Custom Metalcraft International Sales Manager Greg Macchi, left, and TranStore Division General Manager Scott Higgins stand in a group of TranStore intermediate bulk containers. The Springfield manufacturing company sold $3 million in exports in 2011.
Exporters push to expand global reach
Springfield-area exporters have learned how to negotiate the challenges of time, distance, language, costs and service by establishing global outposts closer to customers.
With outposts dedicated to sales, distribution, assembly of components and manufacturing of whole products, the strategies of several manufacturers offer glimpses behind the 30 percent increase in exports from the Springfield metropolitan statistical area between 2005 and 2011, according to the national Metropolitan ExportReport, released by the Missouri Department of Economic Development. Exports of goods and services in the five-county region exceeded $2.3 billion during the last six years. IN 2011, the Springfield MSA exported more than $398 million, the report said.
Sales and service Custom Metalcraft, a Springfield manufacturer of stainless steel containers for liquids, in January opened an office in Amsterdam and hired European professional Udo van der Veen to serve as sales manager in that office. The company is working to overcome language and time obstacles when selling to European markets, TranStore Divison General Manager Scott Higgins said.
Van der Veen speaks Dutch, German and French and has a European address and phone number. “Hes accepted a lot better than someone who’s calling from the United States,” Higgins said.
Van der Veen dedicates a full working day to sales, as opposed to the three-hour window available in Springfield due to the time difference.
The company sold $3 million in exports in 2011, expects $4 million in 2012 and projects a proportionately consistent increase in 2013, Higgins said. Exports represent 10 to 12 percent of total sales, he said.
Custom Metalcraft also has expanded its exports by working with the Missouri International Trade Investment Office’s Step-Up Program, which subsidizes overseas ventures to meet potential trading partners.
DairiConcepts, which produces customized cheese and dairy ingredients, has a strategy of working with distributors and brokers overseas and then hiring a sales agent when the venture gains traction, said Kris Clements, vice president of business development for the Springfield-based company.
In Mexico, DairiConcepts owns an import company and plans to add a manufacturing site in a year or two. DairiConcepts also works to follow current customers as they expand globally, Clements said.
Clements echoed Higgins’ emphasis on forming close ties with trading partners, especially in Asia and the Middle East, where deals are based on relationships, he said.
The company, for which exports represent up to 10-15 percent of total sales, hired four people in 2011 to handle the expanding export effort, Clements said. Export sales have been growing at a rate of more than15-20 percent, and the company is targeting 20 percent export growth for 2013. Clements declined to disclose export sales totals.
Some assembly required For separate reasons, Custom Metalcraft and electrical-connector maker Positronic Industries Inc. ship component parts for assembly overseas.
Higgins said his company saves 10 to 20 percent by shipping its TranStore intermediate bulk containers in pieces to Australia and subcontracting assembly of the units that are sold by a licensee. The arrangement began in October 2011, he said.
Savings in shipping more than offset the cost of assembly, he said. For the same $7,000 fee, a shipping container can accommodate 77 unassembled tanks at $90 per tank, or just 16 completed tanks at $437 apiece, he said.
For three decades, Positronic has been pursuing an international strategy, establishing divisions in Europe in 1983, Puerto Rico in 1991, Singapore in 1995 and India in 2004.
The company makes at least 10,000 types of electrical connectors in Springfield. For exports, Positronic sells products to the divisions, which configure the pieces in myriad permutations based on customers’ needs, Positronic President John Gentry said.
“We don’t know until just a few days or weeks out how they’ll want it built,” Gentry said. “The only business model that we can see is to do the final work close to the customer.”
Positronic’s annual exports sales are roughly $15 million and increasing, Gentry said, noting exports are nearly 40 percent of its $42 million 2011 Missouri sales total. Internationally, the company had more than $73 million in 2011 revenue.
Springfield’s NorthStar Battery plant is part of the Stockholm, Sweden-based company’s global network of manufacturing, distribution and service. NorthStar chose Springfield for its manufacturing site because of the city’s proximity to its main lead supplier, St. Louis-based Doe Run Co., CEO Hans Liden wrote in an email interview from Stockholm. All battery product development takes place in Springfield, he said.
For proximity to global customers, NorthStar also makes batteries in India and has distribution and service centers in Panama, Indonesia, Dubai, Singapore and elsewhere.
More than 50 percent of sales from the Springfield plant are exports, with strong demand for backup power for original telecom equipment manufacturers such as Ericsson, Nokia Siemens Networks and Chinese multinationals Huawei and ZTE, Liden wrote, declining to disclose the value of exports.
The strategy for global telecom sales is to work with original equipment manufacturers rather than target a nation or region, said Chief Technical Officer Frank Fleming, who works for NorthStar in Springfield.
“It’s the original equipment manufacturer that will tender a contract to an operator in Africa, for example, and we will come in on the back of that,” Fleming said.
Selling point Custom Metalcraft makes larger containers than the TranStore units, but they’re too big to ship efficiently, Higgins said. By exporting the unassembled 330-550 gallon units, Higgins said, “We’re jumping on the bandwagon with the easy stuff first.”
Gentry said the small size of Positronic’s products allows them to be shipped anywhere in one to two days, exposing Positronic to potential competitive challenges from companies in other nations with lower costs.
American goods have an international reputation for quality, but they often cost more, Higgins said. American steel is purer, and reusable stainless steel containers outshine less expensive 55-gallon plastic drums in a green-conscious world, he said. In these ways, American-made quality can be a selling point or a sticking point.
“You’re quoting apples to oranges,” Higgins said. “Sometimes that’s confusing, and sometimes that’s just plain frustrating.”[[In-content Ad]]
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