Website Review: Business in Asia
Investment Club Rethinks Portfolio
State’s Fast 50: 12 from Central NJ
Corrections or additions?
These articles by Kathleen McGinn Spring were prepared for the
August 29, 2001 edition of U.S. Newspaper. All rights reserved.
Chamber Fair: Doing Business in the Pacific Rim
It can be easier to establish a business in the Pacific
Rim than it is to do so in the Route 1 Corridor — or much more
difficult. Dan Fleming talks about opportunities and pitfalls when
he addresses the Princeton Chamber’s annual trade fair on Thursday,
August 30, at 10 a.m. at the Doral Forrestal. Call 609-520-1776.
Fleming is a founding partner of Wong Fleming, a law firm with offices
at 821 Alexander Road, and has a specialty in representing mid-sized
companies doing business in the Pacific Rim, and particularly in
China.
The firm also works for Pacific Rim companies and for law firms doing
business in the United States. Fleming’s path to this specialty was
one of serendipity.
Fleming graduated from Villanova in 1981 with a degree in French.
“I wanted to go into the Peace Corps,” he says. He had thought
proficiency in a foreign language would make him valuable to the
organization,
but soon discovered that a background in a practical skill, like
engineering,
was more in demand. Next he considered a career with the United
Nations
as a translator. “You have to translate simultaneously, without
mistakes,” he says of that organization’s requirements. Not quite
up to that level, he bowed to his parents’ will cheerfully enough
and obtained a J.D. from Catholic University, where he discovered
he enjoyed the study of law very much indeed.
After doing criminal defense work in Washington, D.C., and working
for several New Jersey law firms, he was thinking of going out on
his own. Attending a seminar on discrimination against Asians, he
asked the speaker about an incidence of what he believed to be
discrimination
against an Asian client of his. “Call Linda Wong,” the speaker
advised.
At that time Wong was assistant director of civil rights in the New
Jersey attorney general’s office. During their discussion of Fleming’s
client’s ill treatment at the hands of a multinational bank, he
mentioned
that he was thinking of quitting his job. “It was a little
strange,”
he recounts. “I hadn’t even told anyone at the firm, and here
I was telling a stranger.”
Wong replied “`Me too,’” and the two began to meet to discuss
their future. They soon learned they shared an observation: New Jersey
was becoming more and more international, and no law firm was serving
mid-sized companies doing business in the Pacific Rim.
“The big international firms will always have representation,”
Fleming says. But companies he defines as middle market, those with
sales of between $2 million and $100 million, were on their own.
Formed
in 1994 to serve that market, Wong-Fleming is now up to nine
attorneys,
and about to hire number 10. The firm handles litigation, and also
does deals, helping companies establish a presence in Asia. Here is
some of Fleming’s advice on doing business in the Pacific Rim.
Try Hong Kong. Asked if there is one Pacific Rim countrywhere it is especially easy to do business, Fleming does not hesitate.”Yes, yes. Hong Kong. It’s a semi-autonomous territory of Chinanow,” he says of the former British colony, “but that hasn’tchanged the way business is done. The playing field is absolutelylevel.” Establishing a mail drop company could not be easier,he says, and there is no way for anyone to know the company doesn’thave a substantial presence in Hong Kong.Beware of enterprising Chinese factory owners. A commonreason to turn to a Chinese manufacturer is to take advantage of thatcountry’s cheap labor, Fleming says. What often happens, however,is that the factory owner ends up taking advantage of his U.S.customer.”The Chinese aren’t stupid,” Fleming says. If the factoryowner knows an entrepreneur has a market for his product, and justwants to save money on its manufacture, it is not unusual for himto try to muscle in on the market himself. This is done by gettingahold of manufacturing drawings, making the same — or a verysimilar— product, setting up a U.S. sales office, and selling the productto the U.S. client’s customers for a lower price.Fleming says this is a very common practice. “It doesn’t haveto be something scientific or technical,” he says. “It canbe anything.” In two recent cases, he represented a U.S. medicaldevice company, and a company that makes pipe flanges. In each case,a Chinese factory to which they had outsourced manufacturing hadcopiedtheir product and was trying to sell it to their customers.The best way to protect against this abuse, he says, is to have theChinese factory owner sign specific agreements that clearly outlineownership of absolutely everything involved in the transaction.Proceed carefully with joint ventures. Fleming believesmany Chinese businessmen are significantly behind their U.S.counterpartsin accepting the concept of trademark, copyright, and intellectualproperty rights. “They’ll sign anything,” he says, “butthey won’t look at it.” This being the case, he says it is amistaketo include assets or technology in a joint venture agreement.”Granta license to use,” he says, “or in China you risk losingownershiprights.”It’s who you know. Systems of distribution are differentin many countries in the Pacific Rim. As an example, Fleming says,in this country drugs are marketed to hospitals and doctors, and areissued to consumers by prescription. This makes it easy forpharmaceuticalsto track consumption of their products. In China, there are noprescriptions,and doctors dispense drugs directly. Having a sales force that knowshow to market and track sales in that environment can be important.In each industry, there are local people who know the system and canhelp U.S. businessmen. Finding them can be an important ingredientin success. Over time, the Wong-Fleming firm has gotten into whatFleming terms the “non-traditional” business of finding suchindividuals for its clients.Have employees sign a no-bribe agreement. The U.S. ForeignCorrupt Practices Act forbids Americans from offering bribes to obtainoverseas business, or to facilitate that business. Most U.S.businessmendon’t set out to bribe their way into a country, Fleming says, butcan easily be trapped by subtleties. “We have to give so-and-soa gift, or we have to give so-and-so an interest in the company,”is how bribes often begin, he says. Not only do business owners haveto resist, but they have to make sure their employees do so, too.”You’ve got to make sure they sign an agreement,” he says.”You don’t want to be a test case.” Such an agreement isavailable— free — on his website, www.wongfleming.com. ClickPublications.It’s the second listing — International Distributor Agreement.Fleming, setting out to find a use for the French he studiedin college, ended up with a career in Asian/American law and businessinstead. Has French been a part of it? Well, yes, as a matter of fact,it has, Fleming says. And again, serendipity was at work.”I was on my own, doing criminal defense in D.C,” he says.”I was so broke that I went to happy hours, making that mydinner.”At one such happy hour, he overheard a group speaking French, andjoined it. It turned out that they were diplomats from the nearbyMoroccan Embassy. He stuck up friendships with the Moroccans, andstayed in touch.After he moved to New Jersey, one of the Moroccans called him. Afriendof his needed a New Jersey lawyer in a divorce case where the Moroccanwife wanted to take her child back to her homeland. “Don’t abduct,get an agreement,” was his advice. The wife did so, and thenpromptlytook her child back to Morocco. The husband changed his mind the nextday, and filed to have the child returned. A trial court ruled inthe father’s favor, but the ruling was overturned by the AppellateCourt. The decision was recorded, and other bi-national divorcingparents read it, and called on him for help in similar cases. So,while Wong-Fleming doesn’t do matrimonial law, the firm does handlethat part of it that has to do with international child custody.Proving,perhaps, that no education is never wasted.Top Of PageWebsite Review: Business in AsiaDan Fleming says his firm knew, or anyway guessed, thatit would not get a lot of business from its website(www.wongfleming.com).Instead of making it a sales tool, the firm decided to make it aresourcefor clients. Designed by a Villanova student, the site is full ofinformation for any business thinking about establishing a presencein Asia. It is also a great find for anyone who is planning to visitAsia, or is just interested in learning more about that part of theworld.Under “Doing Business in Asia,” the site has sections onChina,Taiwan, and Hong Kong. China is where Fleming’s firm finds most ofits work, and the section devoted to that country is the mostcomprehensive,offering sections on background, economy, foreign investments, foreigntrade, settlement of disputes, and political systems. The settlementof disputes section leads visitors through an easy-to-followdescriptionof how to take a dispute to arbitration in that country. It talksabout jurisdiction, how to apply for arbitration, fees, how theprocessworks, and how to collect an award.A little more sketchy, the sections on Hong Kong and Taiwan includehistorical background, information on those countries’ legal systems,governments, and business culture. Fleming says more information —and more countries — will be added soon.The website included an impressive list of links to information ofall kinds on China, Hong Kong, Indonesia, Japan, Korea, Malaysia,the Philippines, Singapore, and Taiwan. International and U.S.websiteswith information on the Pacific Rim are here too. There are 51 linksfor China alone. For the businessman, there is China Economic Window,Asia Business Connection, SinoSource, Chinese Patent Office, ChinaResearch Corp, and more. Among the links of interest to travelers,students, and the curious are China Central Television, Harvard ChinaReview, China Travel Net, China Internet Directory, and China Window.Worth a bookmark, the Wong-Fleming website is a good place to researchbusiness issues in the Pacific Rim, or to plan a trip to the GreatWall.— Kathleen McGinn SpringTop Of PageInvestment Club Rethinks PortfolioA few years back, it was standing room only at PrincetonInvestment Club’s meetings. The room at the West Windsor library wherethe group meets was routinely lined with prospective new members,along with individuals looking in to see how they could start theirown investment clubs. Even in the most foul weather, intense interestin learning how to profit from the bull stock market drew largecrowds,making the Princeton Investment Club an exciting place to be. Theclub, one of the best-organized investment clubs in the area, is stillgoing strong, but some of the fizz has evaporated.”This is a time when people have a great deal ofconsternation,”says David Smith, who has been president of the club for fouryears. Now at 25 members, the club is below ideal strength, and wouldlike to recruit five more. It next meets on Tuesday, September 4,at 7:30 p.m. at the West Windsor library.Along with a great many individuals, and even some analysts thoughtto be practically clairvoyant just a year ago, the club “has lostvalue in the last year,” Smith says.”We’re trying to determine if we are caught in the old economy/neweconomy paradigm,” he says. His club, like most investment clubs,follows the principles of the National Association of InvestorsCorporation(NAIC). That organization, which has a website atwww.better-investing.org,urges members to carefully research companies, looking for those whosehistory and financials point to above average growth, and belowaverageprice for that growth. The goal, Smith explains, is to find companieswith relatively low price to earnings ratios that will return a solid15 percent a year.At some point during the period of stock euphoria just passed,however,the club gave in to temptation and went for a few high fliers. Itwas hard not to. The thinking, Smith says, went something like this:”Six months ago you said `It has a high P/E; I’m not going toget on it.’ Now it is double what it was. Was I stupid?” Thispattern repeated over and over as the spread between price andearningsgot wider and wider, and the stocks kept going up — a lot. Atsome point, Smith says, nearly everyone agreed that, yes, it wasstupidnot to get in on these meteoric stocks.”It leaves you in a bit of a quandary,” Smith says of thedecision whether to accept that a new economy has arrived, and thelaws of gravity have been suspended, or to stick with the old rules.Having done a little of each, and seen at least a few of its 30 stocksfall to ground, the club is “going over each stock andreevaluatingit,” says Smith. “Do we want to hold or sell?”The sector reports and other educational presentations, usuallypreparedby one member each month, have been suspended. “This month, andfor the next two months, we are evaluating our stocks,” saysSmith.The club is still buying, and for the moment its choices are runningto solid, old economy businesses like oil companies.The Princeton Investment Club does not exist to make its members rich.Members are required to make a minimum monthly investment, but itis under $50. “The purpose of the club is educational,” Smithsays. “Anyone who does any major investing does it outside ofthe club.” The club does operate with real money, but, says Smith,not enough so that a dip in its portfolio hurts anyone too much.”Ifwe happen to make a dumb decision,” he says, “we’re not losingtoo much.”Anyone who would like to join is invited to attend a meeting or twoto see how the club works. The club asks for prospective members’resumes and interviews them before voting on whether to accept theirapplications. Requirements are not too stringent, though. “We’relooking for people who participate, but are not disruptive,” saysSmith. Participation is important. The whole idea of the club islearningabout the financial markets, industry sectors, individual companies,and investment principles. And members teach one another. “Wedon’t just want someone who puts his money in, and hopes to getlucky,”says Smith.Smith, a Lawrenceville resident, joined the club because his wife,Cecilia Mann Smith, a psychotherapist, was a longtime member,and was enthusiastic about the club. He holds an undergraduate degreefrom the University of California at Berkeley (Class of 1968) anda masters of science from M.I.T. He designs the equipment that makesactive pharmaceutical products. Now an employee of the WashingtonGroup in Philadelphia, he is about to start a job with Burns and Roein Mount Laurel.Between them Smith and his wife, both of whom were married before,have six grown children. And are any of the children investors? Smithlaughs as he answers: “They all have some stock. Some have losta bit more than others.”Top Of PageState’s Fast 50: 12 from Central NJCentral New Jersey companies represented more than 20percent of the statewide Deloitte & Touche Fast 50 list this year.The national accounting firm ranked companies by percentage of revenuegrowth over the last five years. The average five-year revenue growthof the firms on this list was $77.4 million, $16 million more thanthe winners last year.For any firm trying to write a business plan, this list serves asa good thumbnail version of Princeton’s business community. It couldbe used as justification for moving here, because the companies onthis list well represent Princeton area business types. All are inhigh tech areas such as Biotech R&D, Fiberoptic/Electronic R&D,Telecommunications,and Software Development. The Princeton area has lots ofPharmaceuticalService companies, and the two that made the list — Simstar andNewton Interactive — could be listed in the Multimedia categoryas well.To be counted on this list, it doesn’t matter whether the firm isbleeding red ink. The important number: How much revenue? Perhapsthat’s why RCN squeaked onto the Fast 50 list at Number 49.For the second year in a row ITXC got the Rising Star award, givento companies younger than five years, and who therefore have nofive-yearrecord.Pharmaceutical ServicesSimStar Internet Solutions, 202 Carnegie Center,Princeton 08540. David Reim, president. 609-378-0100; fax,609-378-0220.Home page: www.simstar.comNo. 14. Strategy, development, and servicing ofE-business solutions for the pharmaceutical and healthcare industries.(Also often listed under the category Multimedia). $9,351,024 revenueslast year, 1,184 percent growth.Newton Interactive, 2425 Pennington Road, Pennington08534. Debra Newton, president. 609-818-0025; fax, 609-818-0045. Homepage: www.newtoninteractive.comNo. 21. Digital media for healthcare and pharmaceuticalindustries, web-based solutions — web-based training, websites,intranets, extranets, and CD-ROMs.MultimediaPrinceton Video Image Inc. (PVI), 15 PrincessRoad, Lawrenceville 08648. Dennis P. Wilkinson, president and CEO.609-912-9400; fax, 609-912-0044. Home page: www.pvimage.comNo. 50. Development, manufacturing, and sales ofcomputer hardware and software for video processing for televisionadvertising production.Biotech R&DMedarex (MEDX), 707 State Road, Princeton Gateway,Suite 206, Princeton 08540. Donald L. Drakeman, president.609-430-2880;fax, 609-430-2850. Home page: www.medarex.comNo. 16. Biopharmaceutical firm doing therapeuticproduct manufacturing, particularly human and monoclonal antibodies.Integra LifeSciences Corporation (IART), 105Morgan Lane, Box 688, Plainsboro 08536. Stuart M. Essig, CEO.609-275-0500;fax, 609-799-3297. Home page: www.integra-ls.comNo. 28. Tissue and organ replacements, includingartificial skin, cartilage, and nerve conduits.Fiberoptic and Electronic R&DAnacom Systems Corp., 1 Possum Town Road, Piscataway08854. Henry Wojtunik, president. 732-564-9000; fax, 732-564-1990.Home page: www.anacomsystems.comNo. 27. Design, development, manufacture of fiber-opticcommunications equipment.Discovery Semiconductors Inc., 186Princeton-HightstownRoad, Building 3-A, Princeton Junction 08550. Abhay Joshi, owner &CEO. 609-275-0011; fax, 609-275-4848. Home page: www.chipsat.comNo 30. Design of custom semiconductor chips forNASA and U.S. Air Force, optical photoreceivers fortelecommunications.PD/LD Inc. (Photo Diode-Laser Diode), 30Pennington-HopewellRoad, Hopewell 08525. Vladimir Ban, president. 609-564-7900; fax,609-564-7900. Home page: www.pd-ld.comNo 32. Fiber coupling and packaging of fiber opticdevices.Software Developers.NovaSoft Information Technology Corp., 505 LawrenceSquare Boulevard South, Lawrenceville 08648. Neil Bhaskar, CEO.609-588-5500;fax, 609-588-5577. Home page: www.novasoftinfo.comNo. 9. E-commerce, migration and outsourcingapplications,and training with offices worldwide.HexaWare Technologies Inc., 5 Independence Way,Second Floor, Princeton 08540. Avi Lele, president. 609-951-9195;fax, 609-951-9638. Home page: www.hexaware.comNo. 36. An IT consulting firm for Euro, E-commerce,maintenance outsourcing, consulting, and enterprise resource planning.TelecommunicationsITXC Corp. (Internet Telephony Exchange Carrier)(ITXC), 750 College Road East, Princeton 08540. Tom Evslin, CEO.609-419-1500; fax, 609-419-1511. Home page: www.itxc.comRising Star. for the second year. InternationalInternet telephony services carriers — wholesale call routing,Q&S and settlement.RCN Corporation (RCNC), 105 Carnegie Center,Suite 300, Princeton 08540. David C. McCourt, chairman and CEO.609-734-3700;fax, 609-734-7551. Home page: www.rcn.comNo. 49. National single-source facilities-basedcommunications services to the residential market — regionalInternetservice provider, local and long distance phone, and cable television.Previous StoryNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
