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New markets
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Exporting products challenging, but rewarding
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By MaryBeth Matzek, December, 2009
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For the Ariens Co. in Brillion, the economic slowdown has had one positive effect: Increased exports to Canada and Europe.
“The weaker U.S. dollar has made our products cheaper abroad and we saw exports rise 35 percent during the quarter ending Sept. 30,” says Dan Ariens, the company’s president and chief executive officer. “Our exports to Canada are very strong and we also think the economy will bounce back faster in Australia than here, so that’s a positive as well.”
Selling its products overseas is nothing new to the maker of snowmobiles and lawn equipment – Ariens estimates it’s been happening for more than 60 years. “If we weren’t exporting, we would be limiting ourselves,” he says.
Mike Klonsinski, executive director of the Wisconsin Manufacturing Extension Partnership (WMEP), wishes more manufacturers would share Ariens’ viewpoint. A recent study by WMEP found that 63 percent of the state’s manufacturers do not have sales or distribution facilities outside of the United States.
“Demand for manufactured products is growing more outside of the U.S. than in the U.S., so if you don’t participate, you may be missing growth opportunities,” says Klonsinski, adding that until 2008 demand for U.S. and Wisconsin products overseas was rising by double digits.
But he realizes many businesses face challenges when they jump into exporting. “There’s definitely an intimidation factor, but the WMEP and the Wisconsin Department of Commerce have teamed up to offer support and advice to manufacturers. There are resources businesses can turn to so it’s not so scary.”
The papermaker Appleton knows all about foreign competition. The maker of carbonless, thermal and security papers, and performance packaging products sells its products in more than 70 countries around the globe. Appleton’s international revenue grew by more than 70 percent between 2005 and 2007 and the company received the 2008 Governor’s Export Achievement Award for large manufacturers.
“The international market is where there is growth and expansion, so it makes sense we focus on that market and be a part of if,” says Skip Gardiner, executive director of international sales for Appleton.
While there are plenty of opportunities, there are also several challenges, including dealing with fluctuating currency values, Gardiner says. “Last fall, there was a time when there were dramatic shifts in the currency and we had customers curtail their orders because it became too expensive,” he says.
The value of the dollar and other currencies has since stabilized.
While some products compete mainly on having the lowest price, Gardiner says that’s not the case for Appleton. “Most buyers look not only at price, but value. We are able to provide the value of service, consistency and quality. That’s something many companies are looking for,” he says.
For the Ariens Co., one of the biggest issues is the lead time needed between production and getting the product to its overseas market. Ariens estimates it’s about four weeks from the time products leave Wisconsin until they arrive in Europe.
“Especially in our business where our products are seasonal, you really need to be planning ahead and realize how early items need to be produced and shipped so they are hitting the market at the right time,” he says. “You don’t want your product to arrive after the snow is on the ground.”
In Appleton’s case, there is a 21-day lead time for the product to be made, plus several weeks to get it to the foreign market. “For our customers, it may be hard for them to predict 10 weeks out what their needs may be, so we use forecasting tools to help mitigate the time between the order is placed and the product is delivered,” Gardiner says.
Cost is also a factor. Getting products overseas adds costs, but the lower dollar has helped minimalize some of that, Ariens says.
“You also have to consider the local needs. For example, in Europe, most people bag their grass rather than mulching it, so the lawnmowers need to have that ability,” he says.
The same holds true in the paper industry. Gardiner says some markets have specific products that aren’t available or needed in other areas.
“It’s critical when you’re dealing in a foreign market that you understand the local needs, languages and culture. Then you try to tailor your product and how it’s marketed to that market,” Gardiner says.
GETTING STARTED
For businesses interested in expanding their sales overseas, help is available. Many chambers of commerce and the State of Wisconsin sponsor trade missions to foreign countries where they can meet with potential customers.
“Those trips are very valuable for companies to go on and a great way to dip your toe in the water,” Klonsinski says. “Most companies only get involved in foreign opportunities after they’re contacted. Businesses need to be more proactive.”
Fox Valley Technical College’s Global Education Institute is expanding its program offerings to business and industry. That’s based on feedback from local businesses that global trade training is needed to help employees – who are transitioning into international responsibilities – become knowledgeable and successful in their jobs, says Institute staff member Nancy Peters.
The college is offering a new series: the Certified Global Business Professional, developed in accordance with NASBITE (North American Small Business International Trade Educators) guidelines for a Certified Global Business Professional designation, a nationally recognized professional credential that demonstrates an individual’s competency in international trade.
FVTC will offer the seminars in an accelerated format and the participants will also receive FVTC associate degree level credit. The style of training will give participants “just in time” hands-on, comprehensive training so they can develop international expertise, Peters says. The seminars begin in April.
“There are a wide range of challenges in the global marketplace, but there are lots of opportunities,” WMEP’s Klonsinski says. “Once we get manufacturers to the world stage, we can get them to be successful.”
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