The VEDP has turned a new corner—we now not only have integrated our services towards service exporters fully—not as an exception, but as a rule—and we have a case study to prove it.  Colleen Jolly, Principal at 24 Hour Company is the first VEDP client to successfully complete the VALET program, and immediately turn around and become a program partner, to share her successes, triumphs, and pitfalls circumvented (and some maybe not!) that are a natural part of the contact sport known as exporting.

24 Hour Company is a graphic design company that “translates” (so to speak) companies’ capabilities into formats pictorially that make sense to people procuring those services.  And by “people” we mean major government and corporate institutions, shifting through dozens of like bids.  Their touch can and often does make the difference, and dramatically increases the chances of winning the tender.  When I first met Colleen, she wanted to use our help to expand and open a UK office.  Now, she has successfully done that, hired two employees there, has been with us to Australia and cultivated successful partnerships there, and has been to South Africa.  Not to mention the increase in revenues that this has brought into the Commonwealth….  And what is better from our institutional point of view, is that no one is any longer surprised.  We expect to be able to assist companies like this, and we do.

Colleen may be a recipient of Washington’s Top Ten under 30, but she has a lot of wisdom to pass on.  And not surprisingly, she boils it down to the basics.  You love to travel?  You understand this is an integrated, global, non-monolithic world? Incorporate that into your business and its strategy.  Don’t know where to start?  Ask for help from anyone and everyone.  Be open.  Start with what seems easiest.  And start locally.  And most importantly, don’t be afraid to ask.  As Colleen recently stated, “I did not wander around the Internet bemoaning the people who seem to have all the luck—I asked.”

The good news is that there are plenty of resources out there, and that there are plenty of knowledgeable people to ask.  The VEDP has resources in 45 countries, and takes about ten trips a year abroad.  Don’t make it harder than it has to be!

The best part of all is that by integrating successful companies like the 24 Hour Co into our “family” of clients, VALET alumni, and program partners, we now also complement what we have to offer clients.   The experience of shortcuts and lessons learned.

To learn more about Colleen’s experience, click here.

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As your company considers its export strategy for 2012, you may want to include South Africa on your list of potential target markets.  South Africa has emerged as an important economy for US exporters and offers a unique combination of a highly developed economic infrastructure with a vibrant emerging market economy.  In April 2011, South Africa joined the BRICS alliance of the world’s most important emerging economies (Brazil, Russia, India and China round out the list).  While the country’s economy and population may have a long way to go to rival its BRICS counterparts, South Africa is still a significant market with great potential by itself, or as a jumping off point for accessing the one billion consumers on the African continent.

South Africa presents a number of advantages to Virginia companies looking for new international sales opportunities and chief among these is the ease of doing business there.  English is the language of business and the country has low import duties and relatively uncomplicated regulations for products entering the market.  In addition, South Africa has a sound and stable economy, well developed infrastructure, and values the rule of law in business transactions.  These claims cannot be made for a lot of other emerging markets, such as Brazil and China.  In fact, South Africa ranked 35^th out of 178 countries in the World Bank’s 2008 Doing Business report, which measures the time, cost and hassle for businesses to comply with legal and administrative requirements.

Added to these advantages is the fact that South Africa is a major importer of diverse products from around the world, making it a great target for exporters in a wide range of industries.  Some of the best opportunities for Virginia exporters selling to South Africa are in the following sectors:

• Computer software and services
• Pharmaceuticals and health care
• Security and safety
• Telecommunications
• Water and wastewater treatment
• Mining equipment
• Railways

So whether you’re ready to jump on a plane to Johannesburg but need help finding sales partners, or would just like to know more about the potential for your specific product or service in South Africa, contact VEDP International Trade.  We have two perfect options for you:

• Join us on a VEDP-led trade mission to South Africa, May 7-11, 2012. During this five-day trip you will have your own personal itinerary of meetings with qualified South African sales partners and/or customers, as well as networking receptions.  Register here.

• Have our market research consultants in South Africa provide you with a market assessment, so you’ll know whether this is a good target for your company.  Contact your local VEDP trade manager to get started!

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The following conditions have accelerated making the 2012 HS Reform a perfect storm to derail a company’s supply chain:

1. total world trade volume has nearly doubled since the last reform in 2007
2. the number of regional trade agreements has also doubled
3. automation in international trade is far more prevalent
4. increased government oversight/regulations.

Preparing now for the looming changes can help businesses avoid a slowing of the international purchase-to-delivery supply chain, incorrect tariff classification of goods, incorrect declarations of duties and taxes due, and inaccurate records.

Join this free webinar to learn 5 ways CiGDM can help you be prepared: concordance tables, Customs Info re-classification tool, screening reports, integrated with Classification Desktop™, and Outsource service.

Speakers: Ron Lackey, President, Customs Info, Matt Gersper, President, Global Data Mining

Sign up for this free webinar here.

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In order to gain and maintain market share, a company must be competitive.  Mediatech, Inc., knows this all too well. Based in Manassas, Virginia, this company was searching for ways to handle the increasing number of international sales while maintaining a competitive price point. To do so, the company employed a key strategy: revamping shipping methods to reduce costs.  Mediatech manufactures and supplies cell culture and molecular biology reagents to academic and government research facilities as well as biotechnology companies. Its diverse product portfolio includes cell culture media, basal salt solutions, antibiotics, sera, specialty media and flexible packaging systems. Additionally, Mediatech provides custom-manufactured media and other sterile solutions for a number of uses. These products and services are provided by Mediatech, Inc., under the cellgro® brand name. The international market for these goods makes cost-effective shipping essential.

Mediatech, Inc.’s competitors are typically billion-dollar companies already well established in international markets. Mediatech’s (180+ employees) obstacle was to find a way to compete in the global marketplace against these much larger companies. High freight costs have always been an obstacle for its international shipments—oftentimes the freight was double the cost of the product. As a participating company in the VEDP’s VALET program, Mediatech asked the VEDP for suggestions on shipping alternatives to present to its distributors. The VEDP provided Mediatech with several alternatives, along with a comparison between ocean and air costs.

Mediatech’s distributor network typically included small distributors that were not able to do large orders. Learning about ocean freight containers allowed Mediatech to extend a cost-saving bulk shipment opportunity to three of its largest international distributors. Being able to provide its business partners more competitive freight rates and more product, to be stored at their warehouses, allowed distributors to service their customers with a one-day turnaround. With 30 existing distributors around the world, Mediatech is now using this more cost-effective shipping method to assess its future distributors by requiring new distributors to have warehouse facilities to accept products in bulk. By leveraging resources provided by the VEDP’s VALET program, a Virginia company has been able to grow business and effectively compete against large, international companies at a time when cost-based pressures and market competition are more intense than ever.

For more information on Mediatech, Inc., or cellgro®, please visit www.cellgro.com.

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Deciding to go international is a big step for any firm especially small and medium enterprises (SMEs). All companies, big and small, are challenged by the next step – choosing an export destination for their goods or services. For smaller companies the difficulty in choosing the right international market is exacerbated by limited resources [time, money, and personnel] and lack of quality information on global markets. This combination results in many companies following the leader and entering Brazil, Russia, India or China and justifying their decision with the mentality “but everyone else is doing it!” Under no circumstance should this validate a strategic decision. Understanding the market and submarkets within a country should be a key priority for any firm. This recognition of subtle submarkets differences can differentiate between a positive and negative experience for a business.

The importance of this strategic thinking is highlighted in the April 2011 McKinsey & Company article, “Is your emerging-market strategy local enough.” The commentary provided by the consulting company illustrates that China, India and Brazil challenge the one-size-fits-all method employed by many SMEs. This mistake results from the limited resources and lack of quality information mentioned previously. The McKinsey article features simple strategic decisions for the three emerging-markets:

China – Utilizing an entry strategy that focuses on city clusters instead of city size. The analysts identify similar cities and cluster markets based on consumer preferences as opposed to population amount. This helps smaller companies understand the submarket similarities and differences which can make accessing Chinese markets simpler and more effective.

India – The consultants recommend the hub and spoke approach to access the more disperse cities of India. The report emphasizes the importance of Mumbai’s economy – by 2030, Mumbai is expected to be larger than Malayasia’s economy is today.

Brazil – Many companies have focused on the large metropolitan cities of São Paulo and Rio de Janeiro with an abundant source of consumers. However, many of the states in the northeastern part of the country have been overlooked and are less competitive than the cities in the south.

For more information about these submarkets and to access the report, click here.

Brazil · China · economy · Emerging Markets · export · exports · India · international business · international deals · international sales strategy · manufacturer · service exporter · VEDP · Virginia

In keeping with Virginia’s top ranking as a business friendly state, there is good news to report regarding Virginia’s service sector exports—a 7.4% annual increase from 2001-2009. Not only did Virginia’s growth in service exports eclipse Virginia’s growth in manufactured goods (1.4% for the same time period), it also out-performed the national gross domestic product (GPD) growth rate of 4.7%, as well as Virginia’s 5.3% growth in gross state product (GSP). In a recent study commissioned by Virginia Economic Development Partnership – International Trade and carried out by Chmura Economics & Analytics, many additional, significant points were noted regarding Virginia’s service exports.

Service exports in Virginia totaled $11.2 billion in 2009. Certain industries lead the Commonwealth in service exports, with transportation and warehousing accounting for $2.5 billion or 22.7% of all services exports from Virginia in 2009. Wholesale trade ranked second, with $2.1 billion in 2009. Rounding out the top five services exports in 2009 were professional and technical services ($1.8 billion), management of companies and enterprises ($1.5 billion) and finance and insurance ($1.2 billion.) Service exports encompass a variety of industries: information, communications, security, financial services—and many other industries.

Northern Virginia leads the Commonwealth in both the number of service exporters and the amount of services exports. Of the Virginia service companies identified as exporting, 48% are located in Northern Virginia. In 2009, the most current year for which service export data is available, Northern Virginia was responsible for $5.3 billion, or 47%, of Virginia’s total $11.2 billion in service exports. Following Northern Virginia in service exports were the Eastern and Central regions of the Commonwealth, each with $2.1 billion in exports. Interesting to note regarding the South Central region (Lynchburg, Roanoke and surrounding regions) of the Commonwealth is that although it did not realize the same volume in exports as Northern Virginia, Eastern and Central portions of the Commonwealth, its growth in exports outpaced those regions, with a 9.5% increase, as compared to 6.6%, 8.9% and 7.3% growth, respectively.

Key factors that indicate if a company is more disposed towards exporting include the size of the company, the industry and the geographic location within the Commonwealth. Larger companies with greater resources are more likely to export, as they have more capital and human resources to engage in export activities. Industries such as space research and technology, national security and finance tend to export more. Industries that possess a competitive advantage are more likely to find demand for their products in a global market. Geographically speaking, companies located in communities with four-year universities are more inclined to export. This is possibly due to access to foreign students and faculty reaching out to foreign markets as well as companies gaining knowledge of foreign languages, cultures and customs through university contacts. Additionally, companies with employees having a higher level of education are more likely to export. Higher education may contribute to greater entrepreneurial activity and global thinking. Infrastructure factors such as the presence of interstate highways and proximity to airports, which are important factors for exporting manufactured goods, do not play a significant role in a service company’s propensity to export.

While exports in manufactured goods are still larger than service exports from Virginia, the transition of the U.S. economy towards a service-oriented one, as well as the rise of high-tech service industries, has increased the role of service exports in the global competitiveness of Virginia. Paul Grossman, Director of International Trade and Investment at Virginia Economic Development Partnership, says “Virginia is fortunate to have so many service companies committed to selling their services to international customers. The VEDP provides these service exporters with the tools necessary to close the deal on international sales. The result is economic growth and more jobs for Virginians.”

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1: The creation of jobs will help the Commonwealth regain a stable and strong economic recovery. Virginian’s not only have the support and encouragement that they need at the VEDP’s Division of International Trade, they need to consider exporting to stay competitive.
2: Great programs for the seasoned exporter! VEDP’s VALET (Virginia Leaders in Export Trade) Program is an award-winning program assisting companies throughout Virginia in expanding their international business. VALET offers a powerful combination of capital resources provided by the state along with professional services from expert, private-sector partners. Each year, 25 qualifying companies ramp up their global marketing efforts through this program. Companies graduate from this comprehensive, two-year business acceleration program with greater focus on the potential of export trade profits
3: A must for Virginia trade leaders! The VEDP will host the 63rd Virginia Conference on World Trade, October 26-27th, at the Norfolk Waterside Marriott. Closing Deals- the Dos and Don’ts of Getting to Yes is the theme this year. We will explore tangible ways to negotiate international deals. Whether you are looking to expand your distributor network or sell directly to end users, there are things that you should keep in mind that will help or hinder you in the process. Full details can be found at www.vacwt.org
3. Virginia has been ranked America’s Top State for Business by CNBC in 2011! Our experienced workforce can assist with your global marketing plan.
4. Governor Bob McDonnell and his cabinet are all strong supporters of the Commonwealth’s efforts to expand international trade. We have just recently opened a new marketing office in Shanghai, with India soon to follow. Many new tax incentives have been initiated to support manufacturers or distributors that increase exports through the Port of Virginia.
5. Match-making made easy! Through your participation in VEDP group market visits, we can assist you in setting up qualified, face-to-face meetings with your potential customers and partners. These well-planned visits are business meetings set up on your behalf, with your input, to save you time and maximize your results.
6. Know before you go! We will make sure that you are aware of business and cultural needs when you travel to international markets. It’s all about the relationships that you build. Once the key contact has been established, you will feel comfortable in addressing the ups and downs of current business cycles and today’s market.
7. The VEDP has 45 international in-country consultants to support Virginia’s exporters. They provide in-country market research; identify potential distributors and are able to match-make on your behalf with potential distributors and clients. This type of support will help you win new business!
8. Markets with 96% of the world’s consumers—all outside Virginia, are potentially your customers. Virginia businesses rang up $23 billion in sales last year, and supported 300,000 employees in export manufacturing and services. Let’s keep this number rising!
9. Virginia businesses that are considering exporting have numerous resources. Please visit www.exportvirginia.org to engage our team. Virginia is open for global trade.

economy · export · exports · group market visit · international business · international deals · international event · international sales strategy · manufacturer · national export initiative · service exporter · travel · VACWT · VALET · VALET program · VEDP · Virginia · Virginia Conference on World Trade

If you do business abroad, consider this your “to-do” list.

Closing International Deals: The Dos and Don’ts of Getting to Yes

The 63rd annual Virginia Conference on World Trade is the place to start the conversation. Learn the Dos and Don’ts of business abroad – from navigating global markets to grasping differences in cultures. Learn how to build relationships and boost sales. Hear essential insights from seasoned business leaders. And don’t miss the morning keynote speaker, Michael Hick, a 40-year veteran of international business. Attend the full conference and get a free copy of his book Global Deals.

Why Attend

Learn concrete ways to increase your company’s international sales
Network with hundreds of people from manufacturing, service, and logistics sectors
Get caught up on international trade issues with industry experts
Hear high-caliber speakers discuss how Virginia if positioning itself for the future of international trade

Track A

Case Studies of Successful Deal Closers
Practical Insight for How It’s Done in the Real World, Parts I and II

Track B

Practical Negotiating Skills
Negotiating International Contracts
Managing the Mature Market

Don’t miss other speakers from:

Rolls-Royce plc
Honeywell International
Reynolds Consumer Products Company
McKinney and Company
Neville Peterson, LLP
American River International

… and more!

For conference details, visit www.vacwt.org.

economy · export · exports · international business · international deals · international event · international sales strategy · manufacturer · national export initiative · procurement · service exporter · VACWT · VEDP · Virginia · Virginia Conference on World Trade

Beginning July 2011, VEDP’s Global Network expanded to include the country of Costa Rica. Now covering 45 countries, the Global Network’s in-country experts provide valuable market research specific to your product or service. They compile background information and identify potential distributors. They conduct due diligence and arrange “match-making” appointments with potential distributors and customers. The possibilities are limitless.

Here’s a brief overview of the Costa Rican market should you want to explore new opportunities for your company:

Costa Rica has a relatively developed economy and is considered one of the most politically and economically stable nations in Central America. It has achieved a high level of economic development in part because the country has invested in health, education and infrastructure. Foreign investors remain attracted by the nation’s political stability, low costs and educated workforce. Some of the best-known foreign technology companies, pharmaceutical companies and medical device producers have already installed manufacturing facilities in Costa Rica. The country is also becoming a cost-effective location for outsourced labor, hosting call centers and financial and administrative services.

Costa Rica, slightly smaller than the state of West Virginia, has an economy that depends on tourism, commerce, manufacturing and agriculture. In 2010, Costa Rica’s GDP totaled US$ 35.8 billion and the population was estimated to be approximately 4.6 million people. Costa Rica has one of the highest incomes per capita in Latin America (per capita GDP of $7,843 in 2010) and a relatively high standard of living. The country’s population is concentrated in the Great Metropolitan Area, also known as the Central Valley, with 64 percent of its population living in this region. Most of the population of the Central Valley resides in the urban areas of San José, Cartago, Alajuela and Heredia, four of the seven provinces of Costa Rica. The region’s households have considerably higher household and per capita income than other regions of the country.

Costa Rica is a fairly open economy with no significant trade barriers affecting the entry of most goods and services into the country. Customs duties for Costa Rica range from 1 to 15 percent ad valorem. The Central America- Dominican Republic-United States Free Trade Agreement (CAFTA-DR), which entered into force in Costa Rica on January 1, 2009, eliminated tariffs on 80 percent of all U.S. exports. Most of the remaining duties will be eliminated within ten years. The United States is Costa Rica’s main trading partner and one of the main sources of foreign direct investment. U.S. products enjoy in this country an excellent reputation for quality and price-competitiveness. Proximity to the Costa Rican market is also a major advantage for U.S. exporters.

Contact your local Trade Manager today to learn more!

CAFTA · costa rica · economy · export · exports · global network · international business · international sales strategy · manufacturer · projects · research · service exporter · travel · VEDP · Virginia

An innovative online tool gives exporters easy access to tariff information for 85 percent of goods going to the 20 markets with which the United States has signed a free trade agreement. It is a resource that will prove especially beneficial to small and medium-sized exporters.

U.S. exporters once needed to spend an immense amount of time and money looking through pages of legal texts to figure out tariff rates under a free trade agreement (FTA). That burden has now been greatly reduced, with exporters able to retrieve this information almost instantly thanks to the FTA Tariff Tool, a new online resource unveiled April 27, 2011, by the International Trade Administration.

Three Elements

An FTA usually eliminates tariffs, removes nontariff barriers, and stops nondiscriminatory treatment of U.S. goods and services. But FTAs typically run to hundreds (and sometimes more than a thousand) pages and are often difficult to interpret.

The FTA Tariff Tool makes the process of identifying reduced tariff rates and schedules much simpler and faster. It does this by offering three complementary elements: (a) a searchable database identifying the tariff treatment of industrial goods covered under the trade agreements, (b) market access reports and charts across industrial sectors or product groups, and (c) a snapshot of current tariff and trade trends under different U.S. trade agreements.

This simple-to-use system allows companies to see current and future tariffs applied to their products and the date on which those products become duty free. By combining sector and product groups, trade data, and tariff elimination schedules, users can also analyze how product sectors are treated across the spectrum of all FTAs.

Benefits to Small Business

Small and medium-sized enterprises (SMEs) especially stand to benefit from exporting to FTA markets. In 2009, according to the Census Bureau, SMEs accounted for 97.6 percent of all exporting companies, but for only 33 percent of the total exported value. And that same year, 59 percent of SMEs exported to only a single market. By reducing a significant information barrier, the FTA Tariff Tool will help broaden the geographic horizon of SME exporters.

Future development of the FTA Tariff Tool will be ongoing. Plans are already under way to incorporate agricultural and textile information. Trade data will be updated on an annual basis, and future FTAs will be incorporated as they are negotiated and implemented.

Justin Hoffmann is an economist in the Office of Trade Policy Analysis in the Manufacturing and Services unit of the International Trade Administration.

defense · economy · export · exports · free trade agreement · FTA · international business · international sales strategy · manufacturer · national export initiative · service exporter · tariff · tariff rates