Many Companies Owned by Latinos Thrive, Survey Says

The recession hasn’t chipped away at Cal-State Lumber Sales. On the contrary, Cal-State, a distributor of lumber and building materials, saw its sales skyrocket from $15 million in 1989 to $104 million last year--and it expects to hit $125 million in 1991.

According to a ranking being released today by Hispanic Business magazine, Cal-State is the largest Latino-owned firm in California and the 12th-biggest in the nation.

What made the San Ysidro firm take off? For starters, its trusted supplier in Tijuana finally completed a wood mill expansion and began providing Cal-State with all the building materials it could sell.

But for Cal-State, as for many other Latino-owned firms, the past year has also been a time of coming of age.

Founded in 1984, Cal-State is benefiting from years of spadework by its owners, Mexican-born brothers Benedict and Victor Acevedo, and by company employees. Necessary approvals were secured from Mexican authorities for cross-border trade. Manufacturing quality controls were put in place.

Perhaps most important, customers were slowly cultivated to the point that they were constantly asking if Cal-State could supply new lines of building materials, everything from closet poles to crown moldings.

“One thing led to another thing to another thing,” said Mary Alice Acevedo, Benedict’s wife and the company’s spokeswoman and director of international relations.

Many Latino-owned firms across the nation apparently have had similar, if less dramatic, experiences. According to Santa Barbara-based Hispanic Business’ new annual survey, sales of the nation’s top 500 Latino-owned businesses climbed 8.1% last year to $9.03 billion.

While that growth lagged behind some other standards of business expansion--California’s top 100 publicly held companies, for instance, grew by 10.5% last year--it outpaced 1990’s 6% rate of inflation and the 6.4% sales increase for the Fortune 500 industrial corporations.

To some extent, the results of Hispanic Business’ ninth annual survey were skewed by the difficulties involved in gathering statistics on privately held firms.

The top Latino-owned firms also compared favorably, in part, because they are far smaller than the heavyweights that make up the Fortune 500; successful small companies tend to grow at faster rates.

The No. 1 company on the Hispanic Business list--rum and wine importer Bacardi Imports of Miami--posted a substantial $602.1 million in sales. But the No. 500 firm--Valley Pride Foods Distributor of McAllen, Tex.--reported modest revenue of $2.8 million.

At the same time, many of the Latino-owned companies are in recession-resistant trades such as food-processing. In fact, America’s growing appetite for ethnic foods was a boon to many Latino-owned food firms, said Frank Medina, executive director of the Latin Business Assn. in Los Angeles.

For Cal-State, recession-related softness in home building was offset by the strength of the remodeling business.

In addition, experts said government-imposed set-aside programs for minority contractors and business suppliers may also be aiding Latino firms. In other cases, big U.S. consumer products companies are increasingly turning to Latino advertising agencies and other Latino professionals to tap the nation’s growing minority markets.

Beyond those factors, experts said, many Latino-owned firms have matured into successful, mainstream businesses--including firms that once may have relied on special government programs or the patronage of minority customers.

“I would hope that people would buy from us simply because we have a good product,” Mary Alice Acevedo said. “The problems we have are the same ones that a company owned by a non-Hispanic would suffer.”

With 130 of the 500 largest Latino-owned firms, California remained the leader on Hispanic Business’ roster. It was followed by Florida with 114 and Texas with 72.

However, Florida’s firms chalked up the highest revenue, $2.82 billion, followed by California’s $1.92 billion.

The monthly magazine’s survey comes on the heels of a new study by the U.S. Census Bureau that found the nation had 422,373 Latino-owned businesses in 1987, up 81% from five years before.

The State’s Top Latino Firms

These are the 10 Latino-owned businesses that were ranked the best in California in a survey by Hispanic Business Inc. magazine. Sales figures are in millions of dollars.

Company and Type of Number of 1990 Rank Location Business Employees Sales 1 Cal-State Lumber Wood product 77 104.01 San Diego sales 2 Lloyd A. Wise Automotive sales 191 98.00 Oakland and service 3 TELACU Economic 630 86.22 Los Angeles development corp. 4 Rosendin Electric Electrical 600 78.00 San Jose contracting 5 Ruiz Food Products Mexican food 800 70.64 Dinuba manufacturing 6 Ramos Oil Co. Petroleum 120 60.13 Sacramento product distributor 7 Wisdom Import Beverage 64 56.11 Irvine importer 8 Pasadena Services Engineering 750 55.70 Pasadena services 9 Infotec Develop. High-tech 550 52.16 Santa Ana engineering 10 La Reina Mexican food 500 49.80 Los Angeles manufacturing

* MINORITY CONCERNS

Education and industry professionals fear that the pool of minority engineers may be shrinking.