Finding an export niche market was Glenn Kim's goal when he launched a program to expand his five-year-old Fontana, CA, company, U.S. Resource Recycling Inc., into foreign markets. U.S. Resource Recycling purchases materials such as paper products, which are then recycled and sold as exports in South Korea, Japan, Taiwan and China—some of the company's primary markets.
The niche identified by U.S. Resource Recycling President Glenn Kim was the difference in domestic and foreign prices for products sold by his company. For example, Glenn found that the primary users of waste paper in foreign markets were willing to pay a premium for the product compared with customers in U.S. markets.
Kim enhanced this strategy by selling directly to the major users of specific products in the overseas markets. He found that often subsidiary buyers and distributors pass added costs on to the end-user. Kim now markets directly to the buyer, so that the buyer avoids pass-along costs incurred by several steps of middlemen, and Kim can sell the product at a fair price to earn income for his business.
A domino effect took place, and the higher fees Kim collected allowed him to pay higher prices for raw materials purchased in the U.S. and build a sufficient inventory to appeal to the overseas buyer seeking to purchase in greater volume. As part of his marketing efforts, Kim purchases a higher-quality waste paper and employs a sorting process to offer "best quality" paper. In addition, a quality-control sticker is placed on shipments to assure customers that quality product has been received. Kim also invites representatives from customer firms to visit his plant when they are in the U.S. to tour the facility and see the quality of operations.
Kim received an SBA-guaranteed loan in the form of an Export Working Capital Loan in excess of $750,000 to fuel business expansion. The loan provided funds that allowed Kim to add crushing and compression equipment and to aid cash flow in the purchase of materials. Kim says he does not know how he could have managed growth without the assistance of the SBA and his loans.
Kim's success has resulted in his willingness to share his knowledge of foreign markets and exporting. In 1997, he made presentations at a number of joint USEAC and SCORE seminars, as well as at seminars for local banks. He is currently in China meeting potential brokers and buyers for recycled materials.
SCORE Mentor Robert Breunig assisted Kim with developing and evaluating international trade plans and developing greater expertise in the recycling of secondary fiber. Where exporting involves many rules and regulations, for Kim it also involves quality of materials and processing.
Together Breunig, Kim and Joseph Sachs, of the U.S. Export Assistance Center (USEAC), compiled information and guidelines to help Kim fine-tune his production and marketing strategies. Sachs is the director of the USEAC and Breunig is the manager of SCORE mentoring held at the USEAC in Long Beach, CA. Kim also credits SCORE, the USEAC and the Nara Bank in Los Angeles with helping him build his company.
Glenn says, “SCORE as a public service program of volunteers must be thought of as an American invention and institution. I do not know of any other country that has such a network of business executives voluntarily supporting small business. I thank SCORE for being here to help my business.”