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Utilizing government resources: Utah firms get a boost.


Overseas markets seem foreign to many Utah firms, and not just because they're in foreign countries. Customs, regulations, competition, and consumer tastes differ from those found here, leaving new locals willing to venture beyond U.S. boundaries.

Yet there are boundless opportunities abroad, and even very small firms can take advantage of them. "If they're good companies here, if they have good products, it's going to be worth their while to go overseas," comments Lark Maximo, information specialist in Utah's Office of International Business Development.

There's lots of government help available to small- and medium-sized firms willing to take a chance on capturing overseas markets. Several Utah firms, using government resources, have enjoyed notable success.

Jetway Systems is a case in point. Based in Ogden, the firm manufactures passenger boarding-bridges that connect airport terminals to airplanes. With annual sales of about $70 million, the firm holds 85 percent of the domestic market and 40 percent of the international market.

Jetway Systems freely uses government assistance, and the company has been singularly successful doing so. According to Barbara Hermann, vice president of marketing, the firm frequently employs information compiled by the Department of Commerce for its market research. Not only that, it has commercial attaches from the Commerce Department collect information for it, such as names of decision makers, foreign government agencies that could be of help, and the itineraries of contacts they need to reach.

Practical Help

Much "help" available to businesses from the government is in the form of instructions and abstract information. Yet, in international business, the government is quite willing and able to describe not just what needs to be done, but also to become actively involved with the project. Government agencies will subsidize a firm's presence at trade shows, help it meet foreign government regulations, and promote the company to foreign buyers.

Jetway Systems benefitted from this first-hand when Utah's, Office of International Business Development brought the firm together with a Middle Eastern country's official responsible for making the final decision on a large purchase of passenger boarding-bridges. The buyer told Dan Mabey, director of the office, "I'm glad to see the state is so supportive of this business. I think I'm going to look very favorably at [the Jetway] project."

As Mabey notes, Jetway Systems is very competitive on its own merits, "but it's that little edge that can make the difference."

Sometimes that edge comes from unexpected sources. The office of Utah's Senator Orrin Hatch has worked closely with Jetway Systems and dozens of other Utah companies to bring overseas business to the state. About a year ago, according to Bob Lockwood, staff counsel in Hatch's office, a trade task force was established. It's purpose is to help Utah companies gain overseas business. The staff includes multilingual individuals who have lived abroad and know foreign cultures.

Among the Hatch office's services are contacts with commercial officials at a country's Washington embassy. "We don't just put you in touch - we accompany you to the embassy for your meeting with the commercial officials and sometimes the ambassador himself," notes Lockwood.

Jetway Systems' Tanner gives Hatch's office credit for several important contacts it benefitted from in Japan and South America. In early 1991, Jetway was awarded contracts in Japan for 29 passenger boarding-bridges.

"The most important thing we do here is getting names and sources in the country you want to do business in. We bring the seller and buyer together, and that's the toughest thing to do," says Lockwood. Lockwood estimates the task force helps about 150 Utah companies a year.

Small Firms Benefit

Firms much smaller than Jetway Systems have also benefitted from government assistance, such as Protective Technologies International, in Salt Lake City. A division of ASARCO, a large New York-based mining company, Protective Technologies makes metal-detection equipment for the precious-metals industry. The firm's products screen employees in mines, smelters, refineries, and jewelry-manufacturing facilities. In 1990, the firm's first full year of operation, sales were $500,000. President Ed Owsley predicts sales will reach $1.5 million in 1991. Currently, the firm has five full-time and five subcontract employees.

Small though the firm may be, it is aggressively pursuing overseas business. And it uses the services of Larry Bernaski, the export assistance coordinator at Salt Lake County's Division of Job Training and Development.

Employees of the firm attended a seminar on exporting given by the county last year. According to Owsley, after the seminar Bernaski called to ask if he could be of further assistance, which started the relationship between the firm and the county. "They've been of great assistance in helping us cut through the fog of exporting" is how Owsley describes the help he's received from Bernaski and the county.

County Assistance

Among the insights gained from the county are export licensing, invoicing, letters of credit, customs requirements, and names of contacts. "They've answered every question we had," states Owsley. "They've saved us a great deal of time and money."

"The most important thing I did for Protective Technologies," recalls Bernaski, "was to make them a promise that if they wanted to go with international trade, that I would try to be the one phone call they'd have to make to get an answer to whatever problem or question they had." Bernaski has even sat in on contract negotiations Protective Technologies had with a foreign firm.

He considered Protective Technologies' plan to ship products to the East Coast, have them packed in an ocean-going container, and then shipped to a customer in Sweden. Bernaski recommended that the firm pay a little more to have the container packed here in Salt Lake and then shipped to the East Coast. That way the company could be asured that everything required to be in the container would be included.

Among the county-provided services is a statistical analysis of the firm's product that includes information on sales trends; who in the foreign country is importing it; who the competitors are; and what the U.S. marketshare of the business is. Another type of analysis matches a firm's product to the 43 most promising international markets. These countries account for 93 percent of all U.S. exports.

Bernaski also does electronic database searches of international purchase offers and matches these to Utah companies. Also available are files on more than 100 countries that Bernaski makes available to potential Utah exporters. These contain such country specific information as how to market, cultural norms, taxes, and legal considerations. Plus, Bernaski has, over the years, developed a network of professional contacts here and overseas. This information is available to the clients when needed. Bernaski's services are available to companies throughout the state, not just those in Salt Lake County. He helps about 150 companies per year. As is typical of many government services, there's no fee.

Free Information

Price motivates giant WordPerfect Corp., of Orem, to rely on government agencies, too, when it enters overseas markets. "The best source of information we can get is from the government," says Eldon Lechtenberg, marketing assistant for WordPerfect's expansion operations.

Many private firms generate studies with information and statistics about certain countries and markets, but these often cost hundreds or thousands of dollars apiece. WordPerfect finds it cost effective to rely on government information.

Lechtenberg does market research studies of countries WordPerfect is planning to enter. When he wants to find out about a particular country, he first calls the commercial desk officer for that country. There's a desk officer for each country at the Department of Commerce. The desk officer provides a variety of publications and other material. For Thailand, the desk officer provided Lechtenberg with copies of the Overseas Business Report and Foreign Economic Trends, an industry sector analysis of the computer industry, and even a copy of the Bangkok Post.

The kind of information WordPerfect gets from the government is available and useful to just about every firm that wants to sell overseas. And the firm's size or industry doesn't matter. A wealth of information and statistics is available free from local, state, and federal agencies.

The experiences of Jetway Systems, Protective Technologies, and WordPerfect show the wide range of government assistance available to Utah businesses. No company is too small to consider operating internationally. According to Utah's international business development director, Dan Mabey, his organization has helped a firm that knitted hats and had sales of no more than $50,000 a year get overseas business.

His office produces the biannual Utah Export Directory, which lists hundreds of Utah companies which export. His department has offices in Belgium, Japan, Korea, and Taiwan. The services of these offices are available to all Utah firms. The Belgium office, for instance, played an important role in Jetway Systems' landing a major contract with the Brussels airport.

Enormous Potential Overseas

Many business owners and managers avoid overseas markets because they fear the complications, the risk, the unknown. This is too bad because government agencies have proven very capable of walking a company through the intricacies of exporting - at little or no cost.

Plus, the potential for success is enormous. A larger market often creates economies of scale that increases a firm's profit margins. Diversification overseas decreases the risk of being dependent on one market. Exposure to overseas competitors also frequently introduces American businesses to new products, more efficient production techniques, innovative designs, and different ways of doing business. This, in turn, can enhance a firm's domestic business.

And don't forget that the United States is not the whole world. As Steve Price, district international trade officer for the Small Business Administration, notes, "Ninety-five percent of the world's population and two-thirds of the world's buying power is outside the United States. If you're looking for customers with money, look outside the United States."

Alan Horowitz is a free-lance writer based ind Salt Lake City.
COPYRIGHT 1991 Olympus Publishing Co.
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Title Annotation:Utah-based Jetway Systems, Protective Technologies, and WordPerfect Corp. receive government aid for foreign trade activities
Author:Horowitz, Alan
Publication:Utah Business
Date:Sep 1, 1991
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