The export report:

Nevada missing its full potential when it comes to exports

Exported goods and services from Nevada generate $7 billion in sales, but leaders say the state could be reaping more

Chris Morris

Nevada aims to increase exports

Nevada aims to increase exports

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KSNV coverage of the Nevada exports, such as gold, March 7, 2012.

Exporters in Nevada

Nevada has more than 500 exporting companies. The actual number of exporters is higher but unknown, as some exporters don’t register with the state because they don’t need the state’s assistance. But for an idea of what type of products the state is sending across international borders — and what companies are involved — here is a look at a handful of exporters in Southern Nevada:
  • Alarmco Inc.— 100 employees — Security products
  • American Pacific Corp. — 30 employees — Specialty chemicals
  • Armand Manufacturing Inc. — 40 employees — Bags, cart covers, mats
  • Basic Food Flavors — 60 employees — Food products
  • Berry Plastics Corp. — 100+ employees — Injection-molded packaging
  • Gamma Pharmaceuticals — 10 employees — Drugs
  • JCH Wire & Cable — 75+ employees — Custom wire and cable
  • Kalco Lighting — 200 employees — Custom lights
  • Milgard Windows — 87 employees — Windows
  • Nutri Pharmaceuticals Research Inc. — 25 employees — Food ingredients
  • PEPCON Systems Inc. — 30 employees — Chemicals
  • Sante Active USA Inc. — 25+ employees — Homeopathic remedies and products
  • Universal Urethane Inc. — 85 employees — Automotive/racing padding
  • VSR Industries — 100+ employees — High-security locks, keys and sheet metal-fabricated products for cash storage and transport
  • For many Nevadans, “international trade” might mean heading to Walmart in their import cars to buy Chinese-made computers as well as imported desks and chairs to outfit their offices.

    But trade is a two-way street, and economic development officials say Nevada companies sell billions of dollars of goods and services each year to customers in foreign nations.

    Nevada exports of goods are dominated by gold sales, which in 2010 amounted to $2.4 billion —

    40 percent of the value of all state exports. Other big export categories for Nevada are copper (12 percent) and video game consoles, parts and accessories, including casino equipment (7.3 percent).

    Through the first 11 months of 2011, total sales of the state’s exports of goods were about $7 billion.

    That’s a big number, no doubt, but there’s plenty of room for improvement. Utah, whose population of about

    2.7 million people is comparable to Nevada’s, posted $17.3 billion in sales in the same period.

    Utah’s manufacturing base is far larger than Nevada’s, but insiders say Utah also has benefited from larger and more focused economic development efforts, including measures to boost overseas sales.

    Utah’s commitment to promoting exports includes having not only just a state export director, but also global regional directors. Nevada, for its part, has just two international trade officials.

    One example of Utah’s focused effort to boost its exports is its creation in 2006 of a World Trade Center in Salt Lake City that’s actively working to promote overseas sales by Utah companies.

    Utah says its center has assisted more than 1,000 companies with educational classes and seminars, international business development events and networking. The Utah center’s influential sponsors and partners include Wells Fargo Bank, the Salt Lake Chamber of Commerce and the Utah Governor’s Office of Economic Development.

    Las Vegas lacks such a high-profile one-stop shop promoting exports.

    It does have a “World Trade Center,” but it has a travel-oriented mission. The Las Vegas World Trade Center is a partnership between the Las Vegas Convention Center and the International Consumer Electronics Show.

    Besides the Utah model, proponents of diversifying the Nevada economy and boosting exports have pointed to focused export efforts in other states, including the Florida Trade Partners Alliance, the Envoy Program in Pennsylvania, the Washington Export Initiative and the Puget Sound Regional Business Plan in the Seattle area.

    Nevada’s level of exports appears to have been depressed for years by such factors as a general lack of awareness of potentially lucrative export opportunities by local companies, unwillingness of some local businesses to take on the headaches of exporting and the failure of the state to make promotion of exports a top economic development priority.

    “We could do better. We have to focus our resources,” said Michael Majewski, former economic development director for the city of North Las Vegas, who now operates a consulting company called Spatial Economic Concepts.

    Majewski is a member of a group called the Nevada District Export Council, which includes business people and government officials working to educate businesses about exporting opportunities.

    Resources for promoting global trade in Nevada haven’t been abundant, with a Brookings Mountain West/SRI International analysis of Nevada’s state export office last fall calling it “short-staffed and under-resourced.”

    Despite the lack of resources, there are a couple of committed “export czars” in Nevada. One is Andrew Edlefsen, director of the U.S. Commerce Department’s Las Vegas Export Assistance Center. The other is Alan DiStefano, director of Global Business Development in the Governor’s Office of Economic Development.

    In interviews this month, both men agreed exports support Nevada jobs — making this the ideal time to find ways to boost exports so the state can reduce its crippling 13 percent unemployment rate.

    Edlefsen believes that with better coordination among government agencies and business groups, and more knowledge in the business community of exports, the state could boost its exports 50 percent.

    Edlefsen’s goal is to educate more businesses about the Commerce Department’s export-promotion services, including the U.S. Commercial Service, which helps connect U.S. sellers with foreign brokers and other business contacts.

    “Finding the right (foreign) partner is really the main hurdle. That can make or break your deal overseas,” he said.

    Fears about the exporting process and lack of knowledge about it mean lots of local business people are missing out, Edlefsen and DiStefano said.

    That’s because 95 percent of the world’s population and 70 percent of its economic activity are outside of the United States, DiStefano said

    “I come across people every day who have never considered exporting and have never heard of the U.S. Commercial Service,” Edlefsen said.

    Exporting of goods and services obviously isn’t for everyone, but some who have taken the risk say it’s paying off.

    Slammed by the local construction slowdown during the recession, Henderson-based architectural firm Tate Snyder Kimsey in the past few years has broadened its horizons and in the process landed two jobs in China.

    It now offers a Chinese version of its website and has hired a Mandarin-speaking business development officer to develop more work in Asia.

    Windom Kimsey, CEO of the firm, recalled he was in Washington, D.C, talking to the government about design work for embassies when it was suggested his firm needed more overseas experience.

    With some help from Nevada’s congressional delegation, Tate Snyder Kimsey connected with the Commerce Department and eventually paid the agency a few thousand dollars for its services in setting up meetings and events in China so it could bid on jobs there.

    Kimsey said the money was well spent, as Commerce Department employees in China know the language and local customs and helped arrange meetings and events that led to the firm winning contracts valued at up to $1 million for work on a hotel and on high-rise towers.

    “They helped us a lot with making connections,” he said.

    The two jobs have created enough work to keep at least two people employed full time and at times the contracts have involved work by up to eight Tate Snyder Kimsey employees, he said.

    DiStefano, at the governor’s newly revamped economic development office, said he hoped the promotion of exports received more attention as economic development efforts gained refinement and became a higher priority statewide.

    DiStefano’s job involves coordinating federal grant programs in which money from the Small Business Administration and the U.S. Agriculture Department is given to Nevada businesses to promote exports of their products.

    He also coordinates the work of contract agents who promote Nevada products in China, Brazil, Italy, Germany and the United Kingdom.

    With statistics showing every $181,000 in exports supports one job, some 35,700 Nevada jobs are tied to exports — up 1,700 from 2010, he said.

    “We’re one of the few job creators in the state,” he said.

    Boosting exports, however, remains an underappreciated goal in Nevada, DiStefano said.

    He recalled that during the last legislative session he emailed each legislator a list of each known exporter in their district and how many people those companies — more than 500 in all are registered with the state — employed.

    No one offered any feedback, he said.

    “I guess they receive a lot of things in their in-box,” he said. “We need to do a better job of discussing why it’s important.”

    (The actual number of exporters in Nevada appears to be much higher than the 500 or so registered with the state. The U.S. Commerce Department’s International Trade Administration put the number at 2,319 in 2009 — of which 88 were medium-sized or smaller companies with fewer than 500 employees).

    Now that economic development is centralized in the governor’s office, DiStefano hopes Gov. Brian Sandoval will bring legislators together during the next session for a mandatory “Exporting 101” discussion so everyone can grasp the importance of the sector in the state’s economy.

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