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Companies encouraged to be wise with exports
By CARYL VELISEK
HANCOCK, Md. (April 7, 2015) — For small and mid-size food companies considering a move to the export market, specialists in that area told them it’s definitely an option, but preparation and using available resources are keys to success.
“It’s not as complicated as it might seem,” Andrew Kreinik, senior growth consultant with the University of Baltimore’s Small Business Development Center,said at a first-ever seminar in Western Maryland last week. “But it’s important to understand import and export regulations and I can assist with that.”
Kreinik, said that anyone who has a website has the makings of an internet business with sales potential.
His advice included, “Be flexible, develop a relationship, have patience and get to know the people you will be dealing with before you get to business.”
One resource for the companies is the Southern United States Trade Association, it covers 16 states including Maryland and Virginia, said Danielle Viguerie, SUSTA’s marketing director, and works with small companies that wish to export to foreign markets.
“We implement programs and work with state agriculture departments and are geared to exporting food and agriculture,” she said.
According to SUSTA, Canada consistently ranks as one of the top importers of U.S. food and agricultural products with sales reaching a record $21.7 billion in fiscal 2014 and includes fresh fruits, vegetables, prepared foods and snack foods.
China is the largest international market for U.S. food and agricultural products accounting for 20 percent of all U.S. farm exports.
Good prospects to China include dairy products, juices, pecans and value added foods, with the European Union being the fifth largest agricultural export market where there has been increased demand for many items including snacks and ethnic foods.
Japan ranks fourth in the United State’s for ag exports and is a good opportunity for those willing to follow the strict Japanese regulations, Viguerie said.
You must have a branded product and you must know and follow each country’s regulations, she added.
Poultry, dairy, pork and beef rank among top export items and the biggest spike has been with the middle class in developing countries.
Some criteria for exporting in the small to mid-size business category are: Is your company small by Small Business Administration’s guidelines?; Do your product labels contain an origin statement such as “Made in the U.S.A” or “Product of Maryland”?; and Do your products contain at least 50 percent U.S. agriculture content?
There are logistics, Kreinik added, like how to get your product to the customer, packaging and labeling requirements that may be different in each country.
“Do the research,” he said, “Ag Foreign Service can help.”
Kreinik also said to make sure to understand payment method. “It can be different when selling overseas,” he noted.
John Strayhorn, president of Global Insurance Services in Washington, D.C., talked about payment procedures, letters of credit, and the importance of having Short-Term Export Credit Insurance.
“Banks will not lend against uninsured foreign receivables,” he said, “and credit insurance is assignable to your bank for the purpose of expanding your borrowing base to include insured foreign receivables. With a larger borrowing base you have greater financial flexibility.”
Also on the program were Theresa Brophy of the Maryland Department of Agriculture, Leslie Hart, Washington County agriculture business development specialist, and Lin Hwang, vice-president of J&R Seafood, Inc. of Cambridge, Md., who exports overseas.
Hwang said relationships are important in some countries, and often, getting to know the families with certain companies when exporting, is very important as well as knowing the palate there.
Melissa Lindsey, Marketing coordinator for SUSTA, talked about some of the requirements with exporting through SUSTA, including that the company must be headquartered in the United States, the importance of attending trade shows and how to find events to promote a product.