International TradeVirginia Economic Development Partnership

Surry County and Beyond

March 13, 2013

Jordan Watkins VEDP- International Tradejawatkins@yesvirginia.org

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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

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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

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Trade Regions

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Trade Regions

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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

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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

EuropeBelgiumBulgariaCzech RepublicDenmarkEstoniaFinlandFranceGermanyHungaryItalyIrelandLatviaLithuaniaNorwayPolandRomania

Middle East & AfricaIsraelJordanQatarSaudi ArabiaSouth AfricaUAE

AmericasArgentinaBrazilCanadaChileColombiaCosta RicaMexico

• 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

Asia Pacific AustraliaChinaIndiaIndonesiaJapanMalaysiaNew ZealandPhilippines SingaporeSouth KoreaThailandVietnam

RussiaSlovakiaSpainSwedenThe NetherlandsTurkeyUkraineUK

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Resources: ExportVirginia.org

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Resources: Fast Facts

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Grow International Partnerships

• VEDP Trade Missions & Independent Market Visits

• 209 companies have traveled with VEDP on Trade Missions from FY2009 to present

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Trade Missions

• Australia• Brazil• Canada• Chile• China• Colombia• Costa Rica

• India• Mexico• Poland• Romania• Saudi Arabia• South Africa• Turkey

• UK• Ukraine• Vietnam

Countries traveled:

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Trade Missions

92% of companies that have traveled with VEDP on Trade Missions would participate again

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Trade Missions

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Independent Market Visits

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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

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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

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VALET Program

VALET Client Profile

Average Annual VA Sales $63 Million

Average VA Employees 141

Average Total Employees 357

Average Years in Business 33

% of Sales Generated by Exports 14%

Average Annual Export sales $3.6 Million

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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)

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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

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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

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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

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VALET Success

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

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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

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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

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VALET Success

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

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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

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VALET Success

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

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National Support

National Export Initiative

“To double U.S. exports in 5 years”-President Obama

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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

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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

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ARC Grant

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

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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

SteelMaster2010 UPS

“Growth through Global Trade”

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Accolades

VEDP International Trade Clients

VSD2010 British Airways Face-to-Face Contest

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Accolades

VEDP International Trade Clients

24 Hour Company2010 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

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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”

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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

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International Trade Fact

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

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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

In tr

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lars

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Virginia Exports Globally

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Virginia’s Exports

Virginia’s Export Composition2010 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.

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Virginia’s Service Exports

1 2 3All Services 13,799$ 6.4% U.K. Canada Japan

Business Services 4,610$ 6.7% U.K. Japan Ireland

Travel and Tourism 3,124$ 6.1% Canada Japan U.K.

Financial Services 2,090$ 4.7% U.K. Canada Japan

Royalties 1,976$ 5.9% Ireland Japan Canada

Freight and Port Services 988$ 9.6% U.K. Japan Canada

Education 407$ 1.4% China India Korea

Telecom Services 406$ 9.5% Brazil U.K. Canada

Insurance Services 196$ 3.5% Canada U.K. Japan

Top Service Export Industries

In US$ millionsEmilia Istrate and Nicholas Marchio, Export Nation 2012 (Brookings Institution, 2012)

Top Export Destinations, 2010Industry

Export Growth Rate, 2009-2010

Value, 2010

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Virginia’s Service Exports

Industry Value, 2010VA Ranking,

Out of 50 States

All Services 13,799$ 12

Business Services 4,610$ 7

Travel and Tourism 3,124$ 13

Financial Services 2,090$ 10

Royalties 1,976$ 16

Freight and Port Services 988$ 10

Education 407$ 15

Telecom Services 406$ 10

Insurance Services 196$ 24

Top Service Export Industries

In US$ millionsEmilia Istrate and Nicholas Marchio, Export Nation 2012 (Brookings Institution, 2012)

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Service Exports Create Jobs

IndustryDirect Export-

Production Jobs, 2010Total Export-

Supported Jobs, 2010

All Services 89,409 125,012

Business Services 37,899 48,329

Travel and Tourism 23,530 31,499

Financial Services 6,545 14,291

Royalties 7,483 13,327

Freight and Port Services 5,221 8,403

Education 6,008 6,008

Telecom Services 1,892 1,892

Insurance Services 831 1,264

Emilia Istrate and Nicholas Marchio, Export Nation 2012 (Brookings Institution, 2012)

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Virginia’s Goods Exports

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

In 2011, Virginia goods exports

reached $18.1 billion, an increase

of 5.5% from the previous year.

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Virginia’s Goods Exports

Virginia Exports by Sector2011

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Virginia’s Goods Exports

Rank CountryExport Value,

2011

1 Canada $ 2,909,012,551 -2%

2 China $ 1,754,391,041 38%

3 United Kingdom $ 1,096,101,814 8%

4 Mexico $ 901,183,387 5%

5 Germany $ 867,570,453 2%

6 Brazil $ 848,154,709 32%

7 Taiwan $ 487,749,928 27%

8 Japan $ 487,691,819 -3%

9 Netherlands $ 455,537,784 0%

10 Singapore $ 416,537,060 -60%

Growth

Top Export Destinations for Virginia Goods

Global Trade Atlas