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Tire Repair Equipment Distributor Steps into Overseas Markets with Help from SBA Counseling and Training Assistance
Alfonso Fernández left his beloved Spain at the age of 18. It was a time of dictatorship in his home country, and the young man was in search of freedom and a better quality of life.
He joined his uncle, who had moved to Puerto Rico not long before, and began working at his company specializing in maintenance and repair systems for tires. In 1973, Alfonso established A.F. Rema in Bayamón, Puerto Rico taking over his uncle’s business and working mostly out of the trunk of his car. In time he met Annabella Debs, a young woman whose family had also left their homeland –Cuba—in search of brighter tomorrows. The couple married and together continued building the company.
A.F. Rema, with nearly 40 years of market experience offers 4,000 products for different industry sectors, among them materials to repair tires, rubber products, machinery, tools, alignment products, and lubricants for cleaning and shine, to mention a few. Also, the company offers certified training programs for their suppliers to operate the machinery and equipment it distributes. Its customers include tire shops, alignment centers, retailers and wholesalers of automotive products, and tire repair plants.
Since its beginnings, A.F. Rema has expanded its operations by adding an extensive product offering to meet the needs of its customers, which average at about 500 per month but can go as high 1,100 during the same time-frame. Nevertheless, while the company has maintained a solid position in the market, it has faced its share of challenges, the first being Hurricane Georges in 1998.
“We had severe water damage and lost a lot of inventory,” Alfonso says. “We had no electricity. Thanks a disaster loan from the U.S. Small Business Administration we never stopped working and kept our employees on payroll.”
The SBA’s Disaster Assistance Program is the primary federal vehicle for funding long-range recovery for homeowners, renters, businesses of all sizes and private, non-profit organizations to repair or replace real estate, personal property, machinery & equipment, inventory and business assets that have been damaged or destroyed in a declared disaster. The SBA makes physical disaster loans of up to $2 million to qualified businesses or most private nonprofit organizations, for the repair or replacement of real property, machinery, equipment, fixtures, inventory, and leasehold improvements. Also, the SBA can provide up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred.
“The loan helped us at a moment when we needed it most,” says the businessman.
But the aftermath of Hurricane Georges isn’t the only challenge A.F. Rema has faced. The local economic downturn followed by decreasing construction activity –a big part of the company’s livelihood—has adversely impacted its cash flow, leading A.F. Rema to think outside the box or, in this case, step into other markets.
“We’d begun exporting some time ago, bit by bit, getting a feel for it,” Alfonso says. “In the 90s we entered a joint venture with a company in Trinidad & Tobago and within three months we were manufacturing there. Unfortunately the company closed several years ago.”
Looking to reinforce their overseas strategy, company Account Director and International Trade Manager Javier Torrens traveled to China in 2008.
“I visited several manufacturing plants and saw the great potential to purchase and export,” says Javier, who also happens to be Alfonso's son-in-law. “The local market had been slowly tightening and we knew we had to look overseas.”
Last year, Javier received an invitation to attend an exporting seminar hosted by the International Trade Center of the Puerto Rico Small Business & Technology Development Center. The Puerto Rico SBTDC is one of nearly 1,000 small business development centers throughout the nation. Administered on the island by the Inter American University of Puerto Rico under a cooperative agreement with the SBA, the Puerto Rico SBTDC provides training, individual counseling and technical assistance to aspiring and existing entrepreneurs.
“I attended the seminar and met with an International Trade Specialist,” Javier says. “We immediately began a business relationship and he really helped us with our overseas business plan and strategies.”
Thanks to that International Trade assistance, A.F. Rema was able to strengthen its overseas efforts through market research and the development of international marketing strategies. As a result, the company has grown its customer base, increasing export sales by 29 percent with clients in Ecuador, Honduras, Anguilla, and Santo Domingo.
“My current goal in the current economic situation is to stay afloat,” Alfonso declares. “Exporting has definitely helped us do just that, and we have been able to keep our employees, many of which have been with us for 30 years.”
A.F. Rema counts with nearly 20 employees, some of which began working at the company when they were high-school students. Alfonso is proud of their loyalty and provides sales commissions and incentives to all.
“I’ve had great satisfactions as a businessman throughout the years --Alfonso says-- one of them being to continue employing the people who have been by my side through the ups and downs; to provide them with a salary so that they can support their families.”