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Trade incubator opens in West Des Moines

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Bill and May-May Ng know the challenges of getting a small business off the ground. They’re also versed in the intricacies of doing business internationally. Now, they’re using that experience to form a business incubator in West Des Moines that will host businesses specializing in international trade.

Their 15-year-old company, CK International Ltd., recently purchased the Starr-Terry Building at 1201 Grand Ave., which will house their business and the CK International Cultural and Economic Center. The incubator has already contracted with a few tenants, among them Fareast Leather Industrial Co. Ltd., a Chinese manufacturer that is one of the largest purchasers of pigskins from Iowa and U.S. pork producers.

“We’re happy that we’re one step closer to our dream,” May-May Ng said, “which is to set up a business incubator for Iowans who want to start international businesses, and also for very reputable foreign companies such as Fareast to get into America. We’re very excited about that.”

The couple purchased the building in April from Terry and Susan Knapp. The 11,000-square-foot building, formerly occupied by Starr Litigation Services Inc., has 18 rooms on the first level, with five offices and a dozen cubicle spaces on the second floor and a basement-level auditorium that was designed for attorneys to prepare for trial.

“The design is just perfect for what we want to do,” May-May said. “We were very lucky to pick up that building at a very reasonable price, thanks to Starr-Terry Properties giving us the opportunity to do that.”

Three years ago, the Ngs (pronounced ing) had planned to purchase the former Jasper County Care Facility building in Newton to use for the trade center. The proposed deal fell through in late 2006, after Jasper County supervisors decided it would be too expensive to make the requested repairs to the building.

Before starting CK International in 1994, Bill Ng was a tax manager with Principal Financial Group Inc., and prior to that an auditor with Time Warner Inc. The couple moved to Des Moines in 1991 after May-May was recruited as vice president of accounting by Central Life Assurance Co., which is now part of Aviva USA. She also served a short time as vice president of international accounting for Prudential Insurance Company of America Inc. at its headquarters in Newark, N.J.

“I very quickly realized that New Jersey was not my cup of tea, so I came back to Des Moines as a visiting professor at Drake (University) for a year before I joined Bill in his family-owned business,” she said. Their company’s name is an abbreviation of Chin Kee, which is one of the largest vegetable importers in Hong Kong. “It has nothing to do with Calvin Klein,” she said with a laugh.

CK International, which was recognized as Iowa exporter of the year in 1999 by then-Gov. Tom Vilsack, works closely with Midwest pork producers to develop special cuts and packaging of pork for Asian markets. It also exports vegetables grown by western-state producers. The business will move its small office and retail store, now on Second Avenue in Des Moines, to the Grand Avenue building.

“We are Iowans by choice,” Ng said. “We decided to put our business here because the people here have a good work ethic, and there is a good supply for pork products, of course. It’s just a great place for business and a great place to live. We’d like to help Iowa to promote an image to international businesses that want to do an investment in the United States.”

Fareast has been a client of CK International since 2000. Based in Wenzhou, China, Fareast also has a subsidiary in Hong Kong and a plant in Vietnam. Between its plants in China and Vietnam, it has the capacity to process up to 24,000 pigskins per day, primarily for use by athletic shoe manufacturers such as Nike Inc. and Puma AG.

“In the last few years, supply and demand have become tighter and tighter,” said Wang Huai, Fareast’s board chairman, who visited Greater Des Moines recently to tour the office space. Two of his company’s subsidiaries that import pigskins from the United States, Eastone Investment Ltd. and Elsa USA Inc., will relocate to the West Des Moines space from Chicago.

“Whoever can control or have good management of raw materials will be more successful than others and have a competitive advantage,” Wang said in Mandarin, with Ng interpreting. “Because of that, it’s really important for Fareast to have our subsidiaries close to the Midwest, and Iowa is one of the key suppliers for our business.”

Following his trip to Des Moines, Wang traveled last week to Beijing, where he appealed to Chinese government officials to lift the ban on imports of pork products to China from Iowa and 34 other states.

Wang also said that having an export office in Iowa could open doors for his company to bring manufacturing jobs to the state in the future.

“I forecast that after the economic crisis, there will be manufacturing jobs coming back to the United States, because people will be more willing to take these types of jobs,” he said. “I have no intention to move my not-as-environmental-friendly tanning business back here, but I would sure like to move some of the processing here, such as making shoes for the military, in the future. I feel that because of the excellent work ethic here, it’s a great place to consider.”

The business incubator will also provide expansion space for Active Link Logistics LLC, a Waukee-based freight forwarding company that has worked with CK International for a number of years.

Additionally, “we have another logistics person moving in, a consulting company that specializes in marketing to Japan,” Ng said. “And we are talking with another couple of companies that are interested in exporting Iowa agricultural products.”

Ng said she has no intention of limiting the incubator’s focus to Asian markets. In fact, one of her immediate goals is to recruit a tenant company that specializes in exporting to Mexico.

“I think Mexico is a great market,” she said. “We do export to Mexico and Canada right now, but that’s definitely the business we want to expand, especially with Mr. Wang here, because the United States, Canada and Mexico are critical markets for his leather products coming back this way.”

The incubator, which is entirely funded by CK International, will be very selective in the companies it recruits, Ng said.

“I would rather grow slowly and find the right people to work with rather than have mass production,” she said. “We just want to have this very unique place where people who are interested in international business can get together to share ideas, to share their experience and grow together.”