IT'S A SMALL WORLD: VALLEY BUSINESSES FEELING CRUNCH FROM ASIAN CRISIS.

Byline: Enrique Rivero Daily News Staff Writer

The financial crisis gripping much of Southeast Asia may be thousands of miles away, but the pain is being felt by some local businesses.

Some companies have seen major contracts canceled, or at least put on hold indefinitely. Others haven't received payments for services or products already rendered. And, in an ironic twist to the financial crisis affecting the region, other area companies have seen competitors based in those Asian countries churn out more imports at greatly reduced prices that undercut the local products.

Perhaps the most visible Valley-area company affected by the crisis is ChatCom Inc.

The Chatsworth-based file server maker in December reported that a Singapore distributor was in arrears on a multimillion-dollar bill and didn't have the $1 million it promised to invest in ChatCom stock. As a result, ChatCom lacked ``sufficient working capital to meet all of its current obligations.''

The situation forced ChatCom to take back some $2.45 million worth of equipment that the distributor couldn't pay for, some of which has yet to be returned, ChatCom board Chairman Richard Gordon said Thursday.

``Hopefully the Asian market will improve and change and we can continue the relationship,'' Gordon said. ``That remains to be seen.''

Also feeling some real pain is Harold Thompson & Associates Inc., an architectural and interior design consulting firm in Encino that specializes in hotels.

The company's four projects in Malaysia, the Philippines and South Korea - comprising about 80 percent of its workload - have been suspended, company President Harold Thompson said.

He has offered to continue those projects for his clients at the current exchange rate. ``When things do stabilize they can reimburse me,'' he said.

Nevertheless, though Thompson has done business in Southeast Asia for 30 years, he is seriously considering pulling away from the region.

``Now I just have to pick up whatever I can and go somewhere else, because I don't think it's going to clear up (in Asia) for a couple of years,'' Thompson said.

Pacoima-based Arc Machines Inc. once sold about 5 percent of its welding equipment to east Asian countries such as South Korea and Malaysia, company President M.E. Gedgaudas said.

And now?

``We simply are not receiving the sales to those countries that we expect,'' he said.

He would not quantify the comparative drop in the company's sales to those countries, other than to say that it is ``not seriously significant.''

``But it is of some concern, yes,'' he added.

Microwave Communications Corp., a private maker of custom designed communications equipment in Valencia, recently saw a ``sizable'' contract put on hold because that customer's Indonesian client had been forced to stop the project, company president Michael Claggett said.

``We've got a quarter of a million dollars in business on hold because of that,'' he said. ``Fortunately we've got a big enough backlog that we're shuffling the workload around to replace it.''

One way local companies can fill the trade gap is by looking for alternate markets for their products and services, said Lisa Grobar, an economist at California State University, Long Beach. That includes finding more domestic customers, she said.

The range of industries likely to be most affected by the continuing crisis is wide and includes both manufacturing and service industries, Grobar said.

They include telecommunications, financial services, computer data processing, engineering and other businesses that export products and services to Asia, she said.

``The list is long - in fact, we do export in all those areas,'' said Grobar, who just released a study on international exports showing that the Los Angeles basin - Los Angeles, Ventura, Orange, Riverside and San Bernardino counties - are likely to be harder hit than other parts of the country by the crisis.

About one of every seven jobs in the five counties is linked with overseas exports, according to the report.

Hotels, restaurants and colleges - which Grobar considers ``an increasingly important part of the exporting story'' - will also be hurt as fewer tourists and students come to the Southland from the affected countries, she said.

Some companies are being affected indirectly.

Thousand Oaks-based International Technologies Network Inc., which among other things sells electronics from China to Europe, is facing new competition from countries where the currency devaluation is forcing down their prices.

``Right now our competitors offer lower prices than we have,'' company President Shrikumar R. Nair said. ``But the effect, we might feel it three months down the line.''

Companies that relied most heavily on exports to Asia may see some rough times the next couple years, Grobar said. In general, however, she expects the Asian crisis to end soon - a sentiment echoed by many local business leaders, including Arc Machines' president.``The type of businesses that buy our products will recover quickly and we'll do more business than we have when they do recover,'' Gedgaudas said.

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Photo: (Color) Shrikumar R. Nair, who owns a Thousand Oaks import/export business, has seen falling Asian currencies weaken his firm's competitive position.

Phil McCarten/Daily News