Greenville Business Magazine 2009 October : Page 18
››special business repor t Foreign Trade and the Upstate Economy BY BRANDY WOODS SNOW Photo courtesy of the SC Ports Authority A Dennis Csizmadia,U.S. Export Assistance Center. Photo by Commercial Imaging ny Greenvillian would concur that our area has a definite interest in International business – BMW, Michelin, an international airport, and ICAR. But it might be surprising to learn the impact foreign trade has on the Upstate economy and how small to medium-sized businesses have the potential to profit from our international presence. Current Impact In FY2007, Greenville’s export value topped $9.1 billion or a 51.2 percent share of state activity. During the same time period, Spartanburg checked in at $1.43 billion with 8.0 percent of state share and Anderson at $565 million with 3.2 percent.* There are more than 112,700 port-related jobs in the Upstate region, represent- ing 13.4 percent of the region’s overall employment, which pay $5.3 billion in wages annually. The Upstate accounts for one of three Foreign-Trade Zones (FTZs) in South Carolina, where companies can import materials duty-free, deferring until pending sale or eliminating upon re-exportation.FTZ #38 employs 8,575 people and generates an annual volume of nearly $13 billion through five active subzones and 12 general purpose zones. BMW earned notoriety in 2007 being named the largest and most profitable non-oil subzone in 50 states and Puerto Rico. In addition to the larger-scale inter- national players, Denis Csizmadia, manager at Greenville’s U.S. Export Assistance Center (USEAC), notes there are more than 3,600 exporters in the state, 80 percent of which are small to medium-sized companies. The Global Trading Consortium, 18 GREENVILLE BUSINESS MAGAZINE | OCTOBER 2009
>>special business report - Foreign Trade and the Upstate Economy
Brandy Woods Snow
Any Greenvillian would concur that our area has a definite interest in International business – BMW, Michelin, an international airport, and ICAR. But it might be surprising to learn the impact foreign trade has on the Upstate economy and how small to medium-sized businesses have the potential to profit from our international presence.
Current Impact
In FY2007, Greenville’s export value topped $9.1 billion or a 51.2 percent share of state activity. During the same time period, Spartanburg checked in at $1.43 billion with 8.0 percent of state share and Anderson at $565 million with 3.2 percent.*
There are more than 112,700 port-related jobs in the Upstate region, representing 13.4 percent of the region’s overall employment, which pay $5.3 billion in wages annually. The Upstate accounts for one of three Foreign-Trade Zones (FTZs) in South Carolina, where companies can import materials duty-free, deferring until pending sale or eliminating upon re-exportation. FTZ #38 employs 8,575 people and generates an annual volume of nearly $13 billion through five active subzones and 12 general purpose zones.
BMW earned notoriety in 2007 being named the largest and most profitable non-oil subzone in 50 states and Puerto Rico. In addition to the larger-scale international players, Denis Csizmadia, manager at Greenville’s U.S. Export Assistance Center (USEAC), notes there are more than 3,600 exporters in the state, 80 percent of which are small to medium-sized companies. The Global Trading Consortium, LLC was founded with a mission to create, attract, nurture and link business markets worldwide through an established network. Its immense showroom, originally begun as a Tianjin Commodity Exhibition Center to showcase Chinese-American commodities, now houses various trade-ready products from across the globe. The Tianjin government has established an office in Greenville to provide assistance and facilitate trade.
On The Horizon
There are a host of exciting new developments for the Upstate’s international business community that have the potential to exponentially increase the area’s foreign trade and competitive advantage.
Panama Canal Expansion
The expansion of the Panama Canal by 2014 could potentially increase business for the Southeast region by more than two million containers per year. With the deepest channels on the Southeastern coast and dockside and landside infrastructure, Charleston is ready to capitalize.
“This is a game-changer for foreign trade in South Carolina,” says Byron Miller, Director of Public Relations for the South Carolina State Ports Authority (SCSPA). “It will allow for the passage of bigger ships that can easily access Charleston’s deep channels.” Miller says the expansion will greatly enhance SC’s competitiveness, attracting additional foreign trade opportunities.
Economic Recovery
With a flattening of global trade levels and glimpses of improvement combined with the weakened U.S. dollar overseas, American companies looking to export retain a significant advantage over competition.
“Our finger is on the pulse of Upstate foreign trade, and we’ve seen positive economic upticks,” says Csizmadia. “Overseas companies are looking to replenish their inventory, and Upstate companies are uniquely positioned to expand their business and profit. There’s never been a better time to begin an exportation program.”
Refocus of Port Efforts
The Ports Authority added a new President & CEO, Senior Vice President & Chief Commercial Officer, and sales positions working toward client retention and business development.
“The SCSPA has renewed its sales efforts in response to the tightened market to increase benefits to current Upstate customers as well as attract international investment,” says Miller. “We’ve refocused our core mission on economic development and job creation and expanded our sales force to attract new business to South Carolina’s docks.” The marketing strategy has already landed two major contract extensions while signing on several new customers.
New FTZ Subzones
“It’s important for businesses to understand the benefits of participating under an FTZ,” says Suzan Carroll-Ramsey, Foreign-Trade Zones #21 and #38 Property Manager. “These areas allow companies to import materials duty-free and defer duty to closer to sale or eliminate duty for re-exportation, freeing up capital for other programs or investments.”
FTZ #38 has recently added on two new subzones: #38H as adidas Sales, Inc., apparel and footwear warehousing and distribution, and #38I as Cornell-Dublier, a manufacturer of aluminum capacitors. Additionally, #38A BMW demonstrated an exceptional increase in exporting by nearly 70 percent of production during FY2007.
Growth Into New Markets
According to Csizmadia, the top growth markets in 2008 were Saudi Arabia, Taiwan, United Arab Emirates, France and Brazil. Upcoming trade missions to Korea, Chile, Peru, Italy, Turkey, Mexico, Singapore, Malaysia, and Vietnam are scheduled for 2010 in an effort to expand opportunities in these areas. An expected Free Trade Agreement (FTA) with Colombia is awaiting ratification by Congress, and will be the newest FTA market closest to Upstate companies.
Interested? Try Here.
“Any product has the potential to be exported and marketed overseas,” says Csizmadia. “The problem? Many businesses, especially the smaller shops, are intimidated by the prospect of going international and don’t know where to begin.” For these interested parties, there are resources available to assist in arranging trade meetings, ensuring compliance, developing marketing strategy, and navigating cultural barriers.
Agencies available to companies interested in taking their products outside the United States, include:
United States Export Assistance Center www.export.gov
SC State Ports Authority
www.scspa.com
SC Department of Commerce
www.sccommerce.com
Global Trade Center
www.globaltradepark.com
SC International Trade Coalition
www.buyusa.gov/southcarolina/
scitc.html
ECI-Find New Markets
www.findnewmarkets.com
South Carolina District Export Council www.scdec.org
Global Trading Consortium, LLC
www.gtcgreenville.com
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