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Utah exports: an overview of products and destinations.

UTAH EXPORTS An Overview of Products and Destinations

Currently, Utah ranks 36th among the 50 states in population and in the dollar value of its products exported to foreign countries. But the total value of Utah exports is growing rapidly, from $843 million in 1988, to $1.125 billion in 1989, to $1.8 billion in 1990. These increases are 33 percent and 60 percent respectively. In certain industries, demand for Utah-produced goods is increasing due to the state's reputation in those industries and the quality of its wares.

The Utah Factor

"Foreign countries are generally interested in products from the Unites States rather than from a particular state," says Lark Maximo of the state's International Business Development Office. "Utah, however, is known internationally in the computer industry." The Provo area is the nation's third-largest producer of computers and related equipment.

Utah also has a good reputation among U.S. employers, according to Maximo, and this has a positive effect on the state's export capacity. "Our work force is known for being educated and hardworking. Often the Utah plant of a particular company is more productive than other plants," says Maximo.

Other factors, however, restrain Utah's export capacity. Officials says this is because the state is landlocked and traditionally has concentrated on industries such as mining, whose products are more difficult to send overseas than, for example, clothing or Walkman-type stereos.

For comparison purposes, California tops the export list and South Dakota ranks last. Some reasons behind these rankings are that California has the largest population, while South Dakota's ranks 45th. California is a coastal state, while South Dakota is thousands of miles from either costs. In 1989, the latest year for which the U.S. Department of Commerce has statistics, California exported over $43 billion worth of goods, and South Dakota exported $131 million. Among the 11 western states, Utah's population and exports rank sixth.

Utah's Major Exports

The federal government classifies commodities into broad categories known as Standard Industry Codes (SICs). This facilitates gathering and analyzing statistics about sales, exports, growth, and industry trends.

The largest SIC category of Utah exports is electric and electronic machinery which includes computers and related equipment (see table 2). A case in point is the computer software manufactured by WordPerfect. According to David Pearson, director of international sales and marketing at WordPerfect, 35 percent of WordPerfect's business is overseas. The company's foreign market share is 45 percent, and most of the products sold in foreign countries are manufactured at the Utah facility.

"Most of our overseas competition comes from U.S. companies," said Pearson. "This is one area where the United States is definitely the industry leader." WordPerfect has the largest market segment in all but three Western European countries.

Another major Utah SIC export category is primary metal products, such as the steel exported by Geneva Steel. Foreign exports represent 10 percent of that company's business. Because the steel market is so large, Geneva has only a small portion of the international market share. Overseas competition comes from both foreign and domestic competitors.

A third significant export category includes scientific equipment and control instruments. Clean rooms manufactured by DAW Technologies are one example. "Clean rooms are ultraclean manufacturing environments for the semiconductor industry," said Randy Schoeck, marketing manager for DAW. The company engineers and manufacturers all the components (such as fans, filters, ceiling systems, walls, and floors), manages the construction of the clean room at the semiconductor facility, and certifies the level of cleanliness in the room.

Over 40 percent of DAW's sales are exports. The biggest markets are in Europe, the United Kingdom, and Asia. The company's combined foreign and domestic market share is 40 percent. "Most of our competitors for our foreign business are foreign companies," said Schoeck. "We just won a Chinese contract for which a Japanese company also bid. We're pleased about that."

Jetway Systems, of Ogden, exports products in several SIC categories - electric machinery, non-electric machinery, and transportation equipment. The company is best known for making the covered, moveable walkways which connect airplanes to the airport door for passenger boarding. Jetway was the first to manufacture these passenger-boarding bridges on a commercial basis. The company also makes tractors for towing airplanes and baggage trains.

"Our business overseas this year is expected to be 45 percent," reported Colin MacDonald, director for international sales. "The percentage varies from year to year."

Jetway has at least one domestic and eight foreign competitors, yet it has captured a large market segment. "Our current international market share is 40 percent. That's up from 25 percent in the past. Our domestic market share is 85 percent," said Barbara Herrmann, vice president of marketing,

Asked about the impact of the proposed free-trade agreement with Mexico, Herrmann responded, "We do business with Mexico now. But it [the trade agreement] certainly wouldn't hurt. It's always easier if we can sell to Mexico the same way as we sell to Arizona or California. Exactly how the agreement will benefit Jetway is difficult to say, although certainly we expect it will in the areas of reduced duties and customs," she continued.

In addition to high-tech products, Utah's natural resources of coal and copper are also exported. Fellerstone, of St. George, provides stone for landscaping and aquarium decoration. The latter can be found in pet stores worldwide.

Many other Utah companies export, including Novell, Iomega, NuSkin, Franklin International, WICAT Industries, and Huntsman Chemical. For a complete listing of Utah exporters, the Utah Export Directory is available for $10 from the Utah Division of Economic Development.

Export Help for Utah Businesses

Does your company have a product it would like to sell overseas? Federal, state, and county governments can provide assistance. The International Trade Administration (ITA) exists to help find overseas markets for small- and medium-sized companies. Stateside, ITA offices operate under the auspices of the U.S. Department of Commerce and work with overseas offices located in U.S. embassies and consulates.

"Many free and low-cost services are available," said Stan Rees, trade specialist for Utah's ITA office. "We can't make a business deal for you. But we can provide you with the facts you'll need about doing business in other countries, and we can help you find overseas buyers and agents."

ITA services include assessing the export worthiness of a company's product, foreign market identification, making overseas contacts, and promoting U.S. products to overseas buyers. The ITA also provides counseling about marketing strategies and financing, and it sponsors trade fairs and catalog/video exhibitions.

Another source of information is the Utah World Trade Resource Directory, published by volunteer members of the Utah District Export Council. The directory lists export resources as varied as translators, international bankers, attorneys, advertising services, and governments offices. The directory is available for a nominal charge at the ITA office, 324 South State St., Suite 105, Salt Lake City, Utah 84111.
 Table : State 1988 1989 % Change
Utah $843 $1,125 34%
Arizona 3,225 3,693 14%
California 37,680 43,417 15%
Colorado 1,845 2,244 22%
Idaho 623 759 22%
Nevada 232 291 25%
New Mexico 177 204 15%
Oregon 3,421 3,992 17%
South Dakota 81 131 62%
Washington 13,894 19,504 40%
Wyoming 18 238 9%

Table 1: How Utah Ranked with Other Western States in 1989 [Tabular Data Omitted]
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Author:Harris, Tamara L.
Publication:Utah Business
Date:Sep 1, 1991
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