Exports Are Flowing From The Mississippi River Corridor
HOW STATES IN THE REGION ARE STIMULATING THEIR ECONOMIES AND ENCOURAGING SITE SELECTION BY FOCUSING ABROAD
The Mississippi River is a mighty force for trade and commerce, and programs within the 10 states that share its banks are helping push exports, with a wide host of companies benefiting.
After the economic collapse of 2008, Monticello, Kentucky-based Stardust Cruisers needed a life preserver. By third quarter 2010, the company—America’s oldest continuously operating manufacturer of houseboats—sank to the point that it was building nothing. Its workforce dropped from 70 to 15 employees. “There was zero work in the shop,” recalls Terry Aff, Stardust president.
Thanks to assistance from the Kentucky Cabinet for Economic Development and the Kentucky Export Initiative, the boat builder was able to dramatically turn its business around. A state grant paid for a business trip to Dubai, resulting in Stardust winning about $1.5 million in business. In addition, the company received help and financing through state export assistance programs and Kentucky Highlands Investment Corporation (KHIC).
Now Stardust has another Dubai customer for whom it is building commercial boats. “This could double our business,” Aff says.
In Wisconsin, Middleton-based biotech firm Lucigen Corp. is ramping up its exports with the help of Wisconsin Economic Development Corporation (WEDC) export programs. The company sells life science molecular and biology research tools for academic and industrial research customers.
“The company was exporting prior to using state programs,” comments Curtis Knox, Lucigen’s marketing director, adding that WEDC programs helped Lucigen expand its business, strategize its export program and even develop its products. Today, one-third of its products are exported.
“Several years ago we took a loan to help develop a product that is now the basis for major work we are doing and products we are exporting,” Knox says. Lucigen is about to embark on another loan to help purchase capital equipment.
Company executives will soon embark on a state-run trade mission to India, also supported by grants. “On two different occasions, we used grants to cover costs for exhibiting in Europe,” he says.
One program through which the company particularly benefits is ExporTech. Run by the Wisconsin Manufacturing Extension Partnership (WMEP), the program fast tracks companies to the best export markets for their products.
“We went through the full program and had a grant to pay for half its cost,” Knox reveals. “ExporTech forced us to look at our export program.” Consequently, Lucigen hired a full-time employee to focus on its distribution network of managers outside the U.S.
Roxanne Baumann, director of Engagement, WMEP, explains that each year, WMEP graduates 40 to 50 companies from the program. “We are proud to have ExporTech graduates who have won our Governor’s Export Achievement Award,” she says. “Not just for newbies, our ExporTech-graduate companies average $900,000 in export sales in six to nine months.”
Hagie Manufacturing of Clarion, Iowa has benefited from state promotion efforts. For one, the Iowa Economic Development Authority (IEDA) plays a key role in helping the manufacturer of innovative agricultural sprayers and other agricultural equipment identify prospective international business opportunities that best align with Hagie’s business goals.
In June 2013, for example, Hagie CEO and President Alan Hagie traveled with agricultural leaders, including Iowa’s secretary of Agriculture, on a USDA trade mission to Turkey.
“IEDA has also been a great resource in providing services and funding to help with the promotion of Hagie’s products in Asia,” adds Amber Kohlhaas, Hagie’s brand manager.
In addition, IEDA has conducted market studies on Mexico for Hagie. The company now enjoys a strong distributor relationship there, one that Kohlhaas says was aided by IEDA. Today, 25 to 30 percent of Hagie’s overall sales consist of exports to more than 14 countries, including Ukraine, Hungary, Argentina, China, Canada and Mexico.
Mark Cleveland, CEO of Swiftwick, a manufacturer of high-performance socks in Brentwood, Tennessee, finds his state to be a keen export supporter. For one, the Tennessee Department of Economic and Community Development, through its statewide initiative TNTrade, is charged with making Tennessee the No. 1 location in the Southeast for high-quality jobs by boosting exports of small and medium-sized businesses.
“Our governor and his team know how to create an environment that fosters the mindset that exporting is a priority,” says Cleveland. “The export support program in Tennessee is not just another resource, but a confidence builder that helps minimize obstacles. We don’t need incentives; we need the environment—the team behind us helping create the connections that result in confidence.”
Today, Swiftwick enjoys a strong relationship with Ortho Europe, which provides the company with feedback during the product-development phase of its medical compression socks designed to benefit athletes and travelers.
Cleveland particularly emphasizes that Tennessee presents an ideal geographic launching point for any domestic manufacturer with a complex supply chain. Important to Swiftwick is the fact the footprint of the U.S. textile industry is still found in the region encompassed by Tennessee, North and South Carolina, Georgia and Alabama. “That means our supplier partners are within reach,” he says. “Their shipping costs and ours are minimized, from source material to fiber conversion to construction and, ultimately, shipping finished product to the end user.” In addition, rail, air and land transportation options are excellent, as are warehousing resources. Tennessee is also in close proximity to the bulk of the U.S. population.
Among other statewide programs, the Knoxville-U.S. Export Assistance Center, a public-private partnership between the Knoxville Chamber of Commerce and the U.S. Department of Commerce, has assisted with more than $110 million in shipments to 95 countries.
“Our Export Assistance Center has also helped train more than 500 people involved in the export process,” says Doug Lawyer, Knoxville Chamber vice president of Economic Development.
Illinois Governor Pat Quinn is committed to exports. His website indicates a goal of doubling Illinois exports by the end of 2014. “One of the ways we will achieve this goal is by offering increased export services, programs and training to our small- and medium-sized businesses, enabling them to grow into markets outside of the U.S., through the Illinois Department of Commerce and Economic Opportunity’s (DCEO) Office of Trade and Investment (OTI), our Illinois Small Business Development Centers’ International Trade Centers, Illinois’ Department of Agriculture and other partners such as the U.S. Department of Commerce,” he writes.
In particular, Illinois’ State Trade and Export Promotion (ISTEP) program provides Illinois’ small- and medium-sized businesses with financial and technical assistance to raise the dollar value of their export sales. ISTEP includes three options for Illinois companies to grow their export sales: group trade missions, individual foreign market sales missions and assistance to achieve product compliance certifications.
“Through the DCEO-OTI program, our company is on the right track to expanding our international sales efforts,” writes an official with Smart Medical Technology of Darien, Illinois, which participated in the Arab Health 2013 group trade mission. “With the introduction of matchmaking services to our marketing platform, it may allow our small domestic business to transition to a very large international business.”
Louisiana companies benefit from state programs in export promotion and training arranged by either Louisiana Economic Development (LED) or the U.S. Commercial Service. Companies also benefit by participating in the State Trade and Export Promotion program (STEP). Geoshield LLC, a Baton Rouge-based maker of window coatings, is one such company. Through STEP, the company was reimbursed $4,000 in trip-related expenses for a week-long meeting with clients in Saudi Arabia, Oman, Qatar and other Middle East nations. The trip resulted in renewal of a five-year, $1 million-plus deal.
“If LED hadn’t provided support, we wouldn’t have gone,” says Burns Mulhearn, Geoshield president.
Launched in 2012, STEP provides $5,000 to $6,000 in reimbursement of export-related travel and expenditures; up to $9,000 for higher-tier markets such as China.
MISSOURI’S SWEET SPOT
When Shawn Askinosie decided to get out of the criminal defense lawyer business, he turned to manufacturing artisan chocolate. Right from the beginning, this small batch, bean-to-bean chocolate maker built relationships with the Missouri Department of Economic Development’s (DED) team at the Missouri International Trade & Investment Office. As a result, Askinosie Chocolate exports to Scandinavia, Canada, Hong Kong, Japan and Australia.
“That team contacts us when there’s an opportunity internationally,” he says. “We contact them when we need contacts in other countries or have super complicated questions.”
Besides offering trade counseling, agent/distributor research, information on business protocol and customized market research, the trade office assists in accessing SBA trade finance programs, providing details on upcoming trade shows and planning and offering customized trade missions.
Minnesota Trade Office is also in on the exporting act, with its STEP program available to provide export assistance and financing for small and midsized companies. Experts are available in the areas of medical, healthcare and environmental and energy industries.
Small businesses may apply for reimbursement of up to $500 for export training that results in the development of an export strategy, or up to $7,500 for approved export-development activities, including participation in trade missions, exhibiting at trade shows or industry-specific events, translation of marketing materials, development of foreign language websites, matchmaking services, company-specific international sales activities and testing or certifications required to sell products in foreign markets.
Best states for manufacturing