Orange County’s 50 largest minority-owned businesses saw a solid year of growth in 2007, according to this week’s Business Journal list.
But that might be changing as a slower economy has many minority business owners tempering their outlooks for this year.
Revenue for the county’s top minority-owned companies surged to $9.6 billion last year, a 29% jump from 2006.
No. 1 Fountain Valley-based Kingston Technology Co. led the gain with a 22% rise in 2007 sales to $4.5 billion. The maker of computer memory products made up nearly 50% of the revenue on the list.
Without Kingston, the other 49 companies saw a 36% gain to $5.1 billion in sales last year.
A year earlier, the 52 largest minority-owned companies here grew sales by 15% with Kingston and 7% without the company.
No. 2 Irvine-based Vizio Inc. posted the biggest gain on the list by dollars and percentage. The seller of affordable flat-panel televisions sold at Costco and other big retailers saw its revenue surge to nearly $2 billion last year, an 181% jump from 2006.
Vizio grew its OC headcount 31% to 105 workers.
In total, the companies on the list added 621 local workers in the past year, a 6.9% gain to 9,580 people.
No. 21 Wahoo’s Fish Taco, a Santa Ana-based operator of Mexican-style eateries, led the hiring by adding 190 jobs for a total of 650.
Wahoo’s grew its revenue 44% to $40 million last year.
The boost in revenue and jobs was led by the opening of more Wahoo’s restaurants, President and Chief Executive Mingo Lee said.
Things are different this year, he said.
“In general, we, along with the rest of the economy, are not experiencing the growth numbers we’re accustomed to,” Lee said. “But we’re still very happy with where things are going.”
Wahoo’s might hold off on opening more company-owned restaurants until 2009, Lee said.
Minority-owned companies grew jobs companywide by 13% to 20,910 people, led by Kingston’s 500-person gain at its China factories.
Kingston, which is owned by Chinese immigrants David Sun and John Tu, buys memory chips and assembles them onto circuit boards or in cards for consumer electronics.
Memory chip prices are falling, which squeezes Kingston and others as prices for its products also fall.
“Memory is a commodity business so our fate is tied to the price of chips on a daily business,” said David Leong, Kingston’s spokesman. “We’ve seen some stabilization in pricing this quarter after largely trending downward since the middle of 2007.”
Our list includes OC-based companies that are majority owned by Hispanics, African-Americans, Asians and American Indians. In general, we follow federal guidelines on minorities, which exclude Arabs, Iranians, Armenians and others.
Always a work in progress, this year’s list includes six new entries. Two companies from last year’s list fell off after being acquired or missing this year’s $8 million minimum revenue cutoff.
This year’s list includes ethnic supermarket chains, a toothbrush and mouthwash maker, a swimsuit maker, an architectural design firm and an advertising agency, among other businesses.
There were more Hispanic-owned companies than any other ethnicity, at 23.
Asian-owned companies are next at 22. African-Americans own three companies.
Newcomers to the list: No. 15 Gkkworks of Irvine; No. 17 alPunto Advertising Inc. of Tustin; No. 45 Santa Ana-based Specialized Marketing Services Inc.; No. 47 CNC Engineering of Irvine; No. 49 West Coast Consulting LLC in Newport Beach; and No. 50 Affordable Quality Pharmaceuticals of Garden Grove.
Specialized Marketing Services’ revenue grew 18.8% to $9.5 million last year. The company counts 45 workers, according to the list.
Earlier this year, SMS moved into a remodeled 82,000-square-foot building on Segerstrom Avenue in Santa Ana after outgrowing about 60,000 square feet of space spread among three buildings in Irvine and Santa Ana, according to Chief Executive Gloria Robbins.
No. 23 Dr. Fresh Inc. expanded its Buena Park headquarters. The company, which generated about $35 million in sales last year making dental and personal care products under the Dr. Fresh brand and licenses owned by Walt Disney Co., Marvel Entertainment Co. and Cadbury PLC, expanded by 100,000 square feet to move manufacturing from China to Orange County.
Changing Products
Some minority-owned companies on the list plan to offer more products to help them drum up sales in a tough economy.
No. 6 natural stone seller MS International Inc. of Orange is starting to offer porcelain and ceramic tiles, according to Rup Shah, executive vice president.
MS International grew its revenue 23% last year to $232 million. The company’s OC headquarters, which spans 20 acres, counts 190 workers. MS International has 365 workers companywide at its offices in New Jersey, Georgia, Massachusetts, Illinois, Arizona and Texas.
The company, which buys stone directly from sources in India, China, Brazil, Turkey, Mexico and other countries, sells its stone to homebuilders, commercial developers, big- box retailers such as Home Depot and contractors.
The real estate slowdown has cut into MS International’s profits in recent years, according to Shah. And rising fuel costs continue to be a large burden on the company, which has to ship its stone from all over the world.
It has started transporting goods via railway instead of using trucks, Shah said.
MS International is in the process of opening three more offices this year or next year in Maryland, Texas and Northern California.
No. 9 Raj Manufacturing LLC of Tustin has also introduced products.
The swimsuit maker recently launched Luxe, an upscale line of swimsuits and a collection of shorts, dresses and shirts to wear over them. The swimsuits and clothes are expected to sell from $45 to $200 at upscale department stores and boutiques.
Raj generated an estimated $160 million in sales last year and counted 400 OC workers.
Starting Luxe could be a part of a growth bid by Raj, especially now that San Francisco-based private equity firm Swander Pace Capital LLC is backing the company.
Last year, Swander Pace helped Lisa Bhathal Vogel and Alex Bhathal complete an investor-led buyout of Raj from their parents Marta and Raj Bhathal, who started the company more than 40 years ago.
The list also saw a name change.
Huntington Beach-based Perfume Bay Inc. changed its name to Beauty Encounter Inc. this year after the online seller of perfume, makeup and bath and body products lost an appeal on a trademark infringement case brought by eBay Inc.
The company ties for No. 31 on the list and saw its revenue grow 8.8% last year to $18.5 million. The company has 25 workers at its OC headquarters.
The biggest percentage decliner on the list was No. 44 Garza Industries Inc. The Orange-based seller of office supplies and marketing materials saw its revenue drop 17% to $10 million last year. The company counts 30 workers, down 14.3% from a year earlier.
