoming goods, making U.S. products prohibitively expensive, according to Mr. Claure. Still, he expects his company to record more than $500 million in sales this year, largely because of Brightstar’s strategic partnership with Motorola. The pact, signed in 2000, allows Brightstar to act as a Motorola logistics and distribution center.
Mr. Claure attributes a large part of his company’s rapid growth to the phenomenal popularity of cell phones in Latin America, even in poor economies. Lengthy delays – as much as a year in some areas – coupled with costs as high as $2,000 for the installation of telephone lines have made cell phones an attractive alternative for those who need basic phone service at home or at work.
Distribution of wireless equipment is not the only sector that appears immune to recession.
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