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Natural-Born Entrepreneur Finds Niche in Food Distribution Industry
Puerto Rico Success Story: Mar y Tierra
Rafael Rodríguez-Toymil has been an entrepreneur all his life.
It should come as no surprise. His father –Rafael senior— opened a gun shop after working in the insurance industry for many years, and the young Rafael spent a great deal of time helping out in the business any way he could. One day, his dad gave him a couple of boxes filled with promotional key chains, and Rafael sold them to his friends and neighbors, getting his start in the business world.
After graduating high school at Colegio Maristas in 1991, Rafael attended Northeastern University in Boston, Mass. His classes were conducted quarterly and, as part of a cooperative education program, after his freshman year Rafael was expected to study for six months and work for the next six. Upon graduating in 1996 with a double major in Accounting and Management Information Systems, Rafael had already worked at accounting firms, supermarket chains and hotels.
While those experiences gave Rafael the hands-on knowledge and training he would need down the road, they also made him realize that he didn’t want to work for anyone else again, and back in Puerto Rico he began looking for ideas to start a business of his own.
A couple of years before Rafael graduated from Northeastern, his dad had sold the gun shop, and to keep himself busy was helping a friend’s son-in-law, who owned a slaughterhouse in Miami, import whole frozen pigs to Puerto Rico. The senior Rafael rented freezer space in the Bechara Industrial Sector in San Juan and began promoting the product.
It was while visiting his father one day that Rafael learned about a small meat and seafood shop across the way that was up for sale. In August 1996, at the age of 23, with $3,000 in savings, proceeds from selling his SUV and his father’s business contacts selling to him on credit, Rafael established Mar y Tierra.
A couple of days after its grand opening, Hurricane Hortense hit the island, leaving thousands of people without power. Mar y Tierra remained closed for a month and a half, and Rafael lost his entire inventory.
“After Hortense, half of my clients came back, but the other half didn’t,” Rafael says. “There were sales, but I wanted to sell more, so I began knocking on doors.”
A couple of those doors led to the Caribe Hilton hotel and Charthouse Restaurant, and Rafael began selling seafood to the first and Australian lobster to the latter. But as fate would have it, both clients ceased operations at the same time, and while Caribe Hilton would reopen after undergoing renovations, it was too far down the road. Rafael needed a plan.
“I decided to look for a niche market, and began buying whole frozen pigs from my father and selling it to lechoneras,” the entrepreneur says.
In 2000, space was becoming a little small for Rafael’s business, and he moved to a lot in Trujillo Alto that belonged to the father of a friend. They refurbished an abandoned two-bedroom house to share as office space, while Rafael also rented a couple of freight containers to use as freezers. By then, Rafael had already hired a delivery man. Mar y Tierra operated from that location for the next three years, at the end of which Rafael had hired two additional employees, bought two delivery trucks and had signed a distribution agreement with a slaughterhouse in Iowa. Business was growing and again the space became too small, prompting Rafael to buy a house located on a two-acre lot nearby and build a warehouse with loading docks.
Another three years later the company had doubled its size, and Rafael realized that he needed to move to an even bigger location to keep operations running smoothly.
“I bought a provisions company in El Comandante Industrial Sector in Carolina, which was in a rented building big enough to accommodate my needs at the time,” Rafael says. “I also rented an old lumberyard in Trujillo Alto where I am currently located, with an option to buy, and operated from the rented facilities in Carolina while construction was underway.”
The year was 2007. By then, Rafael had already hired 18 employees, among them salespeople, a warehouse manager and a sales manager. Also, the building he rented had enough space for 12 containers and had a small U.S. Department of Agriculture approved processing plant for meat, seafood cutting and packaging that allowed Mar y Tierra to create its own brand of meats and seafood called “Butcher’s Choice”.
It took two years for construction to be complete, and another six months for Rafael to get all the licenses and permits he needed, but finally in 2009 Mar y Tierra moved back to Trujillo Alto. In 2011, Rafael took out a loan with Banco Popular de Puerto Rico under the U.S. Small Business Administration’s 7(a) Loan Guaranty program, which provides financing for a variety of general business purposes, such as working capital, expansion or renovation of facilities, the purchase of machinery and equipment, and the purchase of land, among others.
With the loan proceeds, Rafael purchased the land on which he built Mar y Tierra’s facilities. But that same year was perhaps the most difficult the business has ever seen, since many restaurants began filing for bankruptcy or closing operations, leaving accounts unpaid. Rafael had to reinvent his marketing strategies once again, structure payment plans for his customers, and obtain an SBA-guaranteed line of credit.
Still, the challenges have not gotten the best of Rafael.
“With time, you learn not to be afraid,” he says. “Perhaps because I started in this business at such a young age, working seven days a week, I have learned to take things one step at a time. I have overcome the economy’s downturn, which is perhaps the most difficult thing to do in this industry.”
Mar y Tierra distributes and sells meat, seafood, ingredients to produce pork rind and blood sausage, and local products such as garlic, plantains, and purified water. Among its clients are restaurants, hotels, supermarkets, mom and pop stores, and lechoneras, in addition to a few new ones recently acquired in the Dominican Republic. With 30 employees and a steady growth in annual sales year after year, Mar y Tierra has served nearly 800 clients since operations began and currently has over 450 active accounts.
The company’s success proves quite an evolution for the little boy who sold key chains decades ago. When asked about his advice to other entrepreneurs, Rafael smiles and says “do not be afraid of taking the next step, you can accomplish anything you want.”
For more information on SBA programs and services, visit http://www.sba.gov/pr.
Small Business Owner Excels at Information Technology Infrastructure with Architectural Eye
Puerto Rico Success Story: CDS, Inc.
In 1992, Dionisio Ortiz --a young New Yorker of Puerto Rican descent-- arrived on the island to work at the Puerto Rico Medical Center as Assistant Director of Information. He had never stepped foot in the facilities, as the job interview had taken place over the phone.
“When I went to the Information Systems Department I noticed they had one of those old IBM Mainframes,” Dionisio says with a laugh. “I had only seen them in books.”
The hospital had an approved $2 million budget to update all information systems, including migration of trauma, industrial, emergency and radiology records, among others. Four years later, Johnson & Johnson executives took notice of the young man’s expertise and made him an offer he couldn’t resist. For the next five years, Dio --as his friends and family call him-- worked from home for the company as an International Information Technology Consultant for the Caribbean and Latin-American regions.
“The experience opened my eyes and I said to myself, ‘I can do this on my own’,” the entrepreneur says. “I then said to my wife, ‘all I need are studies in Business Administration’, and that encouraged me to go back to school.
Dio, who already had degrees in Architecture and Computer Sciences from the City College of New York, enrolled in the University of the Sacred Heart in Santurce and obtained additional credits in Business Administration. In October 2001, with the full support of his wife, he founded Corporate Development Solutions Inc., dedicated to the implementation of high-tech communications systems.
The company’s first test was several months prior to 9/11, when CDS was hired to renovate American Airlines’ analog network to a completely new digital wide area network, and to reinstall all electrical infrastructure and telecommunications transparent to day-to-day flight operations in Puerto Rico, St. Croix and St. Thomas. Later, the Caribbean division of Lloyd Electrical Company selected CDS as a subcontractor for the Department of Homeland Security during the implementation of new security system measures at Luis Muñoz Marín International Airport and at U.S. Virgin Islands airports.
“This jumpstarted us like you wouldn’t believe,” Dionisio says. “It was the trampoline that got us going. About 750 companies were hired nationwide to do the work. Only 11 made the deadline, and we were one of them.”
In 2005, CCLD Technologies & PS Splicing subcontracted CDS for Bellsouth, to support the outside telecommunications plant rebuilding efforts required after hurricane Katrina pummeled New Orleans, and once again hired CDS to rebuild Bellsouth’s telecommunications infrastructure in Florida after hurricane Wilma - the first time a Puerto Rican-based company was asked to mobilize state-side for this type of work.
Several years later, at a Government Contracting Matchmaking event the U.S. Small Business Administration’s Puerto Rico and Virgin Islands district office cosponsored with the Puerto Rico Professional College of Engineers and Land Surveyors, Dio learned all about the SBA’s 8(a) Business Development program, which provides eligible socially and economically disadvantaged firms with growth opportunities through federal contracts. Dio immediately began the application process, obtaining certification in 2009.
“After you’re accepted into the program, it really does open a lot of doors,” he says. “The 8(a) program was the vehicle for me to get in the game.”
Today, with more than 35 years of experience, Dio has raised the bar in the Caribbean region by providing highly sophisticated Information Technology infrastructure installation and solution services for such federal agencies as Department of Veterans Affairs, Department of Homeland Security, Transportation Security Administration, U.S. Army Corp of Engineers, U.S. Customs & Border Protection, U.S. Air National Guard and the Disaster Recovery Division of the U.S. Armed Forces.
The entrepreneur attributes great part of the company’s success to a very dedicated support staff among which he counts Senior Project Manager Mario Figueroa, Senior Account Executive Janice Luciano, Account Executive Edna Miranda, and Inspector Carmen Saráchaga.
“Without their contributions, we would not be where we are today; they are an integral part of our success story,” Dio declares.
Flexibility and careful understanding of customer needs have enabled the company to provide its services and expertise in various markets including the public sector, and in the fields of Communications, Hospitality, Construction, and Healthcare, as well as the Airline industry. With a growing reputation of excellence in workmanship and positive results, CDS has completed numerous projects not only in Puerto Rico, but also throughout the Caribbean at locations including St. Vincent’s, Grenada, Canounan Island, Mexico, St. Thomas and St. Croix.
“There have been times when we’ve had to say ‘thank-you, but not right now’ because we’ve had too much work,” says Dio. “We’re a little conservative that way. You shouldn’t bite off more than you can chew. Don’t Burn your bridges, so they’ll call you back.”
With 30 employees and annual sales of nearly $1.3 million, CDS has succeeded in establishing a serious presence in the Caribbean region as the number one provider that diversified companies can reach out to when in need of secure Information Technology systems.
“My greatest satisfaction is putting people to work and helping provide for their families,” the businessman concludes.
For more information on SBA programs and services, visit http://www.sba.gov/pr.
Former Pharmaceutical Rep Creates Jobs in Military Apparel Manufacturing Industry
Former Pharmaceutical Rep Creates Jobs in Military Apparel Manufacturing Industry
In 2006, pharmaceutical giant Schering-Plough closed its manufacturing facility in Manatí, Puerto Rico leaving hundreds of people unemployed, among them, Armando Semprit.
The plant closing was partly due to the 10-year phase-out of Section 936 of the Internal Revenue Code, which provided a tax credit against U.S. taxes imposed on income earned by a U.S. corporation on the island. Pharmaceutical companies originally came to Puerto Rico over 40 years ago to take advantage of Section 936, turning Puerto Rico into a worldwide pharmaceutical center that currently produces 16 of the top 20-selling drugs in the U.S.
Nevertheless, Schering was one of dozens of manufacturing plants that ceased operations in Puerto Rico over the last decade, and Semprit only one of thousands of individuals who lost their jobs. His six years of experience as a medical representative and his Master’s degree in Global Management overqualified him against countless of line employees looking for jobs amidst the worst recession this economy has ever seen.
But Semprit was well prepared to take a hit. At the age of 28 he enjoyed a good salary, and had put away quite a bit for a rainy day. In order to keep himself busy while another opportunity arose, Semprit applied for insurance and securities licenses and spent the next two years hitting the pavement looking for clients.
“Because of my savings, I only worked the field part-time,” Semprit says. “But within two years, most of those savings had depleted, and I started to feel unemployed.”
What helped Semprit put an end to his “unemployed” feeling was reading the newspaper. As he explains it, one of his strategies when seeking new clients was to read announcements companies were making about new products that were sure to reap great revenues.
“I would visit them and advise them on where to invest their earnings,” Semprit says.
It was while thumbing through the newspaper one day in March 2008 that Semprit came across and ad for a company that was selling machinery and equipment for people interested in federal contracting. This caught Semprit’s attention and he paid the company a visit simply to offer his services as an investment broker, and to see first-hand the company’s operations and the type of equipment it was selling. The company was Rebmar, Inc. dedicated to the manufacturing of military uniforms and accessories in Morovis, in the heart of Puerto Rico’s central mountainous region. All of its industrial sewing machines and equipment were for sale. Rebmar’s owner --based on the mainland-- was near retirement and looking to close operations on the island, since his children had no interest in running the company.
Reading the newspaper again the next morning, Semprit saw an article about a Business Matchmaking event the U.S. Small Business Administration’s Puerto Rico office was conducting later that week with the Puerto Rico Association of Engineers and Land Surveyors.
“I went to the event to meet people and network, and also to learn about the federal contracting process,” Semprit says. “I listened as presenters spoke about the great potential of the HUBZone program, of growth opportunities in Puerto Rico, and the federal government’s investment in contracting.”
Within a couple of weeks of attending the SBA’s Matchmaking event, Semprit had visited the Puerto Rico State Department to read up on Rebmar’s corporate certificates and financial statements, and later visited the company again, this time making an offer to purchase the machinery as an individual.
“I knew nothing about manufacturing,” Semprit admits. “But I had to either invest the money I had left in a profitable business or find myself another job quickly.”
It took about a week of negotiations, but Rebmar’s owner finally agreed on a selling price that was reasonable to Semprit. The young man was becoming an entrepreneur. He incorporated his new business as Noliar Inc., engaging in the manufacturing of apparel, bags, pouches, vests, and tent and gas mask accessories for military troops. He also obtained Rebmar’s list of clients, who let him know they needed someone to fulfill the contracts pending.
On April 4, 2008, Semprit began operations with five employees at Rebmar’s facilities, which were housed in a building of approximately 40,000 square feet owned by the Puerto Rico Industrial Development Company (PRIDCO). Soon after, Noliar completed the contracts that Rebmar had left pending, and also landed two subcontracts from a prime contractor that was manufacturing commercial products for the federal government.
Within a few months, however, PRIDCO informed Semprit that it needed the facilities for another company, and Semprit relocated his business to another PRIDCO-owned building in Morovis – this time 21,600 square feet big.
But a cash flow problem led Semprit to visit his bank to apply for a loan. It was then he learned of the U.S. Small Business Administration’s 7(a) Loan Guaranty program, which provides long-term financing to acquire equipment and machinery, inventory, fixtures and accessories, renovations, purchase land, build new buildings, purchase existing businesses, and for the repayment of debts. The SBA can guarantee up to 85 percent on loans up to $150,000 and up to 75 percent on loans higher than $150,000 up to $5 million.
Semprit attended an SBA orientation session and was referred to the Puerto Rico Small Business and Technology Development Center for training, counseling and technical assistance.
“Like a good student, I took the SBTDC course on how to start a small business and went to all my classes,” Semprit says. “Because of my college major, I had basic knowledge of how to prepare a business plan, but the SBTDC helped me polish it. I also learned how to do my bookkeeping, and although I hire an accountant to review the company’s books, I still do all the numbers myself.”
At that time Semprit ultimately didn’t get a loan, but he recently obtained an SBA-guaranteed line of credit from Banco Santander Puerto Rico that is helping him establish commercial credit experience. Noliar Inc. has invested in more sophisticated equipment to be more efficient, and has fulfilled contracts for the Defense Logistics Agency Troop Support, among others. In addition, the company is also working as a subcontractor for Propper International, in addition to having six other clients, and foresees closing the year 2012 with $1.5 million in revenues.
Noliar –who’s named after Semprit’s mother “Noli”—recently obtained certification under the SBA’s 8(a) Business Development program, which provides eligible socially and economically disadvantaged firms with growth opportunities through federal contracts.
Almost four years after that fateful day in March 2008, Semprit employs 28 people, a fact that brings optimism to a town like Morovis with an unemployment rate of 21 percent. Looking back at the road he’s taken and the challenges he’s faced as an entrepreneur, Semprit sees the glass as half-full.
“I’m still here,” Semprit declares. “I’m creating job opportunities for people who probably wouldn’t have had another option. I look forward to what’s to come.”
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