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Arkansas is everywhere.

$5.2 Billion in Arkansas Products Exported Annually to the Store Shelves, Offices and Factories of the World

JAPANESE, RUSSIANS, Frenchmen and Canucks all have something in common now: They can learn a lot about Arkansas without ever stepping foot in the state.

Arkansas products worth an estimated $5.2 billion are being exported each year to more than 135 countries around the world, and in their own way these items reveal as much about Arkansas as a visit to "The Natural State."

At least 78 Arkansas companies export to other countries, sending products as dissimilar as furniture, dairy products and computer software.

And the trend is growing. The Arkansas Industrial Development Commission says Arkansas export sales grew by about $700 million from 1991 to '92. Last year, the state exported an estimated $3.3 billion in manufactured goods, $1.02 billion in agricultural products and $850 million in services.

The AIDC's upcoming export directory indicates that in 1992, Canada was by far the largest market for exported Arkansas goods, at $399.3 million in sales. Japan was second, at $186 million, followed by Mexico, $98.7 million; France, $83.3 million; and the United Kingdom, $64 million.

What follows is a look at a few of the companies driving Arkansas' worldwide expansion.

Conveying Methods

Hytrol Conveyor Co. of Jonesboro has been manufacturing industrial conveyor systems since 1947, but the company didn't begin a serious export program until the '90s.

A few years ago, Hytrol landed a major contract to install new conveyor systems for the Volkswagen plant in Puebla, Mexico. The Hytrol system brings tires and car seats from storage to the installation area.

The company also has recently provided a conveyor system for a Montreal dishwashing machine manufacturer called Camco.

With the recent success, direct exports now account for about 3 percent, or roughly $1.8 million, of the company's $60 million in annual revenues. So far in 1993, exports are up 38 percent over the same period of 1992.

"That's due to a real concentrated effort," says Hytrol President Greg Goodner.

"1992 focused on Canada and Mexico. We had $400,000 in business from the Mexican market alone. In 1993, our effort has been focused on the Pacific Rim. There is a big need for our type of product there. Those countries are expanding, and what they're trying to do is figure out ways to reduce costs and increase output. Conveyors can take labor out of the job, and do it faster."

Hytrol has taken the next step by recently establishing a distributor in Taiwan, hoping new contracts soon will result.

The company has built a reputation on its guarantee of 24-hour delivery for standard conveyor systems within the United States. Hytrol has 600 employees working in a 500,000-SF facility in Jonesboro. Two warehouses are located in St. Louis and Manteca, Calif., and Hytrol is anchored by an international network of 75 distributors spread across Canada, the United States, Mexico, South Korea, Taiwan, Singapore, India and Chile.


Africa $41,081,831
Asia & Oceania 423,464,460
European Community 288,638,810
Latin America 98,132,265
& The Carribbean
Middle East 82,810,648
North America 498,009,587
Russia & Former 16,378,137
Soviet Republics

TOTAL: $1,448,515,738

Source: U.S. Department of Commerce
Manufacturing Export Breakdown

Here is a list of selected 1992 export contributions by various
sectors of Arkansas industry.

Industry Amount of Exports

Apparel and Similar Products $13,380,944
Chemicals and Related Products 272,808,412
Electronic and Other Electrical
Equipment and Components 123,699,290
Fabricated Metal Products 102,814,625
Food Products 297,368,893
Furniture and Fixtures 15,124,727
Industrial and Commercial
Machinery 154,663,302
Leather and Leather Products 3,112,455
Lumber and Wood Products 18,450,994
Misc. Manufactured Products 16,370,569
Paper Products 107,622,135
Petroleum Refining
& Related Products 4,499,143
Primary Metal Products 36,981,189
Printing, Publishing
and Related Products 7,489,823
Rubber and Miscellaneous
Plastics Products 31,639,131
Scientific Instruments 31,980,007
Stone, Clay, Glass and 7,430,050
Concrete Products
Textile Mill Products 7,114,939
Transportation Equipment 195,965,110

Source: Arkansas Industrial Development Commission

"We're looking at trying to drive the direct exports to 10 percent by the end of the decade," Goodner says. "We think that's a realistic goal. The thing you have to do carefully is the after-sale service. As you start selling in remote locations, you have to make sure the service is there."

Hytrol's international market is actually much larger -- 10 percent of sales -- when indirect exports are taken into account.

"We sell to a lot of domestic distributors who then ship our equipment overseas," Goodner says.

Telebanking and ATMs

At Arkansas Systems, a Little Rock-based computer software development company, more than 40 percent of company revenues come from export business.

The company specializes in designing telebanking and automatic teller machine software for financial institutions and claims to have captured more than 50 percent of that specific market worldwide.

Arkansas Systems also provides software for back-office operations such as check and payment processing and for computer networks that link banks electronically.

One of the keys to this company's export success is the universal need for its product. Every country has banks; almost every bank has established electronic banking programs; and everyone wants easy access to their money.

Perhaps it is even more significant, however, that Arkansas Systems places tremendous emphasis on multilingualism.

"Clearly, the ability to speak to our Latin American customers in their native language is very, very important," says Vernon Markham, the company's Asia-Pacific sales director. "We probably have got at least seven or eight languages represented here.

"We have teams right now in the Ukraine, Latin America, Central America, Asia, Indonesia ... and the Middle East," Markham says. "A lot of our new business activity has been in Russia. I just returned from China. I think the market there has got great potential."

Arkansas Systems was formed in 1975. It turned its first international business deal in 1977 and its first international banking deal in 1983. The export element has grown rapidly in the last five years, due in part to the company's status as a partner with IBM Corp. When the company installs a new system at a bank, it installs IBM computers along with it.

Service after the sale is much less of a challenge for Arkansas Systems than for a heavy industrial company like Hytrol. Arkansas Systems can do much of its maintenance and diagnostics over long-distance telephone lines.

Small but Successful

On a smaller scale, another story of exporting success can be found at Classy Creations of Monticello Inc., a manufacturer of ladies' accessory items.

For its first four years, the 6-year-old company saw sales double annually. To recover the momentum, Classy Creations recently went in search of a new market.

It all began with a February 1992 Japanese trade fair for Arkansas companies organized by the AIDC and the Japan External Trade Organization (JETRO).

It was there in Kobe, Japan, that Jan Shrum, secretary-treasurer of Classy Creations, met two distribution companies called Nihon Comnet and Nakano Ltd.

Since those initial meetings, Classy Creations has been filling regular orders from Japan, and exports now account for 5 percent of the company's sales.

"The orders from Japan normally average around $3,000," compared with an average order of $200 for American distributors, Shrum says.

Classy Creations has only six full-time employees and six part-timers, but its jewelry bags and shoe totes are getting noticed nonetheless.

"We give full credit to the AIDC and the JETRO program," Shrum says. The AIDC actually has in residence a senior adviser from JETRO whose sole purpose is to help Arkansas companies do business with Japan.

"It's something we'd never do on our own," Shrum says. "We're not real organized on this. We just go with the flow."

Shrum says she would love to keep expanding her company's export revenue stream, but the high cost of attending international trade shows keeps the tiny firm from pursuing that goal. Instead, Classy Creations plans to build on its small successes by placing ads with U.S. Department of Commerce publications.

Continued Growth

The stories of these three companies are merely ripples from a larger wave.

"The export opportunities just continue to grow for the state," says Charles Sloan, marketing director for the AIDC. "We've experienced nice and even growth over the last five to seven years."

Sloan says the reduced tariffs and other import barriers in Mexico and Latin America have increased Arkansas' share of trade to those areas over the past two years.

"In Europe and the developed world, they are looking for consumer items, unique items -- things that fit into niche markets," Sloan says. "In developing economies your capital goods are exhibiting a lot of strength, such as industrial machinery."

Sloan notes that chemicals and related products are the state's single largest manufacturing export, accounting for $272.8 million in revenues. He also says that one of the fastest-growing areas is the export of services such as engineering or construction.
COPYRIGHT 1993 Journal Publishing, Inc.
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
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Title Annotation:Special Report: Industry Report; state products exported worldwide
Author:Haman, John
Publication:Arkansas Business
Date:Oct 4, 1993
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