Newsletter – December 5, 2018

Recognized as the nation’s best state for doing business, Utah is enjoying new prosperity and diversity. While the state has been busy working hard for that honor, World Trade Center Utah has been supporting these efforts by focusing on promoting exports, attracting foreign investment and enhancing Utah’s status globally. Growth in Utah’s economy, new opportunities for trade and investment and intense organizational growth have created an opportunity to refine our strategy. To that end, WTC Utah is focusing its export promotion strategy and developing an innovative foreign investment strategy. These efforts are driven by three priorities: value creation, industry coordination and rigorous accountability, which will sharpen our efforts to support exporters, attract investors and lift Utah’s global brand.

The ultimate economic value of export promotion activities hinge on WTC Utah’s ability to concentrate its high-impact programming on Utah’s most competitive industries. These economic clusters, including aerospace & defense, life sciences, IT & software development and outdoor products represent the fastest growing, most innovative and best-paying sectors in Utah, and WTC Utah will support these clusters in a variety of ways, including awarding grants and leading trade shows and trade missions.

These programs will be supported by a pipeline of activities that will prepare businesses to successfully engage abroad. In short, WTC Utah’s outreach efforts, market research, export counseling and grant funding will focus on supporting those companies targeted and recruited to participate in our international programming. In addition to building global awareness, our current efforts match companies to the correct resources and provide funding to hundreds of companies each year. Despite this impressive output, we are convinced more can be achieved through additional mentoring for targeted businesses.   

In order to promote prosperity across the entire state, WTC Utah will support existing industries across rural Utah. This can be achieved by evolving our rural programming from outreach and awareness into export “boot camps” designed to provide hands-on training to high-potential businesses in rural Utah and bringing Utah’s export service providers directly to them. Rural businesses will be able to take advantage of both our core offerings and grant funding earmarked for independent activities. Coordination with our export-promoting partners will help us ensure all Utah businesses have access to the services they need for international success.

By engaging the public and private sector in support of Utah’s strongest industries, WTC Utah can leverage its unique position as a public-private partnership to provide strategic leadership that lifts local efforts to a global level. Industry coordination will augment industry experience, allowing WTC Utah to focus on its core competencies. Working groups composed of industry and state leaders are already in place to help us gain additional input on our international programming as well as to identify and recruit companies and consider investment opportunities. This “Team Utah” approach avoids duplicating resources and leverages collective efforts towards Utah’s international objectives.

Foreign investment activities will also thrive through this Team Utah approach. WTC Utah’s primary role in attracting investment is to match foreign investors with opportunities in Utah. This foreign investment strategy will pursue all types of investment with an approach built on strategic coordination with our key stakeholders, each of whom is necessary for making deals happen!

An important aspect of the investment effort will be to include more partnership and investment opportunities into trade mission programming. Outbound events can be utilized to pursue engagement with foreign investment communities, university researchers and global industry players. Stakeholder engagement will help us match Utah’s assets to opportunities abroad. Building on the relationships through this outreach, WTC Utah will invite delegations to the state for inbound trade missions to experience Utah and discover our strategic investment opportunities.    

Foreign investment brings both capital and partners into a market, especially when growth opportunities exist or unique expertise is available. For this and other reasons, foreign investment is a key driver in economic growth and diversification as well as increased international trade. Establishing an inland port will provide a premier opportunity for this kind of development. The inland port’s logistics capabilities will support investment into Utah as an advanced manufacturing and logistical hub for the Western United States and decrease barriers to trade for exporters here. Supporting the inland port, and projects like it, will be a priority for WTC Utah.

This is where WTC Utah’s export promotion and foreign investment efforts combine into a unified effort. Utah’s high-impact programming abroad will not only take Utah companies to the world, but will also bring the world back to Utah. As foreign investment flows into the state, products and services flow out, completing the cycle of trade and investment that characterizes the global economy today.

Leading out for the state, WTC Utah will practice rigorous accountability and transparency regarding its impact. Utah’s economic strength has its backbone in responsible fiscal governance, and we will follow suit. Not every activity is geared towards the same outcome, and WTC Utah will work with the state and its stakeholders to create and define objectives for its various programming. We must balance output and outcomes both hard and soft in order to demonstrate the breadth of impact from these activities.    

WTC Utah’s efforts for economic development will have a secondary effect of lifting Utah’s art and culture into a global spotlight. Utah enjoys an olympic pedigree, a unique cultural heritage and the attention of international organizations. WTC Utah will be mindful and supportive of efforts of others to strengthen Utah’s image across politics, education, art and culture alongside our trade. As stewards with our partners of Utah’s global brand, WTC Utah will continue to be a strategic leader for elevating Utah as a crossroads of the world.

DGM

Market Highlight: Indo-Pacific Defense Industry

This December 10-12, WTC Utah will help sponsor the U.S. Department of Commerce’s “Discover Global Markets” business forum in Salt Lake City, a flagship event for U.S. exporters. The Department’s U.S. Commercial Service is hosting the event which will focus on the unprecedented demand across markets in the Indo-Pacific defense and related industries. The event is a must attend for Utah companies interested in opportunities at the convergence of aerospace, defense and security. Register here.

Target Markets

Targeted markets include: Australia, Burma, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Papua New Guinea/Pacific Islands, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam.

Target Industries

Target industries include: aircraft, engines, MROs, aviation services, avionics, aerospace composites, airport and ground support equipment, cyber defense, additive manufacturing, unmanned systems, surveillance and detection and more.

Japan, the Republic of Korea and Taiwan remain long-standing top importers of U.S. defense articles, according to a defense market report prepared by the U.S. Department of Commerce’s International Trade Administration (ITA). “Southeast Asian defense forces have also increased steadily over the past decade to counter China, as it has become the second largest global military spender. Although the issue over disputed islands is not new, China’s development of artificial islands in the South China Sea and beyond has caused increased regional tensions and, hence, an increase in projected defense spending throughout the Asian Pacific Region. Concerns from neighboring countries over North Korean activities are also mounting,” the ITA report states.

“Defense spending is expected to increase in Japan, Indonesia, the Philippines and Vietnam. By 2020, total regional spending is expected to reach $533 billion annually from $435 billion in 2015, of which Chinese defense spending makes up about 40 percent of all defense spending in the Asia Pacific Region,” the ITA report projects. “This ratio of spending suggests that 60 percent, or roughly $261 billion annually and growing, represents significant export opportunities for defense companies within the remaining Asia Pacific region (outside of China).”

Additionally, Australia is the second largest defense market for the United States. According to the U.S. Commercial Service, “Australia has a ten-year, USD145 billion acquisition strategy supported by allocated funding; a strong preference for US technology based around an operational focus on interoperability with the US military; and is a close US ally offering the additional diverse benefits of being a strong democracy based on the rule of law; IP protection; familiar business practices; English language; and a well-established American Chamber of Commerce.”

Opportunities

Attendees at the Discover Global Markets event in Salt Lake City will have opportunities to:

  • Meet one-on-one with visiting U.S. Commercial diplomats to craft international market entry strategies
  • Meet one-on-one with foreign buyers from Burma, Japan, India, Singapore, South Korea, Taiwan and Vietnam looking for U.S. suppliers or partners
  • Meet one-on-one with U.S. original equipment manufacturers (OEMs) seeking specialized suppliers of services, equipment and parts for their large projects in the region
  • Receive guidance on trade barriers and market access issues
  • Leverage new U.S. Government international trade contacts to support international sales growth
  • Network with leading private sector experts and like-minded U.S. businesses active in overseas markets

The panel discussions, collaboration and networking opportunities will be vital for attendees seeking best-in-class guidance for entering the Indo-Pacific market. The agenda will be especially beneficial for CEOs and company presidents, sales and marketing professionals, business development managers, engineers, procurement representatives and supply chain operations.

WTC Utah’s Involvement

WTC Utah has three objectives in sponsoring events like the U.S. Commercial Services’ Discover Global Markets business forum: help, promote and expand. First, we want to take Utah companies to the world by helping them make global connections, so they can sell their products and services abroad. Second, while giving Utah companies the tools and information they need to compete in the global economy, we also promote Utah to foreign companies, so they discover the Utah magic and strategic investment opportunities here. Third, we want to expand Utah’s global position by hosting foreign dignitaries and leading Utah delegations abroad.

As the statewide voice for international trade, WTC Utah helps Utah companies expand internationally through a variety of services, including trade missions, research, resources, strategies and grant programs that provide financial assistance. Our trade services team offers complimentary services such as international market research designed to help Utah businesses make informed decisions and establish meaningful connections.

To further support Utah businesses, WTC Utah is offering to partially cover the cost of registration for the Discover Global Markets conference for those who apply and are awarded the State Trade Expansion Program (STEP) Grant. The STEP Grant is funded in part through a grant from the U.S. Small Business Administration (SBA) and the purpose of the STEP Grant is to increase the:

  1. Number of eligible small business concerns in the state that export
  2. Value of exports by eligible small business concerns in Utah
  3. Number of eligible small business concerns exploring significant new trade opportunities

The STEP Grant is currently helping 11 Utah businesses take part in the Discover Global Market conference through grant awards. If your small business would like to receive financial assistance to attend the Discover Global Market conference please use the following link to apply: https://wtcutah.com/grants/step-grant/

We hope to see you Dec. 10 at the Discover Global Markets conference!

Going Global: Sno-Go

Combine cycling with skiing and what do you get? Sno-Go, the ultimate, all-mountain “snow bike” that’s perfect for groomed trails, snow parks or powder.

Sno-Go, the product, is manufactured and sold by Sno-Go the company, a startup co-founded in Sandy, Utah, by entrepreneurs Chase Wagstaff and Obed Marrder. Friends since the seventh grade, the duo launched Sno-Go in 2015 after several other solo and combined business endeavors. With Sno-Go they combined their passions for mountain biking with the concept that they could reimagine what is possible in the snow.

Due to its operator-friendly design, including three skis and handlebars, riding a Sno-Go snow bike is as easy as riding a bicycle, but just as exhilarating as skiing or snowboarding. Riders stand on the back two skis as they would a pair of snow skis, but rather than hold ski poles they grasp the handlebars connected to the front ski. As the riders shift their weight from side to side the Sno-Go articulates so the riders can easily navigate hills and the changing landscape.

Prototyping their design took place over a five-year period as Wagstaff and Marrder bootstrapped their business while working other jobs. While other ski bikes featured two skis, the duo opted for three skis to add stability and control and patented a state-of-the-art Rockshox fork. Further, they aligned the skis such that the treads left behind by the snow bike were identical to a standard pair of skis. After raising more than $155,000 via crowdfunding and $680,000 from investors, the company scouted out a manufacturing partner in Utah with factories in China to produce the units and ramped up production. Wagstaff and Marrder have since sold their snow bikes in more than 20 countries.

For Wagstaff and Marrder, seeing their vision come to life is a dream come true, but their greatest joy has come from seeing customers gain the ability to ski for the first time. “We get a ton of customers from the adaptive community,” says Wagstaff. “Many of our customers are veterans or other individuals with limitations that prevent them from using traditional skis or snowboards, but they can operate a Sno-Go.”

The duo never dreamed their snow bikes could impact the lives of so many people from across the globe.

Sno-Go recently received two grants from World Trade Center Utah to further its international goals. The company used funds from the State Trade Expansion Program (STEP) Grant to help it locate “an amazing distributor” in Europe, which has become the company’s hottest selling market. The STEP Grant is funded in part through a grant with the U.S. Small Business Administration and administered by WTC Utah.

The company also received a Utah Export Acceleration Grant which is administered by WTC Utah and made possible through a generous contribution by JPMorgan Chase & Co. Wagstaff says that the Utah Export Acceleration Grant “helped us become more knowledgeable about the markets we are currently selling in. We learned what it takes to export products into new countries as well as certain laws in these markets that were super important for us to know.”

For more information about Sno-Go visit www.sno-go.us or call 435-709-5763.

Toolbox: Tip #10 Part 2 – Collecting Payment

World Trade Center Utah’s “10 Tips to Help you Think, Act and Succeed Globally” provide a deeper dive into topics that will help as you pursue international business opportunities.

Cash in Advance

Foreign buyers send payment before goods are shipped. Payments are usually sent by wire via a SWIFT (Society of Worldwide Interbank Financial Telecommunications) transfer. Cash in advance is the most common form of payment. All risk is passed off to the foreign buyer. While this strategy limits your risk, it may not be the most competitive strategy.  

Letters of Credit (L/C)

The cost of letters of credit is higher than other forms of payment, but has become a fundamental method as it offers protection to both buyers and sellers. The bank that issues the L/C acts as an intermediary. They will pay after goods are shipped and required documents are received. Banks will require that the buyer put up a deposit, so buyers will need to have cash available weeks before they receive their goods.

There are some issues with letters of credit. Documentation for L/Cs can be complicated. If L/C numbers are left unlisted from documents, fees can be assessed. An exact shipment date is required, which may be difficult to determine. Additionally, partial shipments may be prohibited. This can cause backorder problems.  

Collections

Collections are also known as documentary collection, cash against documents or payment against documents. When a product is shipped, the seller forwards documentation to a foreign bank until payment is made. Goods should not be released until payment is made.

Open Account

With open accounts, goods are shipped on credit before payment is made. This arrangement is often made after a relationship of trust is built between buyer and seller. This method is relatively simple and inexpensive for both parties. For some sellers, the risk of open accounts will always be too great.  

The key is to minimize risk and try to remain as competitive as possible. For beginning exporters, low-risk options may make more sense. As your international business grows, more risk may be acceptable to gain a competitive advantage.

For more information, or for any other help with your international expansion efforts, please contact the WTC Utah Trade Services Manager Jim Porter at jporter@wtcutah.com.

2018-12-04T21:41:17+00:00