Beth Pomper's looking for businesses from Kent County to join on a trade mission to Canada from Feb. 29- March 3. It will stop into Toronto and Montreal and be one in a series of missions organized by Global Delaware to introduce local businesses to possible export markets.
Painted Stave Distilling in Smyrna just celebrated two years in business. After launching a new whiskey and selling their spirits across the state, owners Ron Gomes and Mike Rasmussen are now considering a new step: selling abroad.
It turns out their vodka, whiskey and gins have some overseas admirers.
“There’s been expressed interest [from abroad], and we’re exploring the opportunity to export our products to the UK and India,” said Gomes. “As emerging and growing markets for craft distilling, we think the time is right.”
Making this a reality isn’t without hurdles, however.
“Cash is a huge obstacle,” he said. “While our products meet industry standards abroad, our packaging, for example, does not. So, distribution abroad will require new bottles and labels.”
“Brand management is also a concern, given that we don’t have boots on the ground to tell our story and directly engage the consumer.”
There’s promise and there are pitfalls to sending a piece of Delaware abroad.
♦ $2.34 trillion record setting value of US goods and services exports in 2014
♦ 11.7 million US jobs supported by exports in 2014, up 1.8 million since 2009
♦ Delaware exports bananas, despite not growing them. Wilmington is the top port in the US for South American fruit, and its largest refrigerated port.
♦ 86% of Delaware exporters that are Small-Medium Enterprises (<500 employees)
♦ 1,627 companies exported from Delaware in 2013
♦ $5.3 billion 2014 total exports of merchandise from Delaware
SOURCE: Department of Commerce
Beth Pomper, export adviser for the state’s international economic development office, Global Delaware, says there are plenty of tools of the trade to navigate challenges.
She’s looking for businesses from Kent County to join on a trade mission to Canada from Feb. 29- March 3. It will stop into Toronto and Montreal and be one in a series of missions organized by Global Delaware to introduce local businesses to possible export markets.
“We are actively looking for new companies that haven’t exported, or who want to expand,” Pomper said. “Right now, we have no one enrolled from Kent County and would love to have some. We can give them a grant to pay for half of their travel and Canada’s a nice logical first step, especially for a small business.”
DELAWARE'S TOP 5 EXPORT MARKETS
♦ Belgium ($869 million) - Canada ($628 million) - United Kingdom ($488 million) - China ($456 million) - Germany ($390 million) - SOURCE: Department of Commerce
♦ Companies interested in a trade mission or applying for an export grant can find more information and the application on the Global Delaware website at global.delaware.gov/expand.
Global Kent? In 2014, Delaware exported an estimated $5.3 billion of U.S. made goods to the world – supporting approximately 23,278 jobs.
While export statistics aren’t measured at the county level, metropolitan Dover alone exported $94 million in goods in 2014.
Kent County hosts a number of multinational manufacturers that do international business – Perdue, PPG, Kraft, Proctor and Gamble, and Playtex to name a few – but it has native companies that export, too.
ILC Dover, a high-tech materials manufacturer well known for its NASA-bound spacesuits, also ships out flood gates for the New York subway, and gas and chemical masks to Israel.
HandyTube Coproation, formerly Camdel Metals, manufactures a wide range of stainless steel tubing products in Camden for use in industries ranging from alternative energy, to healthcare, shipping, and oil and gas.
“Most of our business outside the United States is in Asia or the Middle East, mostly in energy purposes,” said Walter Brooks, sales and marketing VP. “They might go to Dubai, China, Korea.”
So there’s a good chance the metal tubing used in a refinery or petrochemical facility in the Emirates is made down the road in Camden.
“Guaranteed,” said Brooks.
While HandyTube has been around a while, however, it’s a relative newcomer to export.
“We’re still getting our feet wet; from a global standpoint, we’re in our infancy,” said Brooks. “HandyTube is primarily a North American company, and we’d been comfortable being that for quite a long time.”
The shift came in 2012 and 2013, when a booming energy sector presented an opportunity. To capitalize on this and diversify its business was a prime draw when taking the leap to exporting, said Brooks.
“When you look at business, we didn’t want all our eggs in a basket,” he said. “The paradigm of business is that it tends to shift occasionally. So you have [times] where see an uptick of business in the U.S., and the next year or the next few years, there’s a lull. But while that lull is going on in the US, there could be an uptick in Asia. So we started paying attention to that and saw that the market didn’t really go away, it just shifted, and we wanted to be able to take advantage of those shifts.”
Brooks acknowledges there are potential hazards.
“For example, the [slowdown] issues with the Chinese economy,” he said. “There’s always risk.”
Making the leap Despite the potential challenges, Global Delaware’s Pomper says there’s much to be gained from expanding abroad – where 95% of the world lives (and buys).
“Many companies, after they get started in exporting, more than you’d think, their international sales would be greater than their US sales,” she said. “And it can extend a product’s lifecycle; what might be an old familiar product to us might be new and exciting in another country.”
Michael Rossi, a lender relations specialist at the Small Business Administration who helps small businesses find export financing, says for many small businesses, the transition can come quite naturally.
“A lot of our businesses here in Delaware, they’re on the Internet, so they do one-off orders here and there, where they wind up taking product orders for businesses overseas off the Internet, and it’s just a matter of whether they want to turn that into a routine or not,” he said.
Tools of the trade (mission) For those businesses ready to explore, there’s no shortage of resources.
The state’s export outreach team brings together a roll call of trade organizations, including: Global Delaware, the SBA, the Delaware Economic Development Office, Delaware Manufacturing Extension Partnership, World Trade Center Delaware, US Commercial Services, and the USDA.
“It can be a complicated procedure to export, depending on your product, whether it needs a license, what it needs overseas, and that’s where our various partners in export outreach come into play,” the SBA’s Rossi said.
The export transition can be intimidating, said Pomper.
“We work with companies, to set them up, to take away the fear,” she said. “The reason most companies don’t export is they think, ‘Oh my goodness, I’m not going to get paid.’ They’re frightened. And there’s no reason to be frightened. Because there are so many resources out there in our state that will help small and midsize companies. So we have resources to take the sting out of it.”
“If you’re a little company, we’re going to pick a few target markets for you to start. Maybe one, two at most.”
Step right up In August, the Small Business Administration awarded Global Delaware with a State Trade and Export Promotion (STEP) grant of $276,000 to support export growth efforts. The grant can help with making first moves to enter a new market by reimbursing eligible Delaware businesses for expenses such as international travel, trade shows, international marketing materials and interpreters.
With those funds, Global Delaware is conducting four dedicated trade missions, to Mexico, Germany, Canada, and South Korea.
“Those are four countries that Global Delaware felt local businesses could be very successful utilizing these funds for,” said Rossi.
There have already been successes, Pomper said.
“We had a very successful mission Sept. 29 to Oct. 3 in Mexico; $2.9 million in sales are projected over the next year as a result of it.”
In addition, Delaware recently contracted with four representatives, based in each of the above countries, who met with local businesses at a November workshop and followed up with some on site visits.
The STEP grant also funds DMAP’s ExpoTech, a three-month intensive program for three to six businesses. Participants develop an international business trade plan, go through all kinds of training, and receive guidance from the state’s export outreach team.
Financing is usually the end piece of the puzzle, said Rossi.
“Often times a business’ll turn around and say, ‘I got this big order, and I need capital for x amount of widgets.’ And that’s where the SBA’s financing programs will come into play.
“We have very simple financial products that we offer; they’re one size fits all, depending on the needs of the business. If you want to work in say, Brazil, and you want your website converted to Portuguese, we have smaller lines of credit for that. Then there’s larger lines of credit available for various stages like marketing, and then there’s working capital programs as well for the more expensive things – materials to make a product, or even a new building in a facility.”
Global Delaware, meanwhile, also works with the EXIM Bank – reauthorized by Congress last week after a five-month hiatus. The latter will guarantee payments.
‘No wrong door’ “There’s no guarantee [the STEP program] is going to continue. So if you want to export, this is a good time to do it,” said Rossi. “We have what’s called a no wrong door policy, if you contact any of our partners, if we can’t immediately help you, we’ll set you up with someone who can.”
“All you have to do is call one of us, and we’ll get you what you need,” she said. “If they can’t do a trade mission or export tech, they can come in any time. They can meet with us free of charge, we can give them complementary consulting. We can help them along the way.”