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South Florida Sun-Sentinel
Puerto Rican Companies Target U.S. Consumers
by Doreen Hemlock
March 10, 2003
Get ready for an influx of Puerto Rican companies to Florida and other U.S. markets.
With economic growth flat on the Caribbean island, mainly because of a slump in U.S. investment, Puerto Rico-based firms are looking toward the 50 states to expand sales, focusing on areas with big concentrations of Puerto Rican and Hispanic residents.
Some examples of the trend:
>San Juan-based investment consulting firm Consultiva Internacional is opening a New York office this month, with plans to expand later in Miami, Chicago and beyond.
>Rio Piedras-based Oriental Financial Group this winter bought Boca Raton-based Caribbean Pension Consultants, which manages about $400 million in pension funds on the U.S. mainland, in Puerto Rico and other Caribbean nations.
Plus, more than a dozen Puerto Rican companies are signed up to show their wares in Coral Gables on March 18, seeking representatives, wholesalers and distributors, in an event organized by the Puerto Rican Chamber of Commerce of South Florida Inc.
"In the past, it was like pulling teeth to get Puerto Rico companies to come out and exhibit in Miami," said Luis de Rosa, the chamber president and organizer of next week's show. "But things on the island are very serious now. So, people are anxious and looking to the U.S. mainland for growth."
The moves come amid stagnation in Puerto Rico's economy, the largest in the Caribbean and the one with the highest per-capita income levels in the Latin American region.
The island economy posted a 0.1 percent decline last fiscal year and is expected to stay roughly flat this year too, should Washington enter a long war with Iraq and oil prices spike further, officials have said.
Contributing to the slump is a phaseout of certain federal tax breaks for U.S. factories on the island. Those tax breaks had helped transform Puerto Rico into the industrial powerhouse of the Caribbean, but Congress found them too expensive for U.S. taxpayers to maintain long term.
The phaseout has hit hardest at factories that use lots of labor, especially garment makers. Many in the competitive apparel industry have relocated to lower-wage sites, such as Central America and China, pushing up unemployment rates in Puerto Rico to roughly 12 percent, according to island government data.
Among those slashing operations in the U.S. commonwealth of nearly 4 million residents: Chicago-based Sara Lee Corp., which makes Playtex and Hanes garments.
Sara Lee said late February it will cut about 1,200 jobs in three women's lingerie factories in Puerto Rico. That's in addition to more than 2,000 jobs Sara Lee already slashed on the island in the past three years, company executives have said.
Florida has emerged as a favored U.S. destination for Puerto Rico-based companies, thanks to its large Puerto Rican and Hispanic community, proximity to the island and warm weather. The U.S. census counted nearly half a million Puerto Ricans living in Florida in 2000, double the 1990 tally.
Among the Puerto Rico companies already operating in Florida:
Financial group Popular Inc., with assets of $33.7 billion on Dec. 31. The Banco Popular group has 10 bank branches and 20 check-cashing operations in Florida.
Nazca Saatchi & Saatchi Inc., the advertising network for Latin America and U.S. Hispanic markets, with offices in Miami and more than a dozen Latin American nations.
Companies taking part in the Puerto Rico Business Expo at the Omni Colonnade Hotel in Coral Gables next week include frozen snack maker Productos Kikuet, tropical fruit producer Martex Farms and mop maker Mapos Coquí. For information on the expo, call the Puerto Rican Chamber of Commerce at 305-571-8006.