The odds of Missouri becoming a major exporting state seem slim compared to today’s global marketplace. Missouri has no major ports with access to the sea, and it’s two states away from Mexico, the United States’ biggest partner in the North American Free Trade Agreement. But many Missouri companies have found ways to use the state’s central location to their advantage in the global marketplace.
Over the past five years, Missouri has increased its exports to foreign markets by 107 percent, one of the highest increases in the nation, according to the U.S. Department of Commerce and other trade agencies.
“The things that we promote are a central location with access to east-west railroads, circuit surface transport and close-by airports that can handle some air cargo,” said Bernie Andrews, president of Regional Economic Development Inc., an organization that works to foster economic development in mid-Missouri. “Companies that are here doing business like the Missouri work ethic and think they’re very productive.”
Chris Poli, an international trade specialist for the Department of Commerce in St. Louis, said that companies in other countries are attracted to U.S. companies because they tend to offer good service and are consistent.
“An overseas company wants to be assured and convinced that it will be working with a company that will always send high quality goods and is for them,” Poli said.
Missouri businesses exported their products to 191 countries in 2006. Small- and medium-sized Missouri businesses made up 29 percent of the $12.8 billion dollars in exports that year, according to the U.S. Census Bureau.
Despite the increase of Missouri products destined for other countries, the state was ranked 26 among exporting states in 2006. Some of the state’s top exported goods were transportation equipment, fabricated metals, machinery, processed foods and electrical equipment.
Since 2001, South Korea has increased its purchase of Missouri exports, mostly transportation equipment, more rapidly than any of the other top 10 purchasing countries.
Purchases of Missouri exports have traditionally mirrored those of the United States, with Canada and Mexico consistently leading in purchases. Two Missouri businesses that have taken advantage of the location between Canada and Mexico are Glen Martin Engineering Inc. and Environmental Dynamics.
Glen Martin Engineering
In 1996, Glen Martin Engineering, a family-owned company in Boonville, began constructing cell phone towers to meet the demands of a communications revolution.
Telecommunications companies were contracting businesses like Glen Martin to supply the cell phone towers to help build their networks. Business was good, but the market became saturated with suppliers around the start of the millennium. The company needed new buyers, and so about three years ago it began researching prospective clients in Central and Latin America.
“In the Latino world the cell phone market has just begun,” said Beau Aero, a project manager at Glen Martin. “The Latino countries don’t have many telephone land lines, but cell phones are cheap, so telecommunications companies are investing in wireless instead.”
Glen Martin’s project managers and salesmen try to establish ties with businesses or countries of interest.
Many of Glen Martin’s initial contacts were developed by relatives of employees who live in Central America. But it was KC SmartPort in Kansas City that provided the resources that enabled the company to establish its reputation.
SmartPort is a nonprofit organization whose purpose is to make exporting easier for Kansas City-area and Missouri businesses.
The organization uses a $500,000 grant it received from the U.S. Department of Commerce to help businesses that show interest in exporting goods from the Midwest to Mexico and Latin America.
Glen Martin has received two SmartPort grants, totaling $7,000, Aero said. The grants have covered more than half of the expenses of trips abroad.
After contracts are negotiated with telecommunications companies or private contractors working as middlemen, the towers are made in Boonville. Glen Martin then sends project managers and engineers to accompany the parts to Latin America and assemble the towers.
It ships about 300 towers each month. Each tower costs $25,000 to $50,000, Aero said.
Glen Martin has towers in Nicaragua, Honduras, Guatemala and El Salvador, Aero said.
Engineers also perform periodic and sometimes short notice maintenance on the towers. “Some of the countries are so dependent on these communications systems that a few broken towers after a bad storm could mean a national emergency,” said Aero.
The company, which began in 1918 as a machine and welding shop, now has an office in China and counts 17 professionals from other countries among its employees.
Charles Tharp, owner and president of Environmental Dynamics, started exporting in the late ’90s. The company specializes in engineering aeration and biological wastewater treatments for wastewater treatment plants.
“It wasn’t a necessity to export, but it was a necessity if you wanted to grow rapidly,” Tharp said. “In the international market the competition has not developed.”
Tharp said his company has grown 15 percent to 20 percent yearly, and sales have grown from $20,000 in 1976 to $20 million last year. Clients sometimes find out about the business on the Internet, and other times they learn about the company at domestic and international trade shows, Tharp said.
Environmental Dynamics exports about 45 percent of its goods to 77 countries. Tharp first began exporting to Canada, and predicts Mexico will be his biggest client this year.
Companies like Environmental Dynamics often look beyond U.S. borders for a variety of reasons.
It’s survival for some and strategic for others, said Poli.
“When companies in the U.S. mature and they saturate their own domestic market, they must look beyond U.S. boundaries,” Poli said.
Environmental Dynamics stands out among its competitors, even though it plays a small role in building wastewater treatment facilities.
“We have a very narrow keyhole that we’re working through,” Tharp said. “We’re specialists.”
Tharp said his company offers technical support for companies that install and purchase its products, which allows the companies to save time.
Though Environmental Dynamics is a small company based in Columbia, its use of technology enables it to build an overseas clientele.
Anyone can find a plastic widget, Poli said, but not everyone is producing cutting-edge technology.
For example, she said, technological medical products find a good overseas market.
Although there are many opportunities abroad, said Shaoming Zou, associate professor of marketing at MU, small- to mid-size companies may fear some of the risks involved. Zou said the government provides basic assistance to exporting companies, such as information, training and financing.
As potential clients shop internationally, Tharp said his company must do one of three things to outbid his competitors: out-engineer the competitor, out-price them or out-perform them.
The Department of Commerce has foreign service nationals or colleagues overseas who live abroad but are employed by the U.S. government, Poli said. They have expertise in the markets they are in, just as international trade specialists have expertise in their local markets, she said.
As Poli talks to her clients about companies abroad, her international colleagues are connecting their clients to companies in the U.S., she said.