By Jamie Smith Hopkins, The Baltimore Sun
September 29, 2013
Glen Burnie food products company Allied International Corp. might have a global-infused name, but it sold nothing outside the country before 2008.
Now it exports to 45 countries, accounting for nearly 20 percent of the small firm's revenue.
This is exactly what export proponents want to see more of in the Baltimore region — and nationally — as a way to propel economic growth. Exports accounted for an expanding but still fairly slim portion of the metro area's economic activity last year.
"Eighty-five percent of all economic growth in the next five years will be coming from outside the U.S.," said Ryan Donahue, a researcher with the Brookings Institution's Metropolitan Policy Program. "For metro areas to continue growing, they can't really afford to ignore [the rest] of the world's economy."
A 2012 Brookings report recommended that the Baltimore region shore up a long-diminishing manufacturing sector by helping more companies export. The Washington think tank saw it as a way to reverse a long-running trend in which growth in low-wage jobs has far outpaced that of middle-income and high-wage fields in the region.
A new Brookings report on exporting, released this month, ranked the Baltimore region 32nd among the largest 100 metro areas for the value of its locally produced exports — an estimated $11.7 billion last year. That doesn't account for products made elsewhere and shipped out of the port of Baltimore, a popular export destination for automobiles made in the Midwest.
Locally produced exports accounted for a larger share of the region's economy last year than they did a decade ago, but smaller than in most other large metro areas, Brookings said. Exports made up more than 13 percent of the nation's economic activity, compared with just under 8 percent locally.
Donahue, who co-wrote the recent export study, sees plenty of growth potential here and elsewhere. Just 4 percent of U.S. companies do any exporting, he said, and the majority sell into just one foreign country. Economic development groups could help firms get started by connecting them with export-assistance programs and working to promote the region's specialties overseas, he said.
"There are a lot of, I think, untapped opportunities," he said.
The Baltimore region's biggest export categories are precision instruments, pharmaceuticals and aircraft products, according to Brookings. But service-related exports are close behind, including financial services, research-and-development services and management and consulting work.
The region's exports, in fact, are more heavily weighted toward services than the country's as a whole. Forty-five percent of the area's exports are services, compared with 29 percent nationwide.
Development Design Group falls into that category. The Baltimore design, architecture and planning firm — which goes by DDG to avoid the otherwise inevitable translation hassles — has worked in about 70 countries over the past 30 years. It started life as a U.S. branch office of an overseas firm and later spun off as an independent company.
These days, DDG has projects in places as diverse as Sri Lanka, Venezuela and Canada.
The company's Brewers Hill studio is "a whole mini United Nations" full of multilingual people, said Ahsin Rasheed, DDG's CEO. (In addition to English, Rasheed speaks Urdu, Punjabi, Hindi and a bit of Arabic and Persian.)
Rasheed counts himself as a beneficiary of the company's international focus. A native of Pakistan, he came to the United States for college and became a citizen after DDG sponsored him.
International business has also proved critically important to the company's bottom line — particularly when the U.S. housing bust and financial meltdown battered architecture firms. As exports kept growing and domestic work dried up, DDG went through a stretch in 2009 when all of its work was overseas.
Even now, international contracts account for about 85 percent to 90 percent of total business, Rasheed said.
"We were able to respond to the crisis … in a much more positive way," he said.
DDG is an old hand at exporting, but some companies have pushed into global markets more recently. Baltimore-based Barcelona Nut Co. began selling outside the country this year, following a years-long international sales effort by sister company StoneHedge Farms in Pennsylvania.
"It's such a big world out there and there are so many opportunities," said Tony Tsonis, president and owner of both companies, which together employ 75 people. "We've had good success on the popcorn side, and we've had some early success on the nut side, so we're hoping to really expand there as well."
Barcelona Nut is selling its Baltimore-manufactured products in Korean and Chinese markets. StoneHedge Farms popcorn — made in Dover, Pa. — is going in more directions, from Asia to Europe to South America.
Communication is only one challenge in international markets, Tsonis said. But the potential is so big, he said, it doesn't make sense to ignore foreign business.
Some companies — Barcelona Nut included — have turned to trade-assistance groups to get a toehold in new markets. The Southern United States Trade Association, for instance, connects smaller food and agriculture firms in Maryland and the South with foreign players and federal aid.
Companies can qualify to have half their international marketing costs reimbursed through a U.S. Department of Agriculture program. They can also sign up for association-organized overseas trade missions and domestic events with international buyers.
The trade association put on an event Thursday in Baltimore alongside the Natural Products Expo East convention, for U.S. companies to get one-on-one time with Chinese and Korean buyers.
"If nothing else, they're getting feedback," said Danielle Viguerie, the association's marketing and communications director. "But also, we see a lot of direct sales coming out of these trade missions."
Allied International, the Glen Burnie food products company, sent employees to 11 international trade shows last year with the trade group's help. This year, they've been to events in Japan, China, Australia, South Africa and the United Arab Emirates.
Shaun Akhavan, Allied's director of exports, said Allied executives tried to crack into international markets on their own in 2008 and found it far too complex and expensive for a small company. (The firm employs 21 today.) He said he appreciates the trade group's help in setting up meetings, providing interpreters and keeping costs down.
Allied sells several hundred items, from cereal to snacks, that contract manufacturers make for the company under brands such as Sunrise Valley and Forrelli. Within the United States, the products go to discounters, and the competition on price is tough, Akhavan said.
The international market, he said, is actually an easier sell.
"I think anybody that's in business today can benefit from exports," he said. "They should not shy away."
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