Export and Thrive
Don’t leave money on the table. That’s exactly what you could be doing if your manufacturing business isn’t at least staying open to the idea of expanding from a local, regional, or national presence to a global footprint. Did you know that exports of manufactured goods from the United States to other countries were over $1.4 billion dollars in 2014? That’s according to The International Trade Administration and U.S. Census Bureau.
Why shouldn’t your business have a piece of the pie? D. Paul Zito is the Vice President of International Development at Toledo’s Regional Growth Partnership. We had a chance to ask Paul about opportunities available to businesses in Northwest Ohio ahead of a September 2017 event offered in Cleveland by the U.S. Department of Commerce called Discover Global Markets.
Our first question for Paul: Is now a good time for Ohio manufacturers to consider expanding beyond the U.S. and If so, why?
Paul: Yes it is. Some 80% of the population and commerce are located outside of the US. Failure to consider exports is very much a lost opportunity. The growing middle class and developing industrial base in countries such as India, China, Mexico and others in Asia, the Middle East and Latin America have created a great demand for finished US goods and industrial equipment, parts, components and systems. In Europe, Australia and Canada the move to Industrie 4.0 (automation, IOT-Internet of Things, etc.) has created a great demand for quality US machinery, components and parts. Perhaps most importantly, having a good export market protects US companies from any downturns that they may experience in the US market- a good way to spread risk.
Speaking of risk, what are the risks associated with expanding internationally?
Paul: Risks include: Intellectual Property risks (counterfeits, theft of technology); currency exchange risks; lack of efficiency with international payment instruments (international wire transfers, Letters of Credit….) and overseas remittances; overseas tax issues; and credibility of overseas customers/distributors. That is why I always say that in exporting or any international business scenario, one needs to have a very good banker, lawyer and accounting/tax firm. GJM with its long and broad experience in international business and with the resources provided by the RSM network is perfectly positioned to counsel exporters on tax and financial issues as well as general information on overseas markets. I have seen the RSM network in action around the world and it provides a wonderful resource in many respects for exporters.
How do you know when it’s time as a manufacturing business to start exploring exports?
Paul: A variety of ways. When staffing and production capacity allow for servicing and supplying a new market. When one learns something about demand from another country. Perhaps the best time is when a manufacturer meets a potential customer or distributor from another country that is motivated and seems to be on the same page as the US manufacturer with regard to how they approach the markets in their own country/region. Great opportunities for such meetings can be had at just about any major US trade show or conference in any industry.
What is the US commercial Service and how does it help businesses?
Paul: The US Commercial Service (also called “Foreign Commercial Service”) is part of the US Department of Commerce and is comprised of personnel at the US embassies and consulates around the world along with the staff in Washington and staff at various locations around the US, including Cleveland. The US Commercial Service conducts research in other countries for US businesses and can perform agent, distributor, customer and partner searches in other countries. The website for the US Commercial Service is a great resource with country commercial guides and industry-specific briefings around the world.
Can you think of some local/regional companies that have recently expanded internationally and were successful?
Paul: Dana Corporation. See: http://www.toledoblade.com/business/2017/06/25/Dana-gears-up-for-off-road-markets-Maumee-company-known-for-auto-parts-makes-components-for-huge-Ferris-wheel-more.html. Though this is an international acquisition and not exporting, it illustrates the new markets that the acquisition brings to Dana.
Bionix. See: http://www.toledoblade.com/local/2012/05/18/Exports-from-Toledo-on-rise.html. Though this story is five years old, their exports continue to rise.
What kinds of opportunities are available for businesses attending the Discover Global Markets event? What will they learn? Who will they meet?
Paul: The chance to meet with companies, agents and consultants from around the world; an opportunity to learn about a wide array of export issues; and the chance to meet with US Commercial Service staff from around the world. Businesses will also benefit from meeting companies from across Ohio and the US who could be potential partners and/or good resources for their export strategies.
What types of businesses would you encourage to attend the Discover Global Markets event?
Paul: I would encourage attendance by any company that is new-to-export or that has been exporting but wants to expand their export markets and learn how to create greater efficiencies in their export strategies and processes.
Any final thoughts?
Paul: It has been said “export or die”….I prefer to say “export and thrive”. Statistics show that exporting companies are more stable and more profitable than companies that do not export. Exporters are generally more “healthy” than companies that do not.
Gilmore Jasion Mahler’s Manufacturing Specialist Group works with many manufacturing businesses across the region and offers manufacturing roundtable events three times a year to manufacturing CFOs. If you're the CFO or financial decision maker within a manufacturing business and would like to receive invitations to future GJM roundtable events, you can sign up here. Please note in the message section that you'd like to receive Manufacturing & Distribution Roundtable invitations. Recent roundtable topics include the skilled labor shortage, 2017 economic outlook and post-presidential election crystal ball. GJM Manufacturing Specialist Group lead Charlie Heid recently joined the Regional Growth Partnership International Committee.
Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers comprehensive financial services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities. Follow us on LinkedIn, Twitter and Facebook.