Maine group buoyed by trade mission to China

Gov. Paul LePage speaks in Hong Kong to an audience of seafood importers, distributors and hotel/restaurant buyers at a Maine lobster tasting event during the trade mission to China.
Contributed photo
Gov. Paul LePage speaks in Hong Kong to an audience of seafood importers, distributors and hotel/restaurant buyers at a Maine lobster tasting event during the trade mission to China.
By Whit Richardson, BDN Staff
Posted Sept. 17, 2012, at 7:31 p.m.

PORTLAND, Maine — Several Maine businesspeople returned over the weekend from Maine’s trade mission to China encouraged about the potential for increased exports and partnerships with the world’s second-largest economy.

The goal of the trade mission, organized by the Maine International Trade Center, was to generate interest and investment in Maine, its companies and products. How successful the mission was at accomplishing those goals is hard to say in the immediate aftermath of the trip, according to Janine Bisaillon-Cary, president of the Maine International Trade Center.

Past trade missions, depending on the destination market and the types of industries involved, resulted in between $3 million and $8 million in sales for the companies involved. The most successful trade mission MITC has organized in terms of sales was the one in 2009 to Spain and Germany, which resulted in more than $20 million in sales for the companies involved, including a “number of energy companies that were negotiating large deals,” she said.

Past governors have led trade missions to Asia, but this was the first gubernatorial mission to mainland China, Bisaillon-Cary said. Gov. Angus King led a mission to Taiwan and Hong Kong in 1999. Gov. John Baldacci led a mission to Japan and South Korea in 2007. Maine companies also have traveled to China in the past, but they’ve been industry-specific. For example, a group of Maine boat builders traveled to an international boat show in Shanghai in 2007.

During the mission that ended Friday, representatives from 13 Maine businesses and organizations participated, sitting down for a total of 77 matchmaking meetings over the course of a week in Hong Kong and Shanghai, said Bisaillon-Cary, who claimed it was “the most aggressive schedule I’ve ever developed for a governor’s group.”

China is a growing market for Maine products. Maine exports to China, valued at $275 million in 2011, are up 97 percent over the last five years, Bisaillon-Cary said. China is the state’s third-largest foreign market, and is expected to continue to grow as an export market for Maine businesses, Bisaillon-Cary said. “Europe is dead right now,” she said. “China and Asia is going to play a larger and larger role for our exporters.”

Gov. Paul LePage also joined the trade mission, his first while in office. LePage is the first Maine governor to lead a trade mission to mainland China.

“We are here to tap into this country’s growth and opportunity and make those face to face connections,” Gov. LePage said in a statement while in China. Joining the governor on the mission were George Gervais, commissioner of the Department of Economic & Community Development, and John Butera, LePage’s senior economic adviser. The DECD has a press conference scheduled for Tuesday morning to discuss the results of the mission.

Several Maine businesspeople who participated in the trade mission were positive it would result in increased business.

Bill Putnam, president at Yale Cordage, a high-tech rope manufacturer in Saco, wrote in an email that the trip helped him “better understand the world economy and the opportunities available” in China.

Putnam, who extended his trip and is now in Shandong province, said Yale Cordage currently does “limited business” in China, and what it does do is mostly through European distributors. It’s too early to tell if the relationships formed during the trade mission will result in added export business, but Putnam said there was “significant interest” from potential business partners.

“I do not think you could be successful if you do not meet and get to know your partners, and the opportunity provided by the trade mission allows for an effective introduction to the country,” he said. “Relationships are everything in this country.”

Another company that participated in the trade mission was Lighthouse Imaging, based in Portland, which designs and manufactures optical equipment for the medical field. The company sent Dennis Leiner, its chief technology officer; because he extended his trip and is still in China, he was unavailable for comment.

Mark Waite, Lighthouse Imaging’s CEO, said the company has done a small amount of business in China for the past decade, but a year ago initiated a more concerted effort to grow its exports to the country, including signing a new distributor in Hong Kong. Participating in the trade mission and the face-to-face business meetings will help fuel that growth, said Waite.

“A lot of what we were able to do on the trade mission is have some of the technical discussions we’ve needed to have with people in the Chinese government and various medical experts,” Waite said. “This will help us become in their eyes more qualified as a vendor or provider of products to be sold into the Chinese market. I expect great things to happen and start to ship products in that direction instead of it all coming this way.”

Other organizations and companies were there for other reasons. The University of Maine sent Ivan Manev, dean of the College of Business, Public Policy and Health, to help build the foundation for more student and teacher exchange programs with Chinese educational institutions. Overall, he met with representatives from four universities and said the trip was “very successful.”

China, as “a rapidly rising global giant,” offers “tremendous opportunities” for UMaine’s business school graduates who may be interested in going to the Far East, he said. Currently, UMaine’s business school has only one student studying abroad in Shanghai, whom Manev visited during the trip. He hopes the new partnerships he discussed during his trip will help fuel increased interest among UMaine students to study in China.

Last year, the University of Maine had 89 students and 10 visiting scholars from China, Manev said.

Another company that participated in the mission was Saddleback Maine, the ski resort in Rangeley. But instead of selling a product, Chris Farmer, Saddleback’s general manager, went to China looking for investors.

Farmer also serves as president of USA Lifestyles Inc., Maine’s first Regional Center within U.S. Citizenship and Immigration Services’ Immigrant Investor Program, also known as EB-5.

Under the EB-5 program, foreign nationals who invest at least $500,000 in businesses within a designated rural or high-unemployment area, in this case Franklin County, and create at least 10 jobs, can receive a green card as a result.

Farmer had several meetings with registered agents in China who can solicit the investments in EB-5 programs. The first program that USA Lifestyles is soliciting investments for is a $15 million to $20 million expansion at Saddleback, Farmer said. The China trip was a chance to see how it should structure the investment opportunity to make it attractive to Chinese investors.

The EB-5 program’s end goal is new jobs, Farmer said. If the jobs aren’t created, the green cards aren’t issued, he said. But he thinks USA Lifestyles will start pulling in investments from China within the next six to 12 months, he said.

“I think there’s a lot of potential to do some projects in Maine, and over the next two years we could create a lot of jobs in this state,” he said.

Many of the Chinese families that have sent their children to Maine schools develop relationships with the state and are interested in the EB-5 program and its potential for permanent residency in the United States, Bisaillon-Cary said. In the past, Maine has had to direct those interested investors to Vermont, which until now had the closest EB-5 Regional Center, Bisaillon-Cary said.

Investments from Chinese companies or individuals made in Franklin County would be a milestone, Bisaillon-Cary said. The only Chinese investment in Maine that she currently knows about is Hong Kong-based International Grand Investment Corp.’s purchase in October 2010 of the pulp mill in Baileyville. In fact, Bisaillon-Cary met with representatives of IGIC when the group was in Hong Kong to discuss the pulp and paper industry and other potential growth areas.

“I think they’ve been happy with the results they’ve had so far,” she said.

Bisaillon-Cary is hopeful other Chinese companies and individuals will invest in Maine businesses, and not just in Franklin County through the EB-5 program. Promoting the Maine brand and seeking investment interest were the governor’s goals for the mission, she said. There was interest shown in several Maine industries, including renewable energy, biomass, wood products, information technology and seafood, she said.

Chinese investment in the United States has been on the rise as Chinese companies and individuals look for ways to diversify their funds. In 2010, Chinese investment in the United States was $3.15 billion, an increase of $1.2 billion from the year before, Bisaillon-Cary said. “I hope to get some of these potential investors to come over to Maine in the next six months to a year,” she said.

The Maine International Trade Center plans to survey the participating businesses over the next several weeks to gauge the immediate results of the trip.

In addition, Annette Bossler, managing director of MITC’s Invest in Maine initiative, will return to China in November to follow up on some of the relationships sparked during the mission, Bisaillon-Cary said.

“I think that’s critical to mention because finding these leads and making these introductions is one thing, but the most important thing is the follow-up,” she said.

http://bangordailynews.com/2012/09/17/business/maine-group-buoyed-by-trade-mission-to-china/ printed on September 22, 2014