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Entrepreneurs must innovate to create successful business ventures
Innovation, human capital, and excellence in manufacturing unique to Puerto Rico
By MARIALBA MARTINEZ
April 28, 2005
Innovation is the answer to becoming a successful business entrepreneur, according to presenters of the business opportunities seminar held by the Puerto Rico Manufacturers Association during the recent CEO Summit.
Cyril Meduña, managing director of private investing firm Advent-Morro Equity Partners; Rita Peralta, president & general manager of Infotech Aerospace Services; and Joaquín Viso, former president of Mova Pharmaceuticals, now merged with Patheon Inc., presented their views on the opportunities and challenges companies must face to do business effectively in Puerto Rico. At the end of his presentation, Meduña pointed out, "The message is that investing in Puerto Rico is exciting and possible, and there are lots of opportunities."
Since 1997, Advent-Morro has analyzed 453 companies seeking capital, investing close to $40 million in the start-up or expansion of 32 companies in several industrial sectors and stages of development in Puerto Rico, Meduña revealed. The local equity investor company is an affiliate of Advent International Corp.a network of partners that spans 25 countries served by 14 wholly owned Advent offices and 10 affiliates.
"Advent-Morro is doing innovative work," said Meduña. "We do what people have been doing since forever; that is, providing money for peoples ideas [to help them establish] the companies they dream about. Advent-Morros deals are broad in scope, which is very interesting for us in terms of getting technology and expertise for the business opportunities we have here. It has allowed the company to invest and take this technology to other affiliates around the world."
The companies funded by Advent-Morro employ more than 3,000 people and have created over 1,000 new jobs, Meduña noted. He highlighted the success achieved with three specific companies, each in a different industry: health insurer Medical Card System Inc., heart-cell technology firm Bioheart Inc., and Ocean Harvest. Other local companies the group has invested in are Centennial Wireless, Islanet Communications, Valor Telecom, Montehiedra Advanced Radiology, El Convento Hotel, ICPR Junior College, Viu Media, Intech, Abaco Mobile, and Trexel Inc.
According to Meduña, the company depends on a very knowledgeable group of entrepreneurs and business people who serve on its advisory board and board of directors to provide in-depth information about the islands business community. "One of the most important things they do is evaluate the primary aspect of the businesses we are looking to invest in, such as its people. They help us weed out people who may be too complicated to deal with."
Infotech Aerospace Services Inc. is an example of a government-promoted success story; a Puerto Rico Industrial Development Co. (Pridco) effort coming to fruition, and in the development stage. The company is a joint venture established in 2003 between Indias Infotech Enterprises Ltd., a global software services company specializing in geospatial, engineering design, and information technology solutions, and Connecticut-based Pratt & Whitney, a pioneer in flight technology, as a wholly owned subsidiary of Infotech Enterprises. Infotech Aerospace now provides aerospace engineering, mechanical design, and software development for military, commercial, and industrial gas turbines and is the first aerospace engineering services company in Puerto Rico.
"In 2003, we launched a pilot program at Vitec2s technology incubator facility in Mayagüez," Infotech Aerospace President & General Manager Rita Peralta said. "We started with 18 employees, all graduates of the University of Puerto Rico Mayagüez Campus (UPR-RUM) Engineering Program. Today ,we have reached phase II of our plans and have 135 employees. By years end we expect to have 200 employees, most with engineering or science degrees."
Infotech Aerospace Services moved in October 2004 to a 22,000-square-foot building belonging to Pridco in Isabelas Mora Guerrero Industrial Park. A contributing factor to Infotechs success is its positive relationship with local government and academia, according to Peralta. The aerospace company has United Technologies professionals training UPR-RUM professors, so they can in turn teach students about aerospace engineering. The local aerospace company is also providing research endowments to Hato Reys Polytechnic University of Puerto Rico engineering programs.
"It is in our interest to invest in preparing engineers at the universities," Peralta said. "Most of our work cant be sent overseas, so Puerto Ricos U.S. citizenship is a major advantage. The [islands] educated workforce, English fluency in engineering technology and the technical industry, and proximity to our parent company [Pratt & Whitney] in Connecticut also make it quite conducive for us to establish ourselves in Puerto Rico."
Mova Pharmaceuticals Viso founded the contract manufacturing company in 1986 and sold it in 2004 for $350 million to Canadian counterpart Patheon Inc. Viso emphasized Puerto Ricos opportunities for business development in contract manufacturing.
"Puerto Rico has many advantages, among them outsourcing, which has been my area of expertise during the past 18 years," Viso said. "Whether in the pharmaceutical manufacturing life sciences sector or providing services to high-technology companies, Puerto Rico must take advantage of its position as the pharmaceutical capital of the world, its human capital, and its infrastructure."
Viso quoted statistics that reveal the island has more than 60 pharmaceutical drug manufacturing plants, with more than 28,000 jobs. In addition, the pharmaceutical sector, including chemicals and medical devices, exports 25% of its goods worldwide.
"The pharmaceutical sector is trying to reduce capital investment," said Viso, adding, "This is forcing it to look at outsourcing as a key element in the supply chain, to enable it to concentrate its resources on research and development. Puerto Rico is in a unique geographical and cultural position to promote itself globally and begin manufacturing pharmaceutical products from other parts of the world.
This Caribbean Business article appears courtesy of Casiano Communications.