Unalloyed success
Back in the early 1930s, when Garfield Edmonds made a loan to some friends to help finance a small machine shop, little did he know that he would soon be a partner in the business. Years later, his grandson, Bill Edmonds, would become a third-generation partner and the international sales manager of what is now a family-owned company, B&G Manufacturing of Hatfield, Pa. (www.bgmfg.com).
Among other things, the company manufactures high-strength, high-temperature "super" alloy fasteners that are based on nickel and used to hold components together in power turbines. B&G's product line also includes a machine that makes the bolts used to join the flanges at the ends of pipeline segments.
B&G began exporting on its own in the 1970s and a few years later heard about the U.S. Commercial Service from a business partner. Edmonds says his first stop was the U.S. Export Assistance Center in Trenton, N.J., where he reviewed his product line and market objectives with a Commercial Service trade specialist.
"We make parts that must endure high stress and extreme temperatures, much like you would find in a jet engine, only on a bigger scale," explains Edmonds. "Some of our fasteners can be held in your hand; others are large bolts that weigh up to a half-ton."
Why did Edmonds make that first visit to Trenton decades ago? He remembers being convinced that his potential prospects of selling to Mexico and Europe were good but realizing that he needed export counseling and market research to advance the process—or, as he says, "to put B&G over the top."
Soon afterward, the Commercial Service began working with B&G to develop entry-level market strategies for each of the countries it wanted to target. The firm was given—free of charge—analyses of the countries' energy sectors, current and future market prospects, and leads on proposed energy projects.
According to Edmonds, he next signed up for the Commercial Service's Gold Key Matching Service and flew out to the specified countries to meet with several potential agents and distributors. Prior to his departure, Gold Key Service employees prescreened the prospects and arranged the meetings, which ultimately led to sales of fasteners to Mexico, Italy, France, and the United Kingdom.
"[This step] would have taken much longer, had I made it alone," says Edmonds, "One of the biggest advantages of using the Gold Key Service is the first-hand market intelligence and leg up on the competition it provides. They enabled me to better understand my target markets and the challenges my potential customers face in them. Being able to see the landscape from a customer's point of view is always good for business."
For example, Edmonds says he has gained insight into foreign distribution mechanisms, the financing and supply-line aspects of how particular markets work, and the ability to evaluate competition in markets. He adds that involving his firm in international trade has allowed it to retain jobs at its manufacturing facilities.
Passage to India
Smitty Ovitt, Asia-Pacific Director of Xantrex Technologies Inc., has a knack for converting sales leads into export sales. But when it comes to converting electrical energy, he leaves that to his company's line of products. Among the advanced power equipment that Xantrex (www.xantrex.com) designs and builds are inverters that convert the DC power generated by solar cells and windmills to AC, making it compatible with transmission and distribution grids.
In 2003, not long after Ovitt had established a relationship with the U.S. Export Assistance Center in Oakland, Calif., he received a call from the center. "We were told that a delegation of Indian buyers was arriving on the West Coast as part of a trade mission sponsored by the Commercial Service in New Delhi, India, and its partners," Ovitt remembers. "I was encouraged to meet with the delegates and saw it as an excellent opportunity to ramp up my export sales to India."
Sensing opportunity, Ovitt agreed to the meetings and was prepared for them by the Commercial Service. He was told of the new renewable energy subsides such as investment incentives and tax breaks being offered by both New Delhi and state governments. Separately, Commercial Service trade specialists thoroughly briefed the Indian delegation on what U.S. firms like Xantrex had to offer them.
"India had not been at the top of our list of potential export markets," Ovitt admits. "But the trade mission and the counseling really made clear the huge business opportunities it offers. We were incentivized to pursue Indian sales opportunities, and we have nurtured business relationships that have continued to develop through additional visits by Indian delegations, most recently in August 2006."
Ovitt couldn't be selling to India at a better time—India's renewable energy market is estimated at $500 million and is experiencing annual double-digit growth.
"As a medium-sized company with the majority of our resources devoted to North America and Europe, it would have been difficult to sell to India on our own," Ovitt says. "We found the contacts and insights provided by the Commercial Service to be invaluable."
Today, having sold a substantial number of inverters to India, Ovitt takes pride in his company's contribution to renewable energy's worldwide inroads on fossil-fuel combustion. He thinks globally, while his Indian customers act locally. One customer—Team Sustain Ltd., a provider of "green" engineering solutions—is using Xantrex equipment to improve the efficiency of hotels and other buildings with environmentally friendly heating and cooling systems.
"Exporting has become increasingly important to our company's overall growth," Ovitt realizes. "Our experience with India will definitely be helpful as we look to expand our export sales throughout Asia."
Spanning the globe
After earning a degree in electronic and telecommunication engineering from an Indian university a few years ago, Alok Mandal took on another challenge—selling overseas as director of export and transit sales for Virginia Transformer Corp. (VTC). "It's a great time to be exporting," he says, "and I'm busier than ever."
Based in Roanoke, Va., VTC (www.vatransformer.com) is a minority-owned firm that manufactures custom transformers used by firms in the mining, petrochemical, steel, paper, mass-transit, and electric power industries (Figure 3). Its product line is broad, encompassing everything from two-ton step-up and step-down distributions transformers working at 440V and 240V to 100-ton, 138-kV units suitable for a regional transmission grid.
3. Transforming the world. A voltage converter from Virginia Transformer Corp. awaits installation at an infrastructure project. Virginia Transformer Corp.
VTC began by selling its transformers strictly in the U.S. By the early 1980s, the company had booked its first export sales and was looking to expand its international presence. To do so, Mandal contacted the U.S. Commercial Service in Richmond, Va. He credits the partnership for VTC's first win in a new country—Mexico. But much more was to come.
"About six years ago, we knew Mexico had great potential for us, but we needed to better understand the finer points of doing business there," Mandal recalls. "Our man in Richmond alerted us that the Commercial Service in Mexico City was sponsoring a series of business seminars on Mexican contract law, export licensing, customs, and other issues. We attended them all—I think it was one of the best business decisions VTC has ever made—and by our second year in the market we had doubled our annual export sales to several hundred thousand dollars."
Buoyed by the success, VTC decided to use the Gold Key Matching Service to expedite its entry into several unfamiliar markets—Jordan, Kuwait, the Philippines, and the United Arab Emirates (UAE). The counseling and prescreening of contacts paid dividends in the form of a big contract with Jordan's state-owned power company and deals with new distributors in Kuwait, the Philippines, and the UAE.
According to Mandal, VTC's most promising export markets continue to be Mexico and Canada. But he also sees great potential in Central America and the Caribbean. "In exporting, growth is the name of the game, and our sales overseas have expanded more than 400% over the past decade," he says. "We now have customers in over 40 countries, and their purchases are directly responsible for many of the local jobs we've added."
Mandal's advice for would-be exporters? "Don't be afraid to take the leap. Pinpoint your target markets, determine how you'll balance your export business with your domestic business, and then call your local U.S. Commercial Service office to help execute your strategy."
—Israel Hernandez is assistant secretary for trade promotion and director general of the U.S. Commercial Service. More information on the trade promotion unit is available by visiting www.ita.doc.gov/cs or calling 1-800-USA-TRAD(E). The U.S. Government's Export Portal is located at www.export.gov.
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