Export Curbs?
A North Carolina manufacturer rides the falling dollar to international success.
By Ron Stodghill/Salisbury, N.C.

(FORTUNE Small Business) – These are globetrotting times at Power Curbers, a family-owned firm in Salisbury, N.C., that makes huge tractors used to lay concrete sidewalks, curbs, and gutters. On a recent workday sales manager Randy Chandler caught a 20-hour flight from North Carolina to Indonesia, where he met with local distributors and highway contractors. Five time zones away, his colleague Frans de Jong hammered out details with a Russian client who needed paving machinery for a tunnel project in Ukraine. Meanwhile, service rep Guy Tops was headed to Belgium after ten days of training Saudi customers to pour concrete highway-barrier walls. "It's a big world," says Power Curbers CEO Dyke Messinger, 55. "We're starting to sell to a lot more of it."

Like many small U.S. manufacturers, Power Curbers has historically struggled to sell its products overseas. Obstacles include language barriers, high U.S. labor costs, and weak distribution systems. And until relatively recently, a strong dollar made American goods more expensive than their European counterparts.

But over the past three years the dollar has fallen 24% against the British pound and 34% against the euro. As a result, products priced in dollars are gaining a rare edge. Power Curbers has seen its exports rise to 25% of overall sales, from 15% in 2002. "We're striking while the iron is hot," says Stephen Bullock, the company's vice president of sales and marketing.

The firm's flagship product is the Power Curber 5700-Super-B, a lumbering $170,000 behemoth that pumps out miles of concrete like toothpaste from a tube. The Super-B enjoys a 60% U.S. market share. But the steep pricetag used to make it a tougher sell abroad against German rival Wirtgen's equivalent machine, which costs much less. And then the dollar plunged. "In many markets the decline in the dollar knocks 30% right off our price, compared with our German competitor," boasts CEO Messinger, 55. The sales impact has been dramatic. Power Curbers used to average one Super-B sale a year in Australia, for example. Last year it sold five.

Power Curbers is a 70-employee company that took in $25 million in revenues last year; Messinger says it is profitable. Founded in 1953 by Messinger's grandfather, the company grew with the U.S. Interstate Highway System. In the early 1990s the company helped pave the Eurotunnel, which connects England and France by a high-speed rail link under the English Channel. For that project the firm built three custom machines to pave 31 miles of railbed and 62 miles of sidewalks inside the tunnel.

In the mature U.S. paving market, Power Curbers finds it must snag market share from rivals to eke out growth. But overseas, 90% of all concrete paving is still poured manually. (The opposite is true in the U.S., where 90% of all paving is machine-poured.) Today the firm's key international markets are Australia, China, Ireland, and Spain. By expanding elsewhere in Europe and the Far East, Messinger aims to increase overall sales to more than $35 million over the next five years.

International marketing is costly, time-consuming, and often frustrating. In the four months it spent competing for the Eurotunnel contract, Power Curbers flew its U.S.-based chief engineer to biweekly sales meetings with the French contractor. In the late 1990s, Power Curbers landed a dam-construction project in drug-infested Medellín, Colombia. The area was dangerous for Americans because of the high incidence of kidnapping, so Power Curbers hired armed guards to protect its salesman there while he trained a Colombian contractor to operate the machines. And earlier this year, sales manager Chandler endured a treacherous three-hour drive through the ravines and swamps of rural Mongolia to make a sales pitch to a Chinese contractor. Over the past three years foreign sales trips have driven the company's marketing expenses up 25%. "It's a huge investment," Messinger says. "We've got to have the margins to justify our exploration into foreign markets."

Accordingly, Power Curbers has embarked on a radical belt-tightening program. The company's main plant in Salisbury was once bloated with overly specialized workers and soaring overtime costs, say senior managers. Much desperately needed cash was tied up in inventory, from hydraulic pumps to motors to machine frames, all stacked by the thousands along the factory's walls. But in the past three years Power Curbers has become an efficiency-obsessed band of cross-functional laborers who strive to eliminate wasteful processes at every turn. Welders, for example, manage their own inventory, ordering parts only when they need them. They have also been trained to pick up the slack in assembly or the paint shop if necessary.

The results have been impressive. From February to March, Power Curbers increased its output of finished machinery by 30% without any additional investments in labor or capital. And overtime has been virtually eliminated. The cost savings are allowing the company to invest more in overseas marketing, which is already paying dividends. In Thailand, for example, local contractors recently used Power Curber machines to build a dam on the Nakon Nayok River. And in India a 5700-Super-B poured 60 miles of curb and gutter for a road project near the port city of Mumbai.

Power Curbers is in a good spot today, but Messinger and his colleagues know that the dollar won't stay cheap forever. "We have to keep driving costs out of the system so we can compete everywhere possible," says Craig Neuhardt, the company's vice president of manufacturing. In other words, the company will need to keep its technology fresh, its factories lean, and the passports of its salesforce up to date.