Export market grows:
Franklin County companies expand business overseas

March 11, 2008

By Janet Bond, Recorder Staff

'Our export business has almost quadrupled in the last four years thanks in large part to our business in China,' said Woodley Wardell, export sales manager for Bete Fog Nozzle.

In a recently released report from the Census Bureau at the U.S. Department of Commerce, export sales increased 13 percent, by $100 million, in the three counties of the Pioneer Valley (Franklin, Hampshire and Hampden). The sales data is from 2006, when export sales reached $873,046,821.

The top export destinations are Mexico and Canada, $351,602,974, countries in the European Union, $251,493,507 and countries in Asia, $179,106,730.

The increase occurred well before the drop in the value of the dollar helped make U.S. goods more desirable, because they cost less to companies around the world. Among the factors fueling an increasing export market for at least the last 10 years has been the overall growth in economies in countries like China.

'If you aren't exporting, you should be. This is the perfect time to export,' said Ann Pieroway, program director of the western Massachusetts office of the Massachusetts Export Center.

The Massachusetts Export Center, part of the Massachusetts Small Business Development Center Network, is in the business of helping small companies develop and or expand their export business. Pieroway, who has worked for 13 years in the western Massachusetts office, located at Holyoke Community College, has helped many Franklin County businesses expand their sales overseas. 'We're kind of like the marketing research department of a small company,' she said.

At one time or another, her office has helped a variety of companies in Franklin County, like Eddie's Wheels in Buckland. Eddie's Wheels makes carts for dogs and cats that have trouble walking for a variety of reasons. The business has grown from one employee, inventor Ed Grinnell, to 14 over the last 10 years.

Leslie Grinnell, Ed's wife and company president, said exporting makes up 20 percent of their business. They make about 400 carts a year for dogs in other countries, particularly Japan.

'The Japanese have adopted the American dog culture, both good and bad,' said Grinnell. The island country now has a problem with puppy mills, a proliferation of puppy boutiques and animal rehabilitation and physical therapy for dogs, she explained.

Grinnell said each Eddie's Wheels is custom made with tight control kept on the designs of the variety of carts.

That is one reason she is wary of doing business in China, a concern for the country's lack of respect for intellectual property.

'Intellectual property certainly is a concern. There is a company in China that has copied us,' said Marcus Smith of Hardigg Industries in South Deerfield.

Hardigg makes reusable containers of all sizes for carrying or shipping anything from laptops to military equipment. The export demand has been largely industrial and military, especially for carrying sensitive electronic or optical equipment, according to Smith, director of international sales and marketing.

'Our non-U.S. business has grown by 30 percent in the last three years,' said Smith, who offered three reasons for the increase in export business: 'growing demand and growing recognition of our product overseas and the exchange rate of the U.S. dollar has made our product seem cheaper.'

The expanding export market has led Hardigg to open offices in the United Kingdom and France that employ about 40 people, he said.

Opening business subsidiaries in other countries is likely to be a continuing trend at Hardigg, with an emphasis on Europe first and Asia second.

'We're thinking very seriously about growing our presence all over, including the Asian market, he said.

The problem of respecting intellectual property in China is not one Smith sees coming under control quickly. In part, it reflects the culture of a country for which ideas and property were communally held.

'There is a perception in China that ideas are collective,' Smith said, adding that 'it's very clear (that) is something that's going to have to be unlearned.' Smith said the company was not going to let the problem deter them from doing business in China.

'There is very much a reason to sell in China. We've witnessed demand for products there and the quality (of Hardigg products) can't be knocked off. I've seen the copy and it's not the quality of ours,' Smith said.

At Judd Wire in Turners Falls, Karl Sittard said they are getting their foot in the door in China, but doing business there is not a big emphasis of the company's export strategy.

'We've been doing limited business in China in the last three to five years. It's growing, but its growing slow right now,' Sittard said.

The reason is the company's concentration on North American Free Trade Act treaty countries.

'We are so focused on our North American customers, Mexico with NAFTA,' he said.

Sittard said they supply the wire that is used to make wire harnesses in Mexico, which are then shipped to Detroit, Mich., to make cars.

A wire harness, he explained, is a bundle of wires that are designed to connect various components of a car and its controls.

'We take copper conductor and we insulate it and make bulk electronic wire. Our products are typically used in demanding applications (such as) high temperatures, like the auto engine area,' he said.

Sittard said the company is experiencing faster growth in Europe and Central America combined than in China. It is also easier for Judd Wire to serve customers in the countries where they have established relationships.

With the increase in business because of exports, Judd Wire has had to add people and equipment to keep up with the growth. Sittard was unable to say how much the company had grown as a result of exports.

At Bete Fog Nozzle, the company makes over 20,000 different types of nozzles, so specific is the use and setting for the nozzles. In China, the Flue Gas Desulfurization nozzle sprays a limestone slurry in the smokestacks that results in a chemical reaction which removes sulfur dioxide from the factory or power plant emissions.

Wardell said the nozzles the company makes, even for similar scrubbing procedures, often need to be customized to work in specific systems. That, he said, makes it difficult for the ideas to be stolen.

The problems Bete has had in China, 'fall more into the category where you have to protect against companies using images and trademarks. The Chinese are very good at taking something, making a copy of it and trying to market it,' said Wardell.

Bete's best defense has been to do a good job protecting design technology, he said.

Bete, like Hardigg, has opened offices in Europe. In Germany, the company has a wholly owned affiliate office for sales and technological support. In England it has a wholly owned subsidiary office for sales and technological support.

The company also increases sales of its nozzles by using distributors throughout Europe, Asia and South America.

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