Maine exports between 2009 and 2010 like ‘night and day’

Zach Hamilton works on cutting the flange from the hull of a Sabre 46 after it was removed from the mold at Sabre Yachts' Rockland facility on Friday. The company produces high-end power and sail boats.
Zach Hamilton works on cutting the flange from the hull of a Sabre 46 after it was removed from the mold at Sabre Yachts' Rockland facility on Friday. The company produces high-end power and sail boats.
Posted March 11, 2011, at 7:10 p.m.
Eric Zelz | BDN

Maine’s seafood export business did not have a good year in 2009, as the global financial crisis took firm hold of consumer and business spending decisions.

The state’s seafood exports dropped from $197.6 million in 2008 to $180.4 million in 2009, according to the latest numbers from the Maine International Trade Center.

“In 2009, in the food business, in seafood specifically, the lack of confidence, the confusion, the state people found themselves frozen in their desire to do things,” said John Norton, president and CEO of Cozy Harbor Seafood in Portland. “We’re talking about consumers, as well as companies that service the consumers — nobody knew what was coming down the pike.”

Overall, Maine exports dropped 26 percent from 2008 to 2009.

Luckily, 2009 only lasted for a year before the much better 2010 came along, bringing a “night and day turnaround” for seafood exports — and for Maine exports as a whole.

“By early 2010, I think people were no longer quite so shell-shocked,” said Norton. “While they were careful, they had the belief that the world was not coming to an end.”

Maine seafood exports jumped almost 60 percent, up to $287.4 million. And Maine exports overall — led by mainstays including semiconductors, pulp and paper and wood products, hit a record high of $3.14 billion — a 41.11 percent increase from 2009.

In terms of growth from 2009 to 2010, Maine saw the second highest rate of growth in the nation as a percentage of sales. U.S. exports jumped 21 percent in 2010; Maine almost doubled that growth.

Foreign money is important for the nation and for the state, as it represents fresh capital coming into the economy, noted Janine Bisaillon-Cary, president of the Maine International Trade Center, which recently released the latest trade data.

“It’s no secret that both exports and foreign investment are probably some of the most important things in terms of getting new capital into the state, and then also developing outside markets to be able to bolster our companies and grow them,” said Janine Bisaillon-Cary. “Regionally, the Northeast isn’t in a particular growth mode. There have been some recent reports how most of the growth has been out of the Southwest of the nation. We have to get more of our companies developing nationally, and definitely we have to be doing more on international development — that’s where we’re seeing the growth.”

The state’s export numbers are always dominated by semiconductors produced at the South Portland plants of Fairchild Semiconductor and National Semiconductor and by the pulp and paper put out by Maine’s mills. A quick check of Maine-based Fairchild’s annual numbers for 2010 shows a jump in profits as the computer chip maker’s end markets came back. In 2009, Fairchild saw a net loss of $60 million. In 2010, it saw profits of $153 million.

Electrical equipment, pulp and paper all saw big drops in 2009, followed by big gains in 2010.

“Semiconductors and pulp and paper represent such a huge part of our numbers that those always are the drivers,” she said. “What we like to look at is where’s the growth in other industry sectors. Are we diversifying our exports both in terms of number of countries exported to and the types of product exported?”

One of those sectors that’s expanding its foreign sales is the boat-building industry, said Bisaillon-Cary. Maine exported $16.9 million in ships in 2008, $12.9 million in 2009 and $17.4 million in 2010.

Part of the reason for the increase is that the traditional high-end boats Maine yards produce are becoming more and more technologically advanced with some of the vessels now able to be docked using joysticks.

Bentley Collins, vice president of marketing and sales for South Casco-based Sabre Yachts and Rockland-based Backcove Yachts, said the trade numbers reflect what his company has seen.

The company has dealers and representatives in place around the world to increase exports, said Collins. The company would like exports to be roughly 25 to 30 percent of production. Currently the Backcove yachts are at about 20 percent, and Sabre is in the 15 percent area, he said.

Last year, markets included Canada, Holland and the United Kingdom. The company is also doing increasing business in Australia, thanks to a native Mainer who’s working in a boat dealership in Sydney who has taken to selling the yachts from his home state.

Looking at the Asian market, Japan is OK, said Collins, Hong Kong is good and China is difficult. The market there hasn’t yet matured, he said. The middle class has yet to be introduced to boating. There’s a group of super-rich who have bought megayachts, but the boats produced by Sabre or Backcove have yet to find a Chinese market.

Both Collins and Norton said there are things the state can do to help them out. In Sabre’s case, Collins noted that there is new container ship service coming to Portland, but that doesn’t help Sabre, which ships entire boats that take the space of up to eight containers. If the state negotiates new shipping contracts, they should be aware of trying to work in shipping agreements for companies like Sabre that ship bulk, he suggested.

For Norton, the general idea was for the state to let private business prosper. He said there are current regulations with regards to lobster tail size that are more stringent in Maine than they are in Canada, Massachusetts or New Hampshire. That constrains Cozy Harbor and other lobster processors from competing in the export market, he said.

“Most of the Maine lobster is exported, either whole or processed,” said Norton. “Hopefully we’ll be able to get some rules and regulations that let us play on a more even playing field — and we will be more effective in the export market.”

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