A Rocky Success Story For Expat Woodworker

Out of the woodwork

A series of setbacks never failed to dishearten Antonio Gomez, who once again ran to a bank in a last-ditch effort to make his woodworking business work.

  Out of wood work Gomez and his people shifted from making chopping boards to creating home furniture, and it wasn’t long before they had enough funds to rent a 7,000-square meter facility in Mabalacat, Pampanga. And banking on his reputation from his Cedarwood days, Gomez was able to attract foreign buyers again and to mass-produce furniture. “We were shipping several containers of furniture to the United States,” he says.

But again, Chinese competitors stole Gomez’s clients by undercutting their prices, forcing him to scale down his production. “I was frustrated,” he says. “Our designs were better but they really cost a lot more. So I went back to the one who supplied me my machines and asked him how I could make my equipment run more efficiently.”

It was then he found out he needed to replace his outdated machines with computer-aided ones so he could churn more furniture in less the time. But there’s a catch: the machines cost P130 million. Gomez tried but failed to raise the amount by pooling money with friends and applying for another round of bank financing.

Having exhausted his options, Gomez decided to make do with his small facility and old machines, and to have operating capital, he sought a loan from Banco de Oro, which extended him a P1.5 million credit line in 2002. He used the money to buy wood, paint, and hire more workers. When the balance was down to P600,000, he borrowed P1.5 million more, this time payable in two years, to sustain operations. “You really need to have a large amount of working capital to sustain your inventory,” he explains.

Nevertheless, Gomez’s latest round of borrowing served him in good stead, for it allowed him to open a showroom in SM Megamall in September 2005, giving his products more exposure. Today, his company ships around 60 containers to Japan and Spain. It was nothing compared with his former American buyer, but at least it’s a steady source of business. Gomez believes his competitive advantage lies in his designs. “All our products include little touches of indigenous materials, like bamboo and coconut shells. These are what the export market is looking for.”

Despite the series of setbacks he suffered, Gomez still believed in the potential of the woodworking business. “My wife is the one who would always be hesitant, especially when I take out loans, for example. Pero matapang ako. Pag nakikita ko na pwede ang isang bagay, itutuloy ko yan. I tell her we need money to produce; if we don’t borrow money, what will we do with our lives? Ang importante, alam natin na kaya natin bayaran. I borrow money to generate more money for my business

GET THAT LOAN

Single proprietorships or corporations engaged in trading (import/export), manufacturing, construction, agriculture, and food processing and which have been profitable for at least three years, can avail of a minimum of P400,000 under the following lending services from Banco de Oro:

• Credit Line – For working capital and short-term requests. The line is renewable yearly and the interest payable monthly

• Terms Loan – For short and medium financial requests. Interest and principal are payable in equal monthly amortizations

• Letter of Credit—For export/import transactions. These are renewable after a year

Contributor..C. Bruce