Ohio Companies Banking On Exports Program
During the last presidential debate of the fall campaign, President Obama called attention to his National Exports Initiative launched in 2010, and said he will keep up efforts to help businesses expand into foreign markets. The initiative aims to double exports by 2015 to $3.14 trillion dollars, and some Ohio companies are preparing to make the leap to the next step. Kimberly Ullner founded her specialty food company, 1-2-3 Gluten Free, eight years ago. Sheâs since seen interest in gluten-free products flourish, and her products are now found in most of the U.S. Now the Orange resident says sheâs ready to take her products global âThe European Union, Central and South America, and the Middle East," Ullner says. Of course, thereâs a lot involved in shifting to the export market Labels need to be translated into foreign languages and converted to different measuring systems; thereâs special packing and shipping arrangements to be figured out; and meetings with international clients can become diplomatic fiascoes if certain cultural norms arenât followed. But Ullner says if she can make it overseas, itâll pay off.
The diversification with being in the foreign markets is very helpful, it allows us as a company to ride through tougher economic times here.
âIf a company has about 30 percent of their revenue from export, theyâre basically recession proof," says Nate Ward, director of the International Trade Assistance Center at Cleveland State University. He says with 70 percent of the worldâs purchasing power outside the U.S., thereâs ample territory for companies to tap into. âExports still just account for under 14 percent of our Gross Domestic Product," Ward says. "Germany by contrast - the largest economy in Europe - 40 percent of their GDP is in exports. So thereâs lot of opportunities left. Itâs a matter of determination, and focus.â? Money and guidance donât hurt either. Ward says his staff can help companies learn about financing, grants, and other nuts and bolts of moving into exports. And Susan Whitney, Office Director for Clevelandâs U-S Exports Assistance Center, says her staff works directly with 200 regional companies a year, to find potential partners overseas. Hearing her talk about being shrewd and choosy, it almost sounds like dating.
A lot of time companies will go with the first company that talks to them, and eventually when their sales grow and they realize that they should be selling more, that may actually limit the amount that they can sell in that country. Then they have the problem of trying to get out of a business relationship.
Michael Knoblauch has learned much in exporting his product to China. Heâs CEO of DVUV, a Cleveland company that applies specialized, colored coatings to wooden furniture and similar products. Today, his workers are finishing teachersâ desks. âThe heat bonds it, the electro-static applies the powder..." Knoblauch says exports make up between 10 to 20 percent of DVUVâs annual volume. He says he first began exporting to China almost a decade ago, after deciding it provided a great opportunity for his company to grow. His immediate advice for companies? Invest heavily in quality control, when shipping your goods.
`Cause what you donât want to have, is your product arrive and be deemed unqualified...
And by âunqualifiedâ?, Knoblauch means damaged. â..now youâve got significant business problem because your customer doesnât have product to use to sell to their customers," Knoblauch says. Other advice? Research your potential markets. Ron Swinko is CEO of Jet Wastewater Treatment. Its business fluctuates along with home construction. After joining the company in 2010, Swinko pushed hard for exports, which now account for one-fourth of Jetâs revenue. His company has sold wastewater treatment systems in the U.S., but looked into Mexico, Latin America, and Africa when domestic housing took hits in 2009 and 2010. âWe saw international sales and exporting as a way to not only offset that, but also take some of the seasonality out of our business. Housing construction in the U.S. tends to be seasonal, in the developing countries the seasonality doesnât really exist there, because weather allows for construction year-round.â? Swinko also advises companies to assess the competition, as many consumers in foreign countries like to buy locally. As for helping economic growth, a recent report by the Brookings Institution shows exports created nearly 600-thousand jobs in the U.S. between 2009 and 2010, with roughly a fourth of those in Ohio.