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Cosmetics Maker Is All Smiles as Sales Blossom in Overseas Markets

March 27, 2000|SCOTT DOGGETT and ANNETTE HADDAD | SPECIAL TO THE TIMES

About a decade ago, after picking up the pieces of the manufacturing business he created but saw go down the tubes after selling to an investment group, Sergio Quinones embarked on a strategy to rebuild cosmetics sales for his Cobe Chem Labs by turning his sights overseas.

By creating a plan to tap into foreign markets' desire for limited access to high-quality skin- and hair-care products, Quinones was able to quickly increase exports to places such as Nigeria, Vietnam and South Korea to almost a quarter of Cobe's $6.3 million in sales last year.

Cobe Chem Labs in Pico Rivera makes an array of shampoo and hair treatments, over-the-counter pharmaceuticals such as acne cream, perfumes, moisturizing lotions, suntan oil and aromatherapy potions. Cobe also specializes in "reverse engineering," reformulating existing products at customers' requests to determine their ingredients, then tweaking them just enough to create a unique product.

The typical customer comes with a small quantity of a product and asks Cobe to reverse engineer it, figure out what it's made of, and then reproduce a near-knockoff in a slightly modified form.

"Sometimes they'll say, 'I want it to have a different smell,' or 'I want it thick,' or 'I want to add aloe vera or whatever to it,' " Quinones said. Cobe then makes the new product in its laboratory, puts it in bottles or tubes with the customer's label and packages it for shipment.

But to augment overseas sales, Quinones stepped up attendance at foreign trade fairs and designed detailed company Web pages (http://cobechem.com). And he hired an export sales and marketing professional who had the company create separate lines of products designed for specific overseas markets, as well as its own line of Cobe-labeled products that are sold exclusively abroad.

"It would be cheaper for foreign customers to buy their locally made products, but many companies enjoy selling products from the United States," said Quinones, 64, a trained pharmacist who emigrated from Chile in 1962.

With about 60 employees working at its 65,000-square-foot Pico Rivera facility, Cobe has been able to stay nimble enough to cater to its foreign customers' needs. For instance, Asian customers generally prefer fragrance-free, lighter-weight shampoos and skin creams, while Latin American clients tend to ask for thicker, perfumey products.

"When we ship our products to the Far East, in most cases we have to remove the fragrance because the Chinese, Japanese and Korean people are very sensitive to fragrance," said Faustino Armenta, Cobe's export sales manager. "But when we ship to Latin America, usually it's fragrance-loaded" to satisfy consumer preference there.

"We design the product specifically for the marketplace," he said.

Armenta said Cobe gets a majority of its foreign business leads from the American Export Register, a list of exporting companies that is available online and overseas. Armenta says he receives 15 to 20 foreign inquiries a week from potential clients that see Cobe's ad in the register. He follows up by sending samples of 10 to 30 products of various facial moisturizers, cleansing creams, shampoos and body lotions. If the samples are to the customer's liking, a bulk order often follows.

Armenta has also set up a network of distributors overseas, which has boosted the company's brand and actually helped sales here at home.

"It's reverse marketing," Armenta explained. "By setting up distributors who multiply my efforts at marketing, people who travel to other countries are now seeing our product there and when they come here, they call asking about how they can get it."

With about 25% of total sales now coming from the export business, Quinones is forecasting that before long that figure could hit 40%.

Cobe now ships to Indonesia, South Korea, Thailand, Singapore, China and Mexico. It recently filled a $200,000 order from Vietnam and a $100,000 order from Malawi. It also has set up distributors in Brazil and is working on a special line of products to be sold there. It also has hired a distributor to oversee five African nations, including Ghana and Nigeria.

Cobe is betting that its export business will rise along with the rebound in the global economy.

"I just received a call from a past client in South Korea," Armenta said. "When I first came to Cobe, we had this gigantic Korean company that was going to [buy] container loads of product from us. And wouldn't you know it, the economy of South Korea went down the tubes, and so they declined.

"Now they are back . . . and we're working out their first order worth $50,000 to $60,000."

The Times is interested in hearing about your experiences as a business traveler and as someone doing business in the international marketplace. Please contact us at global.saavy@latimes.com.

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