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ILL export conference

Tuesday 16 August, 2011

My last week in Chicago, I checked out the  ILLINOIS EXPORT CONFERENCE which was part of Illinois Export Week.  Warren Ribley, Director of IL Dept. of Commerce & Economic Opportunity, led off by saying Illinois leads the midwest with an increase in exports of 20% from 2009 to 2010.  Like Obama’s National Export Initiative, he hopes to double Illinois’ exports by 2015.  Governor Pat Quinn noted that there’s jobs in exports as Illinois exports were up 30% in the 1st quarter of 2011 to $14B.

Doug Oberhelman, CEO of Caterpillar, gave the keynote address.  70% of Caterpillar’s revenues come from exports.  Free Trade Agreements (FTA’s) have a negative connotation, but they shouldn’t as long as they’re reciprocal.  So why trade?  He gives 3 reasons:

  1. the US is no longer big enough, with only a population of 300M vs. 7B in the world.  ASEAN is importing $14B in airport infrastructure.  Brazil is investing $1.2TR in housing.  Africa is building 1200km of trans-Algerian highway.  India is building 54K miles of highway too.
  2. it’s better to play offense rather than defense.  Caterpillar confronted co-leader Komatsu in Japan & won.  With their world-wide footprint, they can serve Brazil’s needs in hydroelectrics.
  3. competition makes everyone better because it raises the bar for everyone.  Caterpillar has 150 new mostly low-cost competitors in China & they learn from every one.

Oberhelman offers these action points:

  • sign FTA’s with South Korea, Panama, & Colombia-we’re losing opportunities & jobs.  Caterpillar competes with German & Japanese companies for huge truck orders for their plant in Decatur, IL, of which 92% of it’s production is exported.  They’re losing opportunities in Colombia.  The revamped Panama Canal is an opportunity.  Others have duty-free access to the US-we should have the same duty-free access to their markets.
  • we must support those who lose their jobs to foreign trade with retraining.
  • write to your representatives to keep trade in mind when voting
  • don’t forget that the US is under attack @ all levels.

Q&A

  • Each tractor that comes out of the plant in Aurora, IL has a magnetic flag attached to it.  NAFTA has been a boon to North America.  The US is based on trade, starting in the 1900’s when we had no competition.  Caterpillar would lose if they moved all of their production to China, Brazil,…despite paying the highest tax rates in the world.
  • SME’s should start supplying customers who export & follow them.  Then think about whom do you know & trust?
  • Africa is an opportunity, but China is giving lots of aid & investment.

ILL companies export experiences panel discussion:

Bo DeLong of DeLong Company says ILL is a great place from which to export agricultural products.  They relied on the US Soybean Assn. & originally sold through agents & have grown from $100M in 2003 to $1B with 100 employees.

Jeff Dziura of NewMedical Technology has taken them to 36 distributors in 40 countries.  They went to Europe in 2008, Asia in 2010, Brazil in 2011.  They’re in highly regulated markets, but don’t get bogged down in paperwork. There is still cache to “made in the USA.”

J. Hurley Myers of DxR Development Group developed software for clinical problem solving featuring clinical simulations.  They went to Japan 1st, where translatin is key.  You need to do lots of research to find the right market matches.  It took years to find the right people in China where friendship comes 1st, before business.  You need to find someone you can trust, & it’s better if they have the right contacts.  You need local attorneys everywhere you go to protect your intellectual property.  Customer service can be done through local distributors who know the business.

Russell Witthoff of Dukane IAS has exported to Latin America since the late 1980’s & Europe & Asia since the 1990’s.  They focused more on central & eastern Europe than western Europe because they felt those areas were a better fit.  They now have a subsidiary in the Czech Republic which provides sales support for western Europe.  They’re establishing a subsidiary in China with contacts they made in Rockford.  CE standards can be an issue.

Q&A

  • Although face-to-face meetings are still best, Dziura found a distributor in Greece through LinkedIn.com
  • India is an alternative to a China strategy, but they are 2 different situations.  China exports while India serves customers @ home.  Local representation with a direct presence is critical to show commitment to the market.
  • Repatriating profits from China can be challenging.  You need to pay expenses in China from China.

The following awards were given out @ the Export Awards Luncheon:

  •                                    Exporter  Continuing Excellence      Exporter of the year          New Exporter
  • Small company:  Automated Industrial Machinery     NewMedical Technology  DxR Development
  • Avlon Industries
  • C&D USA Inc.
  • Elastec
  • Excel Railcar
  • Mid-sized co.:  Dukane Corp IAS Div.                                   Roho Group                           Rauland Borg Corp.
  • Williamson Energy LLC
  • Big Co.:    Flexco                                                                             Corn Products Intl.
  • NOW Foods
  • Export Promotion Agency of the Year:  ILL Soybean Assn.
  • Intl Trade Center of the Year:  SBDC @ SIU-Edwardsville
  • Agricultural Exporter of the year:  DeLong Co.
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