International Trade

Virginia Economic Development Partnership Surry County and Beyond March 13, 2013 Jordan Watkins VEDP- International Trade [email protected]

What is VEDP- Intl Trade • Mission: – To increase international sales for Virginia Companies – To expand Virginia’s tax base and job base • Goals: – Get clients in front of in-country decision makers – Get clients’ contracts signed 2

Accomplishing Goals By… • Taking clients to market – Group Trade Missions – Independent Market Visits • Identifying and qualifying potential in-country partners – Global Network Research – Internal Research • Executing international business plans in targeted markets 3

Trade Regions 4

Trade Regions 5

How Did… • Trax International grow their international sales from $2.5 Million to $5 Million?

• VSD, LLC increase their international sales from $0 to $10 Million?

• K2M, Inc. raise their international sales from $7.5 Million to over $30 Million?

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Research • >1000 Market Research Projects Completed from FY 2009 to present • 251 Total Research Projects in FY 2012 – 143 Global Network Research – 108 Internal Research 7

Research Topics: Examples • Who is importing my product or service?

• Are there any regulations I need to be aware of?

• What is the best way for me to sell my product or service internationally?

• How do I find a local partner?

20+ More Topics

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Global Network Program • • • •

49 in-country consultants provide market research to Virginia companies One free project per client, per year 26 market research tasks available Most requested task – list of potential in-country distributors or customers Europe

Belgium Bulgaria Czech Republic Denmark Estonia Finland France Germany Hungary Italy Ireland Latvia Lithuania Norway Poland Romania Russia Slovakia Spain Sweden The Netherlands Turkey Ukraine UK

Middle East & Africa

Israel Jordan Qatar Saudi Arabia South Africa UAE

Americas

Argentina Brazil Canada Chile Colombia Costa Rica Mexico

Asia Pacific

Australia China India Indonesia Japan Malaysia New Zealand Philippines Singapore South Korea Thailand Vietnam 9

Resources: ExportVirginia.org

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Resources: Fast Facts 11

Grow International Partnerships • VEDP Trade Missions & Independent Market Visits • 209 companies have traveled with VEDP on Trade Missions from FY2009 to present 12

Trade Missions Countries traveled: • • • • • • • Australia Brazil Canada Chile China Colombia Costa Rica • • • • • • • India Mexico Poland Romania Saudi Arabia South Africa Turkey • • • UK Ukraine Vietnam 13

Trade Missions

92%

of companies that have traveled with VEDP on Trade Missions would participate again 14

Trade Missions 15

Independent Market Visits 16

VALET Program Virginia Leaders in Export Trade (VALET)

54%

average increase in international sales over the two-year program for participating companies.

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VALET Program • • +124 Graduate Companies 50 Actively Enrolled 18

VALET Program To be Eligible…Companies must have: • • • • 20 employees $2 million USD in annual sales $20,000 annual commitment toward export trade Completed international market research 19

VALET Program VALET Client Profile Average Annual VA Sales Average VA Employees Average Total Employees Average Years in Business % of Sales Generated by Exports Average Annual Export sales $63 Million 141 357 33 14% $3.6 Million 20

VALET Program Program Benefits – $15,000 toward export related expenses – 25 program partners offering pro bono services – Executive training – International sales plan development – Educational events – Customized research (i.e. market analysis, technical assistance, competitive intelligence) 21

VALET Program Additional Results: – 94% expand into new international markets – 86% establish partnerships with international companies – 83% implement international marketing strategies – 81% increase annual international sales 22

VALET Success • BODE Technology – VALET 2007-2009 – Starting International Sales - $100,000 – Currents International Sales - $4.9 Million – VA staff increased from 85 to 130 – Started in 3 countries, now sell in 50+ countries 23

VALET Success • K2M, Inc.

– VALET 2009-2011 – Starting International Sales – 7.5 Million – Current International Sales - >30 Million – Current subsidiaries in 8 countries, plan for 4-5 more subsidiaries in 2012 24

VALET Success • Trax International – VALET 2009-2011 – Starting International Sales - $2.5 Million – Current International Sales - $5 Million – Created import/export compliance program 25

VALET Success • Turman Group – VALET 2008-2010 – Starting International Sales - $2.8 Million – Current International Sales - $7.5 Million – Purchase of Nelson County facility for exporting added 15 new jobs – 6-70% of lumber products sold internationally 26

VALET Success “Reality is, without international expansion it would have been very difficult for us to have survived the last couple of years of economic downturn. VEDP, the VALET program and the Virginia Department of Agriculture and Consumer Services were pivotal parts in making this happen for our company” -Ryan Turman 27

VALET Success • VSD, LLC – VALET 2008-2010 – Starting International Sales - $0 – Current International Sales - $10 Million 28

VALET Success “We didn’t have any FMS until we joined VALET. The knowledge gained through VALET enabled us to obtain FMS through the U.S. government because we had in-depth knowledge about a market they were moving into.” -Chuck Wythe 29

VALET Success • World Art Group – VALET 2006-2008 – Starting International Sales - $231,500 – Current International sales - $1 Million – $500,000 international sales to China 30

National Support National Export Initiative “To double U.S. exports in 5 years” -President Obama 31

Step Grant • • Year 1 – $435,000 October 2011-September 2012 – 17 companies received $20,000 Results – – – – $3,011,327.11 in total international sales Products/services sold in 11 new markets 12 of 17 companies increased international sales by approx. 12% One company went from $20,000 in international sales to $657,537.56 32

STEP Grant • Year 2 – $734,000 October 2012-September 2012 – – – – – – – 16 companies eligible for $20,000 11 Export Compliance slots 10 DXA slots 17 Gold Key slots 24 Commercial News ads 10 Export Expo virtual trade show booths 23 miscellaneous stipends at $2,500 33

ARC Grant • • • $100,000 – 3 federal fiscal years Limited to ARC region Funds for international travel and market research 34

Accolades VEDP International Trade

2008 President’s E-Star Award

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Accolades VALET Program

2010 Harvard “Bright Ideas”

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Accolades VALET Program

2008 NASBITE Program Excellence Award

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Accolades VEDP International Trade Clients

SteelMaster 2010 UPS “Growth through Global Trade”

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Accolades VEDP International Trade Clients

VSD 2010 British Airways Face-to-Face Contest

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Accolades VEDP International Trade Clients

24 Hour Company 2010 British Airways Face-to-Face Contest

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Virginia Conference on World Trade • • • • 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 is positioning itself for the future of international trade 41

Virginia Conference on World Trade • Highlights from 2012 – +225 international business executives representing 161 companies – Ignite Speed Networking Reception – 2 tracks offered – Keynote, Scott Wayne delivered on “The Art of International Influence” 42

Virginia Conference on World Trade “It was a great conference. I am glad that I attended. I have been signing praises about the conference to the staff here.” Vinod Chachra, VTLS, Inc.

“I was able to attend the conference and just wanted to let you know I thought the program was outstanding! You guys did a great job!” Jon E. Lytton, CCS-Inc.

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International Trade Fact 95% of the world’s consumers live outside the U.S.

87% of world economic growth over the next five years will take place outside the U.S.

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International Trade Fact Export growth has accounted for half of the nation's economic growth since the 2007-2009 recession 45

International Trade Fact Jobs supported by goods exports pay 13-18% more than the U.S. national average 46

International Trade Fact President Obama announced the National Export Initiative to double U.S. exports by the end of 2014 U.S. Census Bureau, U.S. International Trade in Goods and Services 47

Virginia Exports Globally 48

Virginia’s Exports

Virginia’s Export Composition 2010

From 2003 to 2010, Virginia’s service exports grew 61%, while product exports grew 37%, inflation adjusted.

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Virginia’s Service Exports In 2010, Virginia’s service exports totaled $13.8 billion and supported approximately 125,000 jobs. 50

Virginia’s Service Exports

Industry Top Service Export Industries Value, 2010 $ 13,799 Export Growth Rate, 2009-2010 6.4% Top Export Destinations, 2010 1 U.K.

2 Canada 3 Japan All Services

Business Services Travel and Tourism Financial Services Royalties Freight and Port Services Education Telecom Services Insurance Services $ $ $ $ 4,610 3,124 2,090 1,976 $ $ $ 988 407 406 6.7% 6.1% 4.7% 5.9% 9.6% 1.4% 9.5% U.K.

Canada U.K.

Ireland U.K.

China Brazil Japan Japan Canada Japan Japan India U.K.

$ 196 3.5% Canada U.K.

In US$ millions Emilia Istrate and Nicholas Marchio, Export Nation 2012 (Brookings Institution, 2012) Ireland U.K.

Japan Canada Canada Korea Canada Japan 51

Virginia’s Service Exports

Top Service Export Industries Industry Value, 2010 VA Ranking, Out of 50 States All Services

Business Services Travel and Tourism Financial Services Royalties Freight and Port Services Education Telecom Services Insurance Services

$ 13,799

$ $ $ $ 4,610 3,124 2,090 1,976 $ $ $ $ 988 407 406 196

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7 13 10 16 10 15 10 24 In US$ millions Emilia Istrate and Nicholas Marchio, Export Nation 2012 (Brookings Institution, 2012) 52

Service Exports Create Jobs

Industry All Services

Business Services Travel and Tourism Financial Services Royalties Education Telecom Services Insurance Services

Direct Export Production Jobs, 2010 89,409

37,899 23,530 6,545 7,483 5,221 6,008 1,892 831

Total Export Supported Jobs, 2010 125,012

48,329 31,499 14,291 13,327 8,403 6,008 1,892 1,264 Emilia Istrate and Nicholas Marchio, Export Nation 2012 (Brookings Institution, 2012) 53

Virginia’s Goods Exports In 2011, Virginia goods exports reached $18.1 billion, an increase of 5.5% from the previous year.

Virginia also ranked as the 25 th -largest exporting state in the U.S. for manufactured goods.

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Virginia’s Goods Exports

Virginia Exports by Sector 2011

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Virginia’s Goods Exports

Rank

1

Top Export Destinations for Virginia Goods Country

Canada

Export Value, 2011

$ 2,909,012,551

Growth

-2% 2 3 4 5 6 7 8 9 10 China United Kingdom Mexico Germany Brazil Taiwan Japan Netherlands Singapore $ 1,754,391,041 $ 1,096,101,814 $ 901,183,387 $ 867,570,453 $ 848,154,709 $ 487,749,928 $ 487,691,819 $ 455,537,784 $ 416,537,060 Global Trade Atlas 38% 8% 5% 2% 32% 27% -3% 0% -60% 56