To understand what goes into making Combustion Associates Inc. the “poster child” for small companies that export in a big way, how they went from outsider to the object of affection for heads of state who lavish accolades, awards and contracts upon them, take a look at what comes out of the company’s Southern California headquarters.
There in Corona, 50 miles east of Los Angeles, you’ll see all manner, shapes and sizes of power generators made to power everything from single industries to whole towns. The generators are designed, engineered, constructed and tested in the company’s 40,000-square-foot facility, employing a holistic approach that aims to make a great product once installed—but also one that will stand up to all the steps and trucks and ships along the way.
“The units are designed not only to work well, but to be of an efficient design so that they can be handled properly and can be shipped without breaking anything down,” says Dr. Pooya Kabiri, CAI vice president of Engineering & Operations. Not having to deconstruct the units assures they will arrive as intended. What’s more (or less, perhaps), each unit is designed to fit, fully constructed in its entirety, nicely within the harboring walls of a 40-foot container.
“When we build the unit we are looking at the whole unit,” Kabiri explains. “We run simulations on everything, including ones that help us understand how it can be best lifted, how many times a unit can be lifted before it breaks; and then provide that information and lifting instructions to our customers.”
This kind of whole-istic approach—i.e., the whole unit ships as one and the whole thing fits inside a container—is indicative of how CAI operates: Leave nothing to chance, investigate and use anything that can provide an advantage and/or an opportunity.
It has been that way since Mukund and Kusum Kavia founded the company more than 25 years ago. CAI didn’t exactly begin with nothing—no, the Kavias had all of a 200-square-foot office space to call their own.
“Back then we were young and crazy,” says Kusum. “We started as consultants. We never thought we’d be manufacturing and building things. Every step of the way we’d say, ‘What now? What next?’ We just kept moving forward.”
Like so many American manufacturers, Kusum and Mukund would soon discover the far-reaching benefits of one short phrase: Made in the USA. Its suggestion of stability and quality would open international markets and wallets for CAI, which does the majority of its business making, selling and installing power generators in West Africa.
“When customers see our [American] flag,” Kusum says, “it really puts us above all the competition.”
Still, the Kavias are the first to tell you that the reason their company could ever be in a position to compete with behemoths such as General Electric, that the only reason they would have the ability and confidence to consider pursuing big, complicated and potentially risky projects—such as one that saw CAI provide eight, 10-megawatt electric power generating systems to the Republic of Benin—is because CAI itself was Made in the USA. It’s a fact the Kavias are certain of, since both have the unique perspective of being “made” overseas.
Born in Kenya, educated in Britain, the Kavias have seen and done business with a lot of the world—enough for Kusum to say with certainty that, “nowhere else in the world would we have been so successful as in the United States.” Of course, much of their success has to do with the couple’s own talent, drive and those late nights at the office, whether it was 200 or 40,000 square feet. There were years and years of going without vacations, years and years of learning the ropes of American culture and business on the fly.
One thing they learned was that there are a whole lot of programs, services and opportunities available to American business people. They learned how to pursue and utilize many of them and over the years have not been shy about reaching out to ask for help. They’ve used contacts arranged through their local chamber and department of commerce and perhaps most significantly found a ready, willing and comforting partner in the Export-Import Bank.
“We would not be where we are without the Ex-Im Bank,” Mukund says. “It gives us credibility.”
Ex-Im also gave CAI the Benin deal, which would lead to the company nearly doubling its workforce from 35 to 65. As you may or may not know, the Ex-Im Bank’s charter stipulates that no less than 20 percent of its lending authority be made available to small businesses looking to export. In the Benin case, a letter of credit was provided by pan-African bank Ecobank, confirmed by Citibank and insured by Ex-Im Bank.
Complicated? Sure. Critical? Definitely.
“We would simply not have been able to do the Benin project without the Ex-Im Bank providing insurance on our letter of credit,” Kusum says. “It blanketed our currency risk and political risk. It said to us, ‘If you don’t get paid by your customer, we’ll make sure you get paid.’
“That was so important because, to be honest, we had never heard of the country of Benin, so we had no idea what level of stability to expect,” Kusum continues. “When we first got the lead that the customer was looking for power to its national grid we were the only U.S. company at the table. We were competing with companies from China and Europe. Ex-Im kind of leveled the field for us.”
CAI has done other deals in Africa with Ex-Im Bank since then, including a recent project in Nigeria.
“We’ve become kind of a poster child for [Ex-Im Bank] for doing business in Africa,” Kusum says. And she’s not exaggerating: The Benin deal led to CAI being named Ex-Im Bank’s “Small Business Exporter of the Year for Sub-Saharan Africa.”
It was just a few years later, during the first-ever U.S.-Africa Leaders Summit in 2014, that CAI was singled out by President Barak Obama as an “example of what’s possible—a long-term partnership with Africa … a win-win for everybody.”
This wasn’t the first time the company was recognized by the administration. CAI has won two Presidential “E” Awards for Exports. And there have been numerous other recognitions, from numerous other private, public, local and national organizations, stemming from one of CAI’s guiding principles to constantly seek out beneficial programs, relationships and connections.
“Let me tell you one thing Kusum does so well,” says Fred Latuperissa, director of the U.S. Commercial Service, Inland Empire region. “She’s friendly, she’s approachable and she belongs to everything. She belongs to the Corona Chamber of Commerce. She’ll meet someone there who asks if she’ll speak to the Rotary. ‘I’ll be delighted,’ she’ll say. As a result, she meets someone there who asks her to join the export council of the Inland Empire. She volunteers, she speaks, she mentors, she reaches out to the local community, the business community, people know who she is—I’m talking city, county, state.
“I think sometimes company presidents are so busy at work, putting 12 to 15 hours at the office, that they forget about how important it is to maintain those outside connections, to pursue those outside opportunities and programs that are just waiting there for someone to use.”
Latuperissa, himself originally from the Netherlands, says it’s not unusual to find immigrants, especially ones such as the Kavias from the developing world, to be those who most often and enthusiastically pursue any and all programs designed to help small businesses. In an interesting way, their experience as outsiders serves them with a perspective that looks for every advantage.
“When you come from the Third World, I think you are immediately struck once you come to America by the abundant amount of resources that are provided by the government,” Latuperissa says. “They see an immediate pathway to opportunity, one that you won’t find anywhere else in the world. The idea that the government will be an active participant in your success is a powerful concept for a lot of immigrants.”
Kusum is adamant that the CAI success story could have only happened in America, “nowhere else.” Perhaps she feels so strongly since she deals regularly with other governments as customers.
“It’s twice as hard dealing with foreign-government customers as private ones,” she says. “There’s always an extra layer of bureaucracy and just as you make relationships new groups come in and you have to start all over again. There’s usually twice as much hand holding that goes on when you’re dealing with a government as a customer. We always encourage them to come out to visit California. It isn’t too hard to convince them. Once they’re here we feel like it’s easier to get things done. We show them how the units are made and tested. We try to be as transparent as possible to build trust.”
Trust is critical when you’re in a business that may require months to strike a deal, months to engineer, build and test the products and then, in the case of CAI’s West African customers, require two to three months to ship from Houston. And trust, Kusum says, is many times easier to build as a smaller company.
“That’s what a lot of our customers tell us,” she says. “They prefer the time and attention you get with a smaller company. We’re competing with huge companies, in some cases whole other countries, and while they may have advantages of size, a lot of customers feel like they get lost in the shuffle. They don’t know who you are. Here, I take your call or someone else in top management is taking your call. We’re always open and enthusiastic about someone visiting our site. We’re always open to talking about new ways to serve them. Being small makes us more agile.”
Alain Castro, CEO of Ener-Core, has done business with CAI and says its agility has a lot to do with the Kavias having nurtured and maintained an exceptional team of workers with “an extensive inventory of skill sets,” as he calls it. “You go to a big company and you’re going to find one person who does one thing. At CAI the people who can solder also can analyze electrical drawings, etc.”
Case in point: When a customer who could not speak English ended up connecting his unit completely wrong, management at CAI decided they needed to come up with different manuals, ones that depended less on language and more on graphics and images. Think IKEA meets GE. When it came time to actually put the new manuals together, CAI didn’t go to an outside publisher or content provider; rather, Kabiri says, “We took a first shot at it ourselves. After all, we know the systems better than anyone. We knew what they needed to be pointed to, we started documenting the system to keep it as simple as possible, to make it as easy as possible.”
But things never get too much easier for the Kavias—not in a world where energy policy and sources seem in a constant state of flux and development. Kusum says 2017 will be a “robust year for us,” and there is building going on next door to the company’s headquarters on a facility that will more than double its size. There is talk of not only building on the relationship the company has built in West Africa but expanding throughout the rest of the continent as well as emerging markets in Mexico, Turkey and Indonesia where, Kusum says, “Each island needs its own power system—that’s a huge need for power!”
Which is why Kusum and Mukund Kavia will continue to depend on their biggest power source: the seemingly unlimited resources and connections to be found in their adopted home.
“We’re just so passionate about what America has provided us,” Kusum says. “Nowhere else in the world would we have been so successful. The people, the atmosphere, the opportunities to bring your dreams into reality—it pushes us each day. You always hear about the American Dream, but the fact is if you work hard, the dream becomes very real. We’re proof of that.”
10 3PLS KILLING IT WITH DISTRIBUTION LOGISTICS