It almost sounds like a vacation – travel to other countries, meet new people, do some business, let state and federal governments cover the costs. It’s anything but a vacation. It’s work, and it’s paying off for companies taking advantage of the Nevada Commission on Economic Development’s (NCED) Global Trade and Investment Program, which assists Nevada companies in developing exports to countries they may not previously have contacted. The program also brings foreign companies to Nevada, encouraging exports. Or, in other words, there are outbound and inbound missions, according to the director of Global Trade and Investment Program, Al Di Stefano.
To Seek Out New Civilizations – or Bring them Here
The mission of NCED is to promote a more diversified and prosperous community, increase entrepreneurial enterprises and attract business in order to create economic growth in the state. There are two types of outbound missions – trade missions and trade shows – both aimed at assisting Nevada companies in setting up exports or expanding business into new markets.
Trade missions involve taking U.S. businesses to foreign countries and setting up a variety of meetings for them with companies with which they may be able to trade. A Nevada company working independently might be able to arrange a handful of meetings, but the logistics are daunting – finding contacts, arranging space to meet – and travel time to individual company sites can be considerable. The state can put together a trip with established contacts in the destination country, set up a single conference location and put together 15 meetings a day.
“Much as you’d like to think of it as a vacation, it’s work,” said Teri Williams of Winnemucca Farms, a marketing subsidiary of U.S. Foods that produces potato flakes for food additives and snack ingredients. “You arrive very, very early at the trade show to set up your booth. You cater to crowds large enough to stagger most American populations, then mentally sift through leads to sort out those that are negligible from those that are serious.” Show hours are long and followed by one-on-one meetings with individual distributors. “If you’re lucky, you go to bed at midnight,” said Williams. “And then you get up at five o’clock and do it all over again.”
State officials coordinate with the U.S. Department of Agriculture’s Foreign Agriculture Service, which works specifically with exporting U.S. food and agricultural products. The program offers significant grant monies to state commissions working with trade missions.
In August 2002, the state of Nevada took companies involved in making food ingredient products on a trade mission to Central America, Guatemala, El Salvador and Costa Rica. Cost to each participant was $950, with grants funding everything but meals.
Flavor Consultants, a promotional/administrative firm that works with several U.S. companies, has gone on several trade missions. Owner Tim Wallace said the results have been “fantastic”. Trips are far less expensive than if the company decided to travel on its own. The Central America trip was expected to cost $2,000 per person, with a possible reimbursement of some costs. “If we had to do it on our own, first of all, with the number of companies we were visiting, we’d be down there probably three weeks. The airfare would be the same, but there’d be more costs for transportation, hotel and meals. I’d venture to say it would be around $6,000 per person instead of $2,000,” said Wallace.
Similar use of funds makes it possible for U.S. businesses to attend overseas trade shows. Smaller companies can’t afford to research markets such as China, so grant funds are used to underwrite or subsidize costs. “We may be able to underwrite the cost of a booth at a show anywhere from 40 to 55 percent,” said Di Stefano. “And all the work of setting up the trade show arrangements is pre-arranged.” Contracts are handled, contacts are made, and booths are already constructed, so when the company arrives, employees simply walk in with their products and literature and are set to go.
Attendance at foreign trade shows is often overwhelming to U.S. companies. The state can offer more assistance than just getting businesses there. “We took eight companies to a show in Japan. They didn’t speak Japanese and the Japanese didn’t speak English, so we had five interpreters to go from booth to booth,” said Di Stefano. They also held a market trends seminar and invited 30 to 35 Japanese companies, then allowed Nevada firms to give short presentations at the end and invite the Japanese back to their booths.
The state also provides a packet of services Nevada companies usually couldn’t afford to produce on their own. “Finding 35 key Japanese buyers in that market – no one company could do that, but when we work with our contacts, we can. We provide things these companies couldn’t do on their own, and at a deep discount by using grant money,” said Di Stefano. “Companies may have to pay their own airfare and meals, and quite a bit of the shipping. It’s not a free lunch, but it is a deeply discounted lunch.”
Williams participated in a trip to Singapore for a national food show, then traveled on to Manila and the Philippines to meet with individual contractors and returned via Hong Kong. Winnemucca Farms has made great strides in all three markets, which she credits to Di Stefano and the international program.
“As the new marketing director for [Winnemucca Foods], the NCED was invaluable to me,” said Williams. “Sometimes I had very complex questions and sometimes very simple ones, such as how to import and export samples, what’s a reasonable cost, what are the standard tests.” She also had questions on cultural differences, because a firm cannot enter a foreign market without studying preferences and practices indoor to conduct business in an appropriate manner.
The state also hosts inbound missions. “We set up a series of meetings with foreign companies here and bring the buyers in. Sometimes there are meeting rooms in cities, other times they go out to the plant,” said Di Stefano. “We’ve brought people to Winnemucca Farms and brought Mexican buyers to fields in Yerington to Peri Brothers, the big onion growers. We bring buyers in and underwrite their costs for individual meetings with companies so they can see the facility before doing business with the company, to see the quality first-hand and foster and have confidence in the supplier. It’s kind of a reverse trade mission.”
Grants for these trips are available through USAID, Agency for International Development, which offers a number of different programs, including the U.S. Asia Environmental Partnership (USAEP), the purpose of which is to export U.S. environmental products to Asia. This year the state secured a $20,000 grant for Reno’s Clean Fuels Technology to expand into Thailand, and it is currently working on getting similar funding to introduce the technology into Sri Lanka.
Not every company uses the program specifically in a first-contact role. When SPEC Industries made the trip to the Philippines, it was after five or six years of work. “I had all the [components] lined up, and then it was just a question of going over and attending the conference,” said Roger Owley, owner of SPEC Industries. “It was more exposure and one more marketing tool to get over into that area. On the same trip, I spent another week [outside the program] and got a lot of additional contracts completed and now I’m moving forward.” SPEC Industries works in waste-water recovery technology and is mostly a one-man show – Owley owns the technology and the company markets it, working with associates and contractors as needed. “We license our technology and train people under our license to design and use our technology. They build it with local labor using our specifications, so it’s a win-win for everybody – they use local labor, materials and employees, and we get the sales we want for the U.S. product,” said Owley.
Prior to 1998, the state of Nevada had never accessed federal grant funds for foreign trade. In 1998, the state asked for $30,000. Di Stefano came on board in March 2000 and saw the opportunity to increase the scope of the program, so in the past two consecutive years he’s asked for $200,000. “We’ve really been able to expand the program in the state of Nevada and take advantage of what’s there, which typically covers about five programs a year,” he said. Between writing and submitting grants, setting up and taking trips and compiling follow-up reports, there’s only time for five trips.
The point in the long run is not securing grant monies, but ensuring the success of Nevada businesses, said Di Stefano. “It’s not that we get the money but that the companies we take with us are successful in expanding. The ultimate goal is job creation, because once these businesses expand, they have to hire more people. That’s job creation and that’s what it’s all about at the end of the day – creating new jobs for Nevada citizens.”
