Newsletter – February 2019
WTC Utah president and CEO Miles Hansen presenting at the Taking Utah Tech to the World seminar on Jan. 8, 2019.
When it comes to promoting the state’s best business and investment opportunities to the world, World Trade Center Utah proudly leads the way. But we recognize that the state will have a stronger, more unified voice by working closely with industry and government leaders that are part of “Team Utah.” By mobilizing Team Utah via our new trade show working groups, we strengthen our ability to accomplish our mission to lead the state’s international business development and elevate Utah’s global status.
The process for a successful trade show begins six months prior. The first business delegation to utilize the working group process from start-to-finish just finished exhibiting at ISPO Munich, the world’s leading trade fair for the outdoor recreation industry. Because of their innovative products and readiness to export, Coalatree, Cotopaxi, Dark Energy, DPS Skis, Drift, Fortress Clothing, GRIP6, Hand Out Gloves, SNO-GO and UltrAspire were identified and selected by our outdoor industry working group. Once selected, the companies utilized the working group’s connections and coaching to prepare for a successful experience. While at the show, the companies grew their networks, found business partners and opened doors for Utah exports and foreign investment.
In 2018, WTC Utah organized 9 trade missions and trade shows to 10 countries, in which 80+ Utah companies connected with potential customers and partners to increase their international reach. From those endeavors, Utah companies generated nearly $60 million in new trade and investment opportunities for the state. Utah-based DPS Skis participated in the 2018 trade mission to Taiwan and South Korea and landed $5 million in new sales on the trade mission with an expectation of significant growth in Asian sales. In November, life science company Maxtec joined WTC Utah at the MEDICA Trade Fair in Germany and expects its annual sales to grow more than 10 percent due to its participation in the trade show with increased sales to India, Japan and China.
As we increase our efforts in 2019 with 12 trade missions and trade shows, which are coordinated by WTC Utah in partnership with the Governor’s Office of Economic Development (GOED), our working groups are improving our return on investment. Through increased collaboration, the working groups leverage their collective expertise to identify and recruit export-ready Utah companies, create strategies for arranging meetings at the shows, plan training sessions and briefings, reach out to foreign firms and investors and design show strategies that maximize the value for trade show/mission participants. Additionally, utilizing the working groups will eliminate the duplication of resources among our strategic partners.
In addition to our outdoor industry working group, WTC Utah has also developed working groups for the life sciences, aerospace/defense and advanced composites industries to prepare for this year’s delegations. You may have noticed a trend with the types of trade shows we have selected for participation in 2019. This is a strategic move designed to help grow the state’s strongest industries. By supporting these clusters, we help create sustainable advantages around emerging and mature sectors that create the most jobs. The trade shows and trade missions selected for 2019 are as follows:
- ISPO in Munich, Germany – Feb. 3-6. As a pure B2B trade fair, ISPO Munich is an important event for all outdoor recreation companies.
- Avalon Airshow in Geelong, Australia – Feb. 26-Mar. 3. The Avalon Airshow is one of Asia-Pacific’s most prestigious aviation and aerospace conference events.
- JEC World in Paris, France – Mar. 12-14. JEC is one of the world’s leading composites shows, with exhibitors and attendees coming from multiple industries.
- BIO Korea in Seoul, South Korea – April 17-19. A Utah delegation of life science companies and organizations will travel to Seoul for two days of networking, knowledge transfer and investor connections.
- Paris Air Show in Paris, France – June 17-23. Governor Gary Herbert will lead the Utah delegation to the 53rd International Paris Air Show. In conjunction with the Paris Air Show, Gov. Herbert and part of the delegation will make business and diplomatic visits to Russia and Italy beginning on June 12. Fill out this form for more information.
- DSEI in London, United Kingdom – Sept. 10-13. DSEI is a leading defense, security and equipment show that connects leaders and the global defense and security supply chain on an unrivaled scale.
- Japan and Hong Kong Trade Mission – Sept. 16-20. Continuing to build on our trade relationships in Asia, Governor Herbert will lead this trade mission in the final quarter of the year.
Ultimately, the success of the working groups will be measured by the resulting new trade and investment opportunities for Utah companies, the success of participating organizations and Utah’s elevated status in the global economy. By strategically leveraging Utah’s intellectual, financial and global capital, we can mobilize Team Utah to promote prosperity and build economic resilience statewide.
Call to Action: WTC Utah wants your participation in our trade mission and trade show working groups. As a partner, participant or program sponsor, there are many ways for you to be a part of Team Utah’s international engagement. For more information on the 2019 Governor-led European trade mission, fill out this form. For a list of trade shows and trade mission on the docket for 2019, visit: https://wtcutah.com/trade-shows/
Going Global: Quantum IR Technologies LLC
Headquartered in Salt Lake City, Utah, Quantum IR Technologies is a global software company that offers patented, real-time thermal detection technology using digital infrared data. The company is an industry leader in applying software automation to precision infrared (IR) sensor radiometric data for a wide range of industries and solutions.
Founder and CEO Mark Israelsen says Quantum IR’s patented infrared software interprets thermal data from cooled infrared cameras for thermal measurement and reporting. The software can be applied to any object based upon its IR/thermal signature and temperature, enabling enterprises to offer automated alerts, real-time reporting, high-temperature process management and other actionable data to their customers.
Founded in 2012, Quantum IR (QIR) first developed infrared automation software for the oil, gas and steel industries. For the oil and gas industries, the software takes digital data from high-speed infrared cameras to monitor high-temperature equipment and processes and detect hydrocarbon and carbon monoxide gas leaks in real time. Next, the company tweaked its software for the steel industry to take thermal data and optimize the quality of steel.
For the past three years, QIR has been pursuing opportunities outside of the U.S. Through its international strategy, QIR regularly attends international trade shows to showcase its product to leading industry producers. Last year, the company began focusing its expansion into Asia due to strong demand from countries with fast-growing economies such as Vietnam, Thailand and Malaysia. The company used an export acceleration grant from World Trade Center Utah, which is made possible through a generous contribution by JPMorgan Chase & Co., to double its sales in Southeast Asia and fund its international expansion efforts. Specifically, the 2018 grant was used to gain international certification for its IR camera environmental housing in order to comply with industry standards in these countries. This IR camera housing is being built in Logan.
“Going international really made sense for our business. There are many steel, gas and oil companies outside of the United States that could really benefit from our software,” says Israelsen. “The Export Acceleration Grant has been crucial for our expansion efforts into Vietnam. It has led us to new opportunities within the region, which has given us a leg up against our competitors.”
With the funding, the company visited Vietnam several times and connected with new companies and potential distributors. While abroad, QIR leaders signed a sales partnership with a subsidiary of PetroVietnam in the oil and gas industry.
“Without the grant funding, we would have struggled to export our software technology to Vietnam,” Israelsen continues. “It has given us the capital to go beyond marketing and software demonstration in the region.”
As QIR’s presence in Southeast Asia grew, its export sales increased, jumping by $4.5 million in 2018. The company also made significant strides to adapt its software to the fertilizer production and the coal-fired power generation industries in the region.
The company is organized with management, sales and support in Salt Lake City, research and development in Logan, software development in Carlsbad, CA and Asia sales and support in Bangkok, Thailand.
QIR’s technology and industry expertise provides the company with unique competitive advantages in each of its markets, where it applies its technology to both aerial-based IR detection solutions and ground-based infrared detection using standoff staring array IR technology. The majority of uses possessed by today’s infrared technology rely on visual interpretation done by an operator looking at an image produced by these IR sensors. QIR’s key competitive differentiator is its ability to apply software automation in interpreting thermal data, which provides automated alerts, real-time reporting, predictive maintenance management and other actionable data to QIR’s customers.
Furthermore, QIR is a systems integrator for the FLIR Corporation, integrating QIR’s software solutions with FLIR infrared cameras, including the FLIR machine vision, automation, optical gas detection and security IR cameras.
“Our customers include major global oil and gas companies, leading steel manufacturing companies, large power generation companies and U.S. Federal and State agencies,” says Israelsen. “We team with world-class technology partners to integrate and deliver our solutions, including: FLIR infrared cameras, Infratec infrared cameras, Tecnovideo camera housings and Integrity Applications Inc. complex software development.” For more information about the company visit www.quantumir.com or call (888) 662-0999.
Market Report: Russian Federation
In June, World Trade Center Utah will organize a delegation of Utah businesses and organizations to join Gov. Gary R. Herbert and the Governor’s Office of Economic Development (GOED) for a state-led trade mission to the Russian Federation and Italy in conjunction with the 53rd International Paris Air Show.
According to a report by PricewaterhouseCoopers, the Russian Federation has huge potential for foreign business endeavors, despite its 40th rank among 190 countries by the World Bank for ease of doing business and its significant bureaucracy and corruption. What’s more, by 2050 the Russian economy is expected to be the largest in Europe based upon GDP.
Obviously, there are a lot of risks with doing business in Russia, but Export.gov says the United States is committed to supporting the trade and investment relationship between the United States and Russia in non-sanctioned sectors of the economy. The Foreign Commercial Service (FCS) at the U.S. Mission in Russia serves as an important resource for both U.S. and Russian businesses seeking to develop and expand new relationships. FCS had helped Russian and American firms introduce innovative technologies and increase investment, strengthening ties between the two countries.
Despite its significant challenges, Russia presents opportunities for experienced American exporters. Russia’s 2014-2016 economic downturn, driven by low oil prices and a lack of structural economic reform, squeezed both Russian corporations and the average consumer. While targeted American and European economic sanctions remain in place, there is no overall trade embargo on Russia. In 2016, more than 1,000 American firms of all sizes were doing business in Russia, serving the country’s more than 142 million consumers, including a growing middle class and highly educated and trained workforce.
Export.gov says there are two broad considerations when thinking about business prospects in Russia: geopolitics and market dynamics. Russia’s continued aggression in Ukraine and Syria and interference in the 2016 U.S. elections have certainly raised tensions with the United States and its allies. Furthermore, U.S. and European economic sanctions instituted in 2014 and 2017 targeting offshore, Arctic and shale oil and gas, the financial sector and the defense industry remain firmly in place. In addition, a number of other Russian entities and individuals are also subject to sanctions, requiring American firms to do careful due diligence on potential business. Increasing state dominance of the economy, high borrowing costs and a lack of broad economic reform constrain growth. Meanwhile, U.S. agricultural exporters have been hit with Russian countersanctions.
Nonetheless, large, publicly-traded U.S. multinationals and small and medium-sized enterprises continue to carefully monitor the overall business climate in Russia, balancing opportunity and risk. For additional information on Russia sanctions legislation applied by the U.S. Government since 2014 please visit the following resource center: https://www.export.gov/article?id=US-Sanctions-Information-Related-to-Ukraine.
As for market-based considerations, Export.gov says both Western and Russian firms are exercising cautious optimism. In 2017, Western and Russian firms reported year-on-year growth in large industrial equipment in the mining, energy and heavy construction sector, while the retail and residential construction sectors remained weak. A Treaty on the Avoidance of Dual Taxation and Russia’s WTO accession in 2012 helped create new opportunities for American trade and investment through more certain and predictable access to the market across tariff, trade rules and dispute resolution platforms.
Export.gov also notes that U.S.-Russia trade reached more than $20 billion in 2016, well off its peak of $38 billion in 2013. American investment in Russia was about $9 billion in 2015. “These figures are low and conservative, as they do not include third country trade and investment flows of U.S. origin and reinvested earnings from subsidiaries of American parent corporations. Numbers aside, American firms view the Russian market as a long-term, strategic play given its population, natural resources, growing consumer class and access to a low-cost labor force,” the website says.
Toolbox: Tip #10 Part 4 – Tax and Accounting Issues
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.
Transfer pricing applies when two related parties, such as the domestic headquarters of a company and its foreign subsidiary, buy and sell goods to one another. Without government regulation, companies would set the purchase price where taxes would be minimized. Nothing is really being sold in this scenario, but transferred.
The rules of transfer pricing are varied. A good rule of thumb is to use a price that you consider justifiable if this sale was made to a non-related party. Your company can then show it would use the same price for companies in which it does not hold financial interest.
Duty drawbacks apply to exports that contain components or raw materials that were originally imported into the United States. A drawback is a refund on the import duties of these components and raw materials. Drawbacks apply both to goods that are exported in the same state in which they are imported as well as goods that transform raw materials into something new.
Canada and Mexico are an exception to this rule. Drawbacks do not apply when exporting to Canada or Mexico if the imported good was transformed into another good in the U.S.
The system for receiving duty drawbacks is fairly strict in order to prevent fraud. Prior to exporting, the exporter must file a drawback proposal to the regional commission of customs. Additionally, exports must maintain significant documentation about the importation of the original goods.
For more information, or for any other help with your international expansion efforts, please contact Jim Porter, WTC Utah Trade Services Manager, at firstname.lastname@example.org.
|Feb. 12||World Leaders Lecture Forum: Vicente Fox|
|Feb. 13||Snow College International Business Summit|
|Feb. 15||Diplomatic Luncheon with Austria|
|Feb. 21||Last day to register for WUSATA Pavilion at HOFEX Trade Show|
|Feb. 26 – Mar. 3||Avalon|
|Mar. 8||International Women’s Day Celebration|
|Mar. 12 – 14||JEC World 2019|
|Mar. 19||Diplomatic Luncheon with Hungary|