APEC CEO Discussion: Spika Welding
As part of USTR.gov’s APEC 2011 outreach, USTR.gov spoke to American business leaders about their companies, the importance of international trade, and how trade within the Asia-Pacific region can help their organizations grow. Today’s CEO discussion is with President and CEO of Spika Welding, Tom Spika.
Spika Welding Benefits from Increased International Trade
“Spika has become recognized as an industry leader in the field of specialized work platforms, primarily focusing on aviation maintenance support. Our products have proven their value in aviation maintenance facilities within every branch of the United States military, as well as throughout various commercial industries. We have now begun investigating and pursuing opportunities in the global marketplace, and are finding a strong need and desire for the unique equipment we offer.
“Our company is small, with less than 30 employees, and is situated in rural Montana. Primarily dependent on agriculture, Lewistown, with a population of 7,000, benefits considerably from small non- agricultural industries such as ours to diversify and strengthen its economy. With $3-4 million in annual sales, Spika's contribution of ‘outside money’ to our local economy through wages, supplies, and capital investments is important to our community and our state. If we are able to secure sales from new and active markets outside of our country's borders, the growth and success of our company will translate into additional jobs and opportunities for our community.”
Trade Barriers Can Negatively Impact Spika Welding
“Our greatest obstacles to succeeding in bringing in these sales, however, are the cost of freighting large equipment across the ocean and the regulations, duties, and other trade barriers that add cost and complexity to the sale. While transportation costs will always add significantly to the customer's cost, there is opportunity to greatly reduce or eliminate these other costs of export through implementation of more open free trade agreements and elimination of restrictive regulations and taxation.”
Spika Welding is Looking for Increased Market Access Abroad
“Spika offers unique designs and products that continue to set new standards for OSHA-compliant work platforms. Our initial findings indicate that industries in many countries, primarily within the aviation community, have not even seen products such as we offer. This demonstrates a strong desire to incorporate them into their maintenance operations.
We have already begun some initial marketing in Japan, with one $120,000 system installed there in 2011. We have established our first distributor in Tokyo who is actively marketing our products and was quite close to closing their first sales when the devastating earthquake struck, effectively tabling any anticipated sales indefinitely. While we expect sales to be stalled for the near term, we have high expectations as Japan begins to recover and rebuild.”
The Asia-Pacific Region is a Potential Market for Spika Welding
“While great opportunities for growth exist domestically for Spika, markets in numerous foreign countries such as Japan, South Korea, China, Brazil, Colombia, India, Russia, Israel, and others hold great potential for our company as well.
"Initial estimates indicate our small company could realize annual sales exceeding $1 to $1.5 million from each of those listed; considerably more in some, just from the aviation market. If we were to pursue sales into other industries, such as mining, manufacturing, and transportation, as well as oil and gas – and those numbers could increase considerably.
“It is evident that our company could grow significantly if we were to successfully develop these markets. Any reductions in restrictions and import/export duties to these countries will make our products more competitive and justifiable, translating into more opportunities for growth of our company and jobs for our community.”
USTR is working hard this week to create new opportunities for U.S. exporters like Spika Welding in the Asia-Pacific Region. Be sure to follow our progress here and check back for another CEO discussion.