June 19, 2018
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Should you sell to Asia?

Anne Ravana | BDN
Anne Ravana | BDN
Wade Merritt, director of operations at the Maine International Trade Center in Portland, stands in Seoul's Myeong-Dong section, which is filled with food and clothing vendors, in October 2007.

It takes a dedicated effort, but expanding Maine products into overseas markets is something more businesses should consider. The growth points to Asia.

Asian businesses and consumers purchased about $1.66 billion in Maine products in 2011 — more than double the number in 2002. Expanding into countries like Malaysia and Japan requires collaboration between governments, but it will ultimately be up to companies to complete the sales.

In a state of small businesses, Maine companies face challenges of having enough personnel and know-how to devote themselves to searching out new markets. Boards of directors and CEOs have to be able and willing to give the new endeavor the time and resources needed to make it work.

When starting out, companies must determine how they’ll get a return and how to ship products in a cost-effective way. They have to arrange financing, ensure their bank completes the needed international transactions and find distributors in the destination country. They have to understand that country’s duty rates, tariffs, language and local regulations.

It might seem easier to seek customers in New England or Canada, especially when considering shipping costs from the east coast to Asia (though a new direct flight from Boston to Tokyo may help management teams get to the region faster). It comes down to finding a niche, selling the product at a competitive rate and, if other companies have gotten there first, finding a way to edge them out.

It’s not easy, but there’s potential for rewards — whether through boosting sales or increasing competitiveness. Economies across Asia have grown, while those in the U.S. and Europe have stalled. If sales grow overseas, Maine companies will be more likely to expand and hire more workers at home. And there’s help for Maine companies seeking to grow their markets overseas, such as from the Maine International Trade Center.

Some companies have discovered their niche. Fairchild Semiconductor in South Portland is one of the state’s top exporters to Asia, shipping out electric machinery. The second most in-demand product is for Maine’s wood pulp and paper. Aircraft parts, chemical products, different types of paper products and lobsters come next.

Maine exports the most to Malaysia, then China, Korea, Japan, Singapore, Australia, India, Taiwan and Hong Kong.

U.S. Sen. Susan Collins traveled to Thailand recently to speak at the World Economic Forum. She also attended a trade breakfast at the U.S. Embassy where she met with importers of groceries, lumber and other products. Currently Maine’s trade with Thailand is small — about $5.87 million in 2011.

Maine lobsters are imported into Thailand primarily to be sold as dinners at restaurants. The opportunity for growth is in selling them at grocery stores, Collins said. There is also a demand for lobster products such as frozen lobster meat and lobster stew.

And though Thailand is known for its teak wood, there’s interest in purchasing Maine timber. Thailand already purchases veterinary products from IDEXX Laboratories, which has an office in Westbrook.

Wade Merritt, vice president of the Maine International Trade Center, said some businesses don’t have dedicated international sales employees, so the center supports them with research into whether there are markets for their products. The public-private partnership receives funding through the Maine Department of Economic and Community Development and from membership dues. About 300 companies are members, out of about 2,000 exporters in Maine.

A cultural shift needs to happen at some companies; others can proactively seek more information about overseas markets. The MITC can continue to reach out to businesses and connect them to new opportunities. Maine might not have an abundance of high-level employees with expertise in international sales, but that’s not an excuse. The state can set its expectations high, share information and commit to learning more. Maine’s stake in the global economy depends on it.

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