How has the global financial crisis affected your business internationally?

Lauren Rottet, who launched Rottet Studio earlier this year, has spent the past five months vying for and winning contracts in Frankfurt, Shanghai and Buenos Aires.

Interior architect Lauren Rottet has spent the past five months traveling the globe, designing and winning projects in Frankfurt, Shanghai and Buenos Aires.
She never thought she would spend so much time working on international contracts when she launched design firm Rottet Studio in Houston earlier this year.

But the U.S. economic slowdown led two of her largest domestic clients to put their projects on hold and encouraged her to focus more on overseas business.

"Our revenue is pretty much what I predicted," Rottet said, but "it's coming from more foreign work and from hotels and smaller projects."

Several Houston firms like hers say they are increasingly turning to foreign clients to diversify as the U.S. economy faces a credit crisis and companies cut back on expansions and expenses.

"It makes you realize that you have to have more geographies to have more opportunities," said Rottet, who is expecting international sales to make up 20 percent of her revenues this year.

Weak dollar's benefits

Long before the market meltdown and credit squeeze, U.S. companies that did business overseas were benefiting from a weak dollar, making their goods cheaper relative to the euro and boosting exports.

Exports in 2007 were $1.2 trillion, up from $817 billion in 2004. For the first six months of this year, exports were $661 billion. That's compared with $560 billion in the same period a year earlier.

Even now as the dollar strengthens and the malaise has spread around the globe, businesses like Rottet's find emerging markets attractive.

"I do think there is a fair amount of activity occurring to take advantage of markets that are more robust than the U.S.," said Charlie Meacham, a partner in the Houston office of Gardere Wynne Sewell.

Five years ago, U.S. and Canadian firms purchased most of DeltaValve Curtiss-Wright Oil and Gas Systems' valves. These days, more than half of the Utah company's sales are to international customers and Latin America is its most important market, said Miguel Lopez, the company's Houston-based Latin America sales manager.

U.S. projects that would have taken 10 months to come to fruition, now take up to two years, Lopez said.

"Corporate boards are considering options that maybe a few years ago was a no-brainer for them," he said.

At the same time, high oil prices in the petroleum-rich Latin American nations mean more state-owned companies are investing in their energy infrastructure.

So DeltaValve is more aggressively targeting buyers in those nations, planning to meet with Colombia's petroleum company next week.

"Companies like us don't have to sit idle. We have taken the strategic decision to look at international markets," Lopez said.

Relying less on U.S.

As the global contagion hit the Latin American financial markets, Lopez felt more confident that his company should sell more overseas.

"It only reassures us that our decision to focus on international business is the correct one," said Lopez, as he waited for a flight to Spain, site of an international oil and gas conference where he expected to meet Latin American attendees. "We cannot just rely on the health and strength of the U.S. economy."

In June, Houston manufacturer Jay Tavarez and his son traveled to London to discuss manufacturing a patented product for an English organization.

"We're looking at it more closely than in the past," said the owner of CT Industries, which makes rubber goods, seals and gaskets. "I went to case things out."

'Global problem'

Just five years ago, he made no international sales and now foreign buyers make up less than 10 percent of his sales.

"I think some people are trying to diversify internationally but they're pretty aware that the international markets are also affected by the international problems. I wish it were as easy as moving to an international market, but unfortunately this is a pretty global problem," said Scott Arrington, corporate partner in the Houston office of McDermott Will & Emery.

He said Houston companies, especially his large energy company clients, have always done business overseas.

"The difference now is that they are starting to see international activity as more of a hedge than they might have seen it as before," Arrington said.