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 country

where it is especially easy to do business, Fleming does not hesitate.

"Yes, yes. Hong Kong. It’s a semi-autonomous territory of China

now," he says of the former British colony, "but that hasn’t

changed the way business is done. The playing field is absolutely

level." Establishing a mail drop company could not be easier,

he says, and there is no way for anyone to know the company doesn’t

have a substantial presence in Hong Kong.

Beware of enterprising Chinese factory owners. A common

reason to turn to a Chinese manufacturer is to take advantage of that

country’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 factory

owner knows an entrepreneur has a market for his product, and just

wants to save money on its manufacture, it is not unusual for him

to try to muscle in on the market himself. This is done by getting

ahold of manufacturing drawings, making the same — or a very

similar

— product, setting up a U.S. sales office, and selling the product

to the U.S. client’s customers for a lower price.

Fleming says this is a very common practice. "It doesn’t have

to be something scientific or technical," he says. "It can

be anything." In two recent cases, he represented a U.S. medical

device company, and a company that makes pipe flanges. In each case,

a Chinese factory to which they had outsourced manufacturing had

copied

their product and was trying to sell it to their customers.

The best way to protect against this abuse, he says, is to have the

Chinese factory owner sign specific agreements that clearly outline

ownership of absolutely everything involved in the transaction.

Proceed carefully with joint ventures. Fleming believes

many Chinese businessmen are significantly behind their U.S.

counterparts

in accepting the concept of trademark, copyright, and intellectual

property rights. "They’ll sign anything," he says, "but

they won’t look at it." This being the case, he says it is a

mistake

to include assets or technology in a joint venture agreement.

"Grant

a license to use," he says, "or in China you risk losing

ownership

rights."

It’s who you know. Systems of distribution are different

in many countries in the Pacific Rim. As an example, Fleming says,

in this country drugs are marketed to hospitals and doctors, and are

issued to consumers by prescription. This makes it easy for

pharmaceuticals

to track consumption of their products. In China, there are no

prescriptions,

and doctors dispense drugs directly. Having a sales force that knows

how to market and track sales in that environment can be important.

In each industry, there are local people who know the system and can

help U.S. businessmen. Finding them can be an important ingredient

in success. Over time, the Wong-Fleming firm has gotten into what

Fleming terms the "non-traditional" business of finding such

individuals for its clients.

Have employees sign a no-bribe agreement. The U.S. Foreign

Corrupt Practices Act forbids Americans from offering bribes to obtain

overseas business, or to facilitate that business. Most U.S.

businessmen

don’t set out to bribe their way into a country, Fleming says, but

can easily be trapped by subtleties. "We have to give so-and-so

a 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 have

to 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 is

available

— free — on his website, www.wongfleming.com. Click

Publications.

It’s the second listing — International Distributor Agreement.

Fleming, setting out to find a use for the French he studied

in college, ended up with a career in Asian/American law and business

instead. 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 my

dinner."

At one such happy hour, he overheard a group speaking French, and

joined it. It turned out that they were diplomats from the nearby

Moroccan Embassy. He stuck up friendships with the Moroccans, and

stayed in touch.

After he moved to New Jersey, one of the Moroccans called him. A

friend

of his needed a New Jersey lawyer in a divorce case where the Moroccan

wife wanted to take her child back to her homeland. "Don’t abduct,

get an agreement," was his advice. The wife did so, and then

promptly

took her child back to Morocco. The husband changed his mind the next

day, and filed to have the child returned. A trial court ruled in

the father’s favor, but the ruling was overturned by the Appellate

Court. The decision was recorded, and other bi-national divorcing

parents read it, and called on him for help in similar cases. So,

while Wong-Fleming doesn’t do matrimonial law, the firm does handle

that part of it that has to do with international child custody.

Proving,

perhaps, that no education is never wasted.

Top Of Page
Website Review: Business in Asia

Dan Fleming says his firm knew, or anyway guessed, that

it 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 a

resource

for clients. Designed by a Villanova student, the site is full of

information for any business thinking about establishing a presence

in Asia. It is also a great find for anyone who is planning to visit

Asia, or is just interested in learning more about that part of the

world.

Under "Doing Business in Asia," the site has sections on

China,

Taiwan, and Hong Kong. China is where Fleming’s firm finds most of

its work, and the section devoted to that country is the most

comprehensive,

offering sections on background, economy, foreign investments, foreign

trade, settlement of disputes, and political systems. The settlement

of disputes section leads visitors through an easy-to-follow

description

of how to take a dispute to arbitration in that country. It talks

about jurisdiction, how to apply for arbitration, fees, how the

process

works, and how to collect an award.

A little more sketchy, the sections on Hong Kong and Taiwan include

historical 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 of

all kinds on China, Hong Kong, Indonesia, Japan, Korea, Malaysia,

the Philippines, Singapore, and Taiwan. International and U.S.

websites

with information on the Pacific Rim are here too. There are 51 links

for China alone. For the businessman, there is China Economic Window,

Asia Business Connection, SinoSource, Chinese Patent Office, China

Research Corp, and more. Among the links of interest to travelers,

students, and the curious are China Central Television, Harvard China

Review, China Travel Net, China Internet Directory, and China Window.

Worth a bookmark, the Wong-Fleming website is a good place to research

business issues in the Pacific Rim, or to plan a trip to the Great

Wall.

— Kathleen McGinn Spring

Top Of Page
Investment Club Rethinks Portfolio

A few years back, it was standing room only at Princeton

Investment Club’s meetings. The room at the West Windsor library where

the group meets was routinely lined with prospective new members,

along with individuals looking in to see how they could start their

own investment clubs. Even in the most foul weather, intense interest

in learning how to profit from the bull stock market drew large

crowds,

making the Princeton Investment Club an exciting place to be. The

club, one of the best-organized investment clubs in the area, is still

going strong, but some of the fizz has evaporated.

"This is a time when people have a great deal of

consternation,"

says David Smith, who has been president of the club for four

years. Now at 25 members, the club is below ideal strength, and would

like 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 thought

to be practically clairvoyant just a year ago, the club "has lost

value in the last year," Smith says.

"We’re trying to determine if we are caught in the old economy/new

economy paradigm," he says. His club, like most investment clubs,

follows the principles of the National Association of Investors

Corporation

(NAIC). That organization, which has a website at

www.better-investing.org,

urges members to carefully research companies, looking for those whose

history and financials point to above average growth, and below

average

price for that growth. The goal, Smith explains, is to find companies

with relatively low price to earnings ratios that will return a solid

15 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. It

was 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 to

get on it.’ Now it is double what it was. Was I stupid?" This

pattern repeated over and over as the spread between price and

earnings

got wider and wider, and the stocks kept going up — a lot. At

some point, Smith says, nearly everyone agreed that, yes, it was

stupid

not to get in on these meteoric stocks.

"It leaves you in a bit of a quandary," Smith says of the

decision whether to accept that a new economy has arrived, and the

laws 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 stocks

fall to ground, the club is "going over each stock and

reevaluating

it," says Smith. "Do we want to hold or sell?"

The sector reports and other educational presentations, usually

prepared

by one member each month, have been suspended. "This month, and

for the next two months, we are evaluating our stocks," says

Smith.

The club is still buying, and for the moment its choices are running

to 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 it

is under $50. "The purpose of the club is educational," Smith

says. "Anyone who does any major investing does it outside of

the club." The club does operate with real money, but, says Smith,

not enough so that a dip in its portfolio hurts anyone too much.

"If

we happen to make a dumb decision," he says, "we’re not losing

too much."

Anyone who would like to join is invited to attend a meeting or two

to see how the club works. The club asks for prospective members’

resumes and interviews them before voting on whether to accept their

applications. Requirements are not too stringent, though. "We’re

looking for people who participate, but are not disruptive," says

Smith. Participation is important. The whole idea of the club is

learning

about the financial markets, industry sectors, individual companies,

and investment principles. And members teach one another. "We

don’t just want someone who puts his money in, and hopes to get

lucky,"

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 degree

from the University of California at Berkeley (Class of 1968) and

a masters of science from M.I.T. He designs the equipment that makes

active pharmaceutical products. Now an employee of the Washington

Group in Philadelphia, he is about to start a job with Burns and Roe

in 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? Smith

laughs as he answers: "They all have some stock. Some have lost

a bit more than others."

Top Of Page
State’s Fast 50: 12 from Central NJ

Central New Jersey companies represented more than 20

percent of the statewide Deloitte & Touche Fast 50 list this year.

The national accounting firm ranked companies by percentage of revenue

growth over the last five years. The average five-year revenue growth

of the firms on this list was $77.4 million, $16 million more than

the winners last year.

For any firm trying to write a business plan, this list serves as

a good thumbnail version of Princeton’s business community. It could

be used as justification for moving here, because the companies on

this list well represent Princeton area business types. All are in

high tech areas such as Biotech R&D, Fiberoptic/Electronic R&D,

Telecommunications,

and Software Development. The Princeton area has lots of

Pharmaceutical

Service companies, and the two that made the list — Simstar and

Newton Interactive — could be listed in the Multimedia category

as well.

To be counted on this list, it doesn’t matter whether the firm is

bleeding red ink. The important number: How much revenue? Perhaps

that’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, given

to companies younger than five years, and who therefore have no

five-year

record.

Pharmaceutical Services

SimStar Internet Solutions, 202 Carnegie Center,

Princeton 08540. David Reim, president. 609-378-0100; fax,

609-378-0220.

Home page: www.simstar.com

No. 14. Strategy, development, and servicing of

E-business solutions for the pharmaceutical and healthcare industries.

(Also often listed under the category Multimedia). $9,351,024 revenues

last year, 1,184 percent growth.

Newton Interactive, 2425 Pennington Road, Pennington

08534. Debra Newton, president. 609-818-0025; fax, 609-818-0045. Home

page: www.newtoninteractive.com

No. 21. Digital media for healthcare and pharmaceutical

industries, web-based solutions — web-based training, websites,

intranets, extranets, and CD-ROMs.

Multimedia

Princeton Video Image Inc. (PVI), 15 Princess

Road, Lawrenceville 08648. Dennis P. Wilkinson, president and CEO.

609-912-9400; fax, 609-912-0044. Home page: www.pvimage.com

No. 50. Development, manufacturing, and sales of

computer hardware and software for video processing for television

advertising production.

Biotech R&D

Medarex (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.com

No. 16. Biopharmaceutical firm doing therapeutic

product manufacturing, particularly human and monoclonal antibodies.

Integra LifeSciences Corporation (IART), 105

Morgan Lane, Box 688, Plainsboro 08536. Stuart M. Essig, CEO.

609-275-0500;

fax, 609-799-3297. Home page: www.integra-ls.com

No. 28. Tissue and organ replacements, including

artificial skin, cartilage, and nerve conduits.

Fiberoptic and Electronic R&D

Anacom Systems Corp., 1 Possum Town Road, Piscataway

08854. Henry Wojtunik, president. 732-564-9000; fax, 732-564-1990.

Home page: www.anacomsystems.com

No. 27. Design, development, manufacture of fiber-optic

communications equipment.

Discovery Semiconductors Inc., 186

Princeton-Hightstown

Road, Building 3-A, Princeton Junction 08550. Abhay Joshi, owner &

CEO. 609-275-0011; fax, 609-275-4848. Home page: www.chipsat.com

No 30. Design of custom semiconductor chips for

NASA and U.S. Air Force, optical photoreceivers for

telecommunications.

PD/LD Inc. (Photo Diode-Laser Diode), 30

Pennington-Hopewell

Road, Hopewell 08525. Vladimir Ban, president. 609-564-7900; fax,

609-564-7900. Home page: www.pd-ld.com

No 32. Fiber coupling and packaging of fiber optic

devices.

Software Developers.

NovaSoft Information Technology Corp., 505 Lawrence

Square Boulevard South, Lawrenceville 08648. Neil Bhaskar, CEO.

609-588-5500;

fax, 609-588-5577. Home page: www.novasoftinfo.com

No. 9. E-commerce, migration and outsourcing

applications,

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.com

No. 36. An IT consulting firm for Euro, E-commerce,

maintenance outsourcing, consulting, and enterprise resource planning.

Telecommunications

ITXC 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.com

Rising Star. for the second year. International

Internet 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.com

No. 49. National single-source facilities-based

communications services to the residential market — regional

Internet

service provider, local and long distance phone, and cable television.


Previous Story Next Story


Corrections or additions?


This page is published by PrincetonInfo.com

— the web site for U.S. 1 Newspaper in Princeton, New Jersey.

Facebook Comments