Virginia Economic Development Partnership

V I R G I N I A E C O N O M I C D E V E L O P M E N T PA R T N E R S H I P

THE FACE OF BUSINESS HAS CHANGED 12 companies WITH THE VISION to make

exporting a PRIMARY GROWTH STRATEGY

I N T E R N AT I O N A L T R A D E

THE NEW FACE OF BUSINESS Virginia companies have greater opportunities for growth outside the U.S. than any time in history.

In a prerecession economy, most businesses considered international exports a secondary growth strategy.

But in today’s economy, the opportunities are increasingly outside our borders.

87% OF WORLD ECONOMIC GROWTH OVER THE NEXT FIVE YEARS WILL TAKE PLACE OUTSIDE THE U.S.1

95% OF THE WORLD’S CONSUMERS LIVE OUTSIDE THE U.S.2

The 12 diverse businesses profiled in this publication are growing through exports to all corners of the world, but they have two things in common.

THE VISION TO SEIZE INTERNATIONAL OPPORTUNITIES

THE VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP TO HELP THEM FIND THEIR WAY

VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP The Virginia Economic Development Partnership (VEDP) promotes international trade for companies throughout Virginia. Our mission is to increase the number of Virginia companies selling overseas and their volume of international business, year after year. We assist businesses by identifying potential new markets, developing market entry strategies, and locating possible distributors and representatives for products or services—all at little to no cost. See resources available on page 15 of this publication.

1. International Monetary Fund, Office of the U.S. Trade Representative 2. Office of the U.S. Trade Representative and Peterson Institute for International Economics, 2011

Origami by: Yosuke Hasegawa Articles by: Joan Tupponce

AEROPROBE CORP.

A MEASURED—YET GLOBAL—APPROACH Aeroprobe Corp. instruments keep UAVs flying and racecars on the ground all over the world.

From its small facility in Blacksburg, Aeroprobe Corp. has carved a niche for itself in the field of precision measurement.

Its instrumentation and software products are so accurate that they’re in demand by racecar pit crews and the nation’s military.

“The military can’t use a UAV [unmanned aerial vehicle] if the weather conditions are not right. Real-time data allows you to optimize performance,” says Nanci Hardwick, Aeroprobe’s CEO. Aeroprobe’s products collect information on atmospheric conditions around the UAV, measuring things such as air speed, the angle of air and air temperature. Without the accuracy of such data, UAVs could stall and crash, says Hardwick.

Besides the military, Aeroprobe sells to the aerospace, wind turbine, turbo-machinery, automotive and motor sports industries.

Clients include GE, Ferrari, Northrop Grumman, NASA, Boeing and Toyota. The company recently received a contract from NASA to develop a hurricane probe. “Our customers are global,” Hardwick says.

Hardwick is the founder of Schultz-Creehan Holding, a materials consulting firm that merged with Aeroprobe in 2011. “We got involved as a vendor with Aeroprobe,” she says. Aeroprobe saw its sales rise 76 percent in 2011, compared with the previous year.

“This is an exciting time for our company.

We have a pretty aggressive growth plan for this year, too,” says Hardwick.

One of the company’s biggest success stories is the Formula One lightweight racecar market. “If the driver is heading around a curve at just the right speed, and there happens to be wind hitting him at the right speed and angle, the car can go airborne,” Hardwick says. “They use our

products during the race to find out what environment the car is entering, and that information is transmitted to the pit crew so they can be more precise with the car’s speed.”

The company’s instruments range in size from as small as a pen to 9-foot-long turbine blades for wind turbines. Sales are divided equally between domestic and international markets. “Japan is a strong customer base, and the United Kingdom is a big market,” Hardwick says. “France, Brazil and Mexico are growing markets.”

AEROPROBE USES DISTRIBUTORS FOR INTERNATIONAL SALES AS OPPOSED TO INTERNATIONAL OFFICES.

The company uses distributors for international sales as opposed to international offices. Aeroprobe is participating in a state program—Virginia Leaders in Export Trade (VALET)— sponsored by the Virginia Economic Development Partnership. Hardwick says it has been helpful as the company tries to grow international sales. “I had a really large order come in from Korea, and I wanted to do due diligence, and they helped with the research. Their research has yielded new distributors for us.”

The Czech Republic is a good market for Aeroprobe. The company works with the automotive industry in Prague. Matthew Zeiger, Aeroprobe’s vice president of business development, has learned that business is relationship-based in Prague. “We don’t have a problem doing business there,” he says. “All of the technical talk is done in English.”

Hardwick likes the fact that English is typically the international standard for business around the world. Hardwick enjoys working with a global group of distributors, most of whom like to touch base with her on a regular basis. “They like a lot of communication. They like progress reports.”

The company’s distributor in the Czech Republic is an avid fan of Skype video calls.

“Where it’s really helpful is when someone is speaking in a second language,” she says.

“It makes it easier to understand the spoken word. You can see their body language and facial expressions as well.”

Reprinted from Virginia Business, April 2013

Hardwick wants to continue increasing the company’s international presence. “It’s a great way to grow the company without having to grow my own staff,” she says.

VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP • INTERNATIONAL TRADE 03

BAY BEYOND INC.

VIRGINIA ENTREPRENEUR IS EXPANDING INTO CHINA BY WAY OF NEW ZEALAND Global opportunities are emerging for Eastern Shore delicacies.

It was Pamela Barefoot’s love of clamming and crabbing that inspired a move from Richmond to Virginia’s Eastern Shore in 1984. A year later, she and her husband, Jim Green, started Bay Beyond Inc., a company that celebrates the essence of the Eastern Shore. Under its Blue Crab Bay Co. brand, the company sells everything from coastal-themed snacks to clam juice and seaweed soap.

BAY BEYOND HAS BEEN EXPORTING FOR 20+ YEARS AND IS CURRENTLY NEGOTIATING TO EXPAND INTO CHINA.

Shortly after opening its doors, Barefoot began mailing out brochures for gift baskets that included the company’s clam and crab dip blends. “Within a few months, I got inquiries from a couple of Virginia-made product stores such as Taste Unlimited in Norfolk that wanted to sell the dips,” Barefoot recalls. When she started the company, there weren’t many shipping options on the Eastern Shore. So Barefoot would hang a red flag outside her home whenever she had a shipment for UPS. “Shipping during our early years was difficult,” she explains. “I had to go across the Bay Bridge Tunnel because there were very few business resources here.”

Barefoot’s red flag is now a memory. “UPS comes here every day. We are the largest UPS shipper on Virginia’s Eastern Shore.”

The company shipped more than 12,000 boxes via UPS in 2009, amounting to nearly 368,000 pounds. Bay Beyond also shipped 645 pallets (more than 563,000 pounds) by truck. Bay Beyond hit the $1 million sales mark in 1996. Today, it racks up $3 million in annual sales. The first thing that popped into Pamela Barefoot’s mind in 2007 when a state export program asked her to target a new area was the cruise vacation she had just booked to Australia and New

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Zealand. “I immediately started researching distributors and found a company in Auckland called Interlink Foods,” she says. Turns out Interlink was a natural distributor for a variety of products from Barefoot’s Bay Beyond company located near Melfa on the Eastern Shore.

Bay Beyond started exporting mixers, peanut products, seasonings and soups in the early 1990s to Great Britain, Hong Kong and Canada. In 2007, the company received a $5,000 grant from the Virginia Economic Development Partnership to expand exports. That’s when Barefoot began working with AIM (Accessing International Markets), a state program that helped companies expand their business abroad.

Currently, Barefoot is negotiating with China on a deal involving peanut products.

Twenty-five years after opening for business, international sales now account for 5 percent of Bay Beyond’s annual sales of $3 million. Just recently, the company added a new international client, a deli in the Cayman Islands. “They are excited about having a large display of our items,” Barefoot says. “They have ordered a little bit of everything we sell.”

Reprinted from Virginia Business, May 2010

CERAMIC TECHNOLOGY

THE LAND DOWN UNDER Ceramic Technology tries to grow business in coal-rich Australia.

A self-proclaimed road warrior, Lee Osborne updates his GPS and sets up a short-term international contract with his cell phone carrier whenever he travels to Australia. “Being prepared is a plus,” says the owner of Tazewell-based Ceramic Technology. “Customers appreciate you operating in a manner that doesn’t cause a lot of distraction.”

The contract-manufacturing firm designs and fabricates custom steel equipment for the coal industry with a specialty in ceramic linings. In 2010, the company secured patents in the United States, Canada and Australia for its Sam-1 Static Prescreen technology, which helps lower operational costs for coal and mineral processing.

Osborne recognizes that business relationships take work and “establishing them around the world is tough. But you have to put the effort in,” he says.

He has participated in two trade missions to Australia with the Virginia Economic Development Partnership, hoping to build his business in that country. “I highly

that befit its station as a center of global business. When he visits Sydney, Osborne enjoys staying at the Shangri-La Hotel, which overlooks Sydney Harbour in the Rocks District. “The view of the harbor is breathtaking,” he says.

Reprinted from Virginia Business, November 2011

THIS YEAR, INTERNATIONAL SALES REPRESENT 20 PERCENT OF THE COMPANY’S TOTAL REVENUE. “THAT NUMBER IS GROWING,” OSBORNE SAYS.

Ceramic Technology began selling to Canada in 2008 because of the similarities between the U.S. and Canada’s coal industry. “The coal people there are very professional,” Osborne says. “They are very fair, production-driven people.” This year, international sales (mostly to Canada) represent 20 percent of the company’s total revenue. “That number is growing,” Osborne says.

recommend joining one of their scheduled trade missions,” he says. “They also contract with a consulting firm in Australia to support your efforts.” He describes Australian businesspeople as respectful, sincere and a shade more conservative than Americans. “What I see is a keen interest in what I have to say,” he says.

“They are very attentive.”

Osborne says Australia is a good fit for his company’s products. In 2009, Australia’s coal reserves represented 7 percent of global reserves, and iron ore represented 17 percent of global reserves. “Australia is one of the largest mineral countries in the world with a small population,” he says.

“You will see large mining operations near the city limits or in coastal areas. It’s strange to go to a coal mine and in 30 minutes be looking at the ocean.”

Australia’s largest city and the capital of the state of New South Wales, Sydney has a diverse economy with more than 600 international companies in the city.

Forty-eight percent of Australia’s top 500 companies are in Sydney. Companies headquartered in Sydney include Cochlear Limited, which manufactures and markets implantable hearing devices for adults and children. Sydney also has world-class accommodations for business travelers

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05

INNOVATIVE WIRELESS TECHNOLOGIES

TECHNOLOGY LEADER Innovative Wireless in Lynchburg is expanding its space and markets.

Sirius Satellite Radio listeners can thank a Lynchburg firm, Innovative Wireless Technologies, for helping define the architecture for the Sirius radios in their cars. “We designed a subcomponent used in all their designs to this day,” says company founder Eric Hansen.

INNOVATIVE WIRELESS EXPECTS ITS INTERNATIONAL SHARE OF BUSINESS TO INCREASE FIVEFOLD IN THE NEAR FUTURE.

Innovative Wireless produces products and services on the leading edge of technology, such as Sirius, Bluetooth and Wi-Fi. Hansen started the firm with a partner in 1997 (whom he bought out in 2004) after working for telecommunications company Ericsson.

The company made Inc. magazine’s annual list of fastest-growing private companies four out of the past five years. Its 2011 ranking at 3,327th was based on a threeyear 57 percent growth rate, from $6.5 million in 2007 to $10.2 million in 2010.

Since opening its doors, the firm has grown from two to 45 employees, most of whom are engineers and scientists. During the past six years, it has morphed into a balanced mix of products and services.

“Engineering services continue to be a strong component of our business model, even though we now have more revenue from products than services,” Hansen says.

The company sells wireless products for the mining and mineral industries, border security, military force protection and energy segments. The company also makes the Sentinel communications and tracking system, a wireless voice data and tracking solution for the mining and mineral industry. “In 2006, Congress passed a law that all underground mines had to upgrade their communication and tracking system,” Hansen says. “We’ve been selling the equipment to that market since 2008.”

This summer, the company will move from its 13,000-square-foot building into a new

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36,000-square-foot facility in Lynchburg, giving it more space for growth.

Hansen will participate in his first Virginia VALET trade mission to Europe this fall, visiting Finland, Poland and Esbjerg, Denmark. The VALET (Virginia Leaders in Export Trade) program helps Virginia companies expand their international business. “Denmark is a good fit for our defense and security products,” he says.

“There is a defense training facility in close proximity.”

International business currently accounts for less than 5 percent of the company’s business, but Hansen expects that number to increase. “We are budgeting a large international project for the U.S. government in the fourth quarter that would take international to 25 percent of our business,” he says.

Hansen already has learned lessons in selling to the European market. “There are spectrum [frequencies] and regulatory differences between the U.S. and Europe, as well as safety requirement differences,” he says. In addition, his company must get export licenses, often from the U.S. Department of State, for some of its products. “They don’t want defense-related technologies sold in non-friendly countries,” Hansen says. His strategy for international sales is to find international representatives and distributors “that have capabilities and competencies to sell our products.”

Reprinted from Virginia Business, July 2012

LIGHTHOUSE INSTRUMENTS

PLAIN SPEAKING IN AMSTERDAM International sales are a natural fit for a company that serves the pharmaceutical industry.

Derek Duncan of Lighthouse Instruments finds the Dutch business culture slightly different from other European countries.

“The Dutch appreciate plain speaking above all else,” he says. “They are very direct, unlike the British, for example.”

Duncan, general manager of the company’s European operations, began working for Lighthouse in 2003 after moving to Amsterdam. The Albemarle Countybased company manufactures test and measurement equipment for the pharmaceutical industry. It established Lighthouse BV (its European arm) in Amsterdam in 2010 and currently has three employees in Europe, two in Amsterdam and a salesman in London. When they first met, Duncan and Lighthouse founder Jim Veale were graduate students at the University of Virginia. Veale was looking at locations in Europe where he could open an office when Duncan moved to Amsterdam.

“It was a natural fit,” Veale says. “The office in Amsterdam gives us the flexibility to initiate contracts to our European customers. We can do everything in a country’s currency, which helps us manage the risk of fluctuations in exchange rates.”

Lighthouse Instruments began selling to Europe in 2004. In 2005, it expanded into Asia with an initial focus on Japan. Since then, international sales have doubled every three years. Today, 40 percent of the company’s sales are international. The

remaining 60 percent are domestic. “We have a lot of customers in Italy, Germany and France,” Veale says.

Veale’s decision to open the Amsterdam office was driven by the European pharmaceutical market. “We had been presenting papers at conferences attended by people in the European pharmaceutical community. The U.S. and the European and Japanese markets are the most advanced in the world,” he says. “It was a natural expansion.”

The same scenario led the company to Asia, where Lighthouse had received inquiries from distributors. The company recently started to sell to China and India. “We think [they] will be the biggest markets over the long term,” says Veale. That’s because both countries have less developed pharmaceutical markets and regulatory infrastructures. “They are now developing and exporting to Europe and the U.S., so it’s more of a market for us.”

Living in Amsterdam has been a plus for Duncan when it comes to learning about the business culture. It’s important to be seen as unpretentious, he says, in dealings with the people. “The Dutch are not hierarchical at all. The lowest guy on the totem pole gets to speak his views for input into a decision. This is unlike the Germans or French, where the boss is the boss.”

The Dutch also have a strong separation between work and their private lives.

“When they are at work, they work diligently,” Duncan says. “When they are off work, they are off.”

Veale enjoys visiting Amsterdam because of its “energy,” and its abundance of museums and good restaurants. “The Dutch are nice people,” he says. “I feel very comfortable there.”

Reprinted from Virginia Business, October 2011

INTERNATIONAL SALES HAVE DOUBLED AT LIGHTHOUSE INSTRUMENTS EVERY THREE YEARS.

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LINDSTRAND USA INC.

SOUTH BOSTON COMPANY MAKES INFLATABLE AIRCRAFT AND BUILDINGS FOR MANY NATIONS International sales represent 100 percent of Lindstrand’s commercial business.

When 7,000 athletes from more than 70 countries competed last year at the Commonwealth Games in New Delhi, India, they began and ended their experience in the shadow of a giant, illuminated aircraft made in South Boston.

The inflatable, stationary aircraft—known as an aerostat—was the largest of its kind in the world. It measured 260 feet long, 133 feet wide and 40 feet high.

Made especially for the opening and closing ceremonies at Jawaharlal Nehru Stadium, Lindstrand USA Inc.’s tethered aerostat served as the visual backdrop for a changing array of lasers and images. “It had 250 large mirrors hanging from it and also a 100-foot Buddha,” says Angela Lewis, Lindstrand’s general manager.

That growth helped the company snag major awards. Lindstrand was among five companies selected for Resilience Awards this year by the Tayloe Murphy Center at University of Virginia’s Darden School of Business. The awards recognize businesses that have persevered despite setbacks and depressed local economies. Plus, the company earned two top industry awards of excellence from the Industrial Fabrics Association International. “We competed against 130 countries [for the IFAI awards],” Lewis says.

Oil companies in Alaska and Canada as well as the Swedish Air Force and the U.S. military use Lindstrand’s inflatable buildings for purposes ranging from helicopter and airplane hangars to

LEWIS FREQUENTLY CONSULTS WITH THE VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP WHEN SHE IS DEALING WITH FOREIGN COUNTRIES. Besides aerostats, Lindstrand USA manufactures high-tech inflatable buildings, gas balloons and airships that are mostly sold to the U.S. military and large corporations. Swedish-born aeronautical engineer Per Lindstrand opened the business in South Boston in 2004. Since its opening eight years ago, sales have climbed at the South Boston operation. From 2005 to 2010, sales grew 450 percent, Lewis says, while declining to provide dollar figures.

hospitals. Large inflatable buildings also are used for command centers in countries such as Iraq and Afghanistan. “There is no metal, so they go up quickly and can be taken down quickly,” says Lewis.

Lindstrand’s gas balloons attract sponsors such as Nestlé and DHL, because they can be used as visual marketing tools.

International sales represent 100 percent of Lindstrand’s commercial business. “We deal

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with private companies outside the United States,” explains Lewis. “Also, we work with the U.S. military all over the world.”

Lewis frequently consults with the Virginia Economic Development Partnership when she is dealing with foreign countries.

“They have people all over the world who you can talk to or work with,” she says.

Lindstrand sent several employees to New Delhi for the five-week installation of its aerostat. Companies around the world saw Lindstrand’s handiwork during the games.

When Lewis attended an industry event recently, she had a “huge response from companies in India wanting high-flying aerostats for their amusement parks.”

She expects to see an increase in the company’s business dealings with India.

“They have the fastest-growing economy in a democratic country in the world,” she notes, adding that U.S. firms need to be careful about who they are dealing with there. “We went through a third party with all of our dealings. If you are going to deal with people in India, you need somebody from there who knows what they are doing and what they are representing on your behalf. It is very difficult to get in there without having a representative looking out for you.”

Reprinted from Virginia Business, January 2012

MCALLISTER MILLS

CRUISING FOR BUSINESS McAllister Mills manufactures fire protection system used by European cruise ships.

The small town of Independence in Southwest Virginia is known more for mountain music than for cruise ships.

Yet McAllister Mills, a company with 46 employees, manufactures a passive fire protection system here that’s used by cruise ships around the globe.

Princess Cruises has ordered the product, ALVEX-PF. In the event of a fire, it helps protect critical equipment, such as water mist pipes, and communication and electrical cables aboard passenger and military vessels. McAllister Mills began working on the system after the International Maritime Organization mandated in July 2011 that all crucial systems on a ship be fire protected for 60 minutes.

That mandate opened a door for new international business, particularly in Europe, where many cruise ships are built.

In fact, the order from Princess came after Alec McAllister, president of McAllister Mills, made five sales trips to Trieste, Italy, a small shipbuilding seaport. “Trieste is different than any other city in Italy because years ago it was part of Austria,” he notes.

McAllister decided to focus on Europe “because it is the biggest builder of cruise ships,” he notes. Most ships are built in Germany, Finland, France and Italy. The ALVEX-PF system uses high-temperature fibers—from 500 degrees to 2,500 degrees—that McAllister Mills develops and manufactures. “We have a very specialized high-heat application for the aerospace, automotive and pollutioncontrol industries,” McAllister explains.

When he started the company in 1980, McAllister Mills was producing hightemperature glass fabrics for the replacement of asbestos in a variety of industrial applications. Today, the company

works with a variety of industries through three divisions: high-temperature fabrics, high-temperature yarns and nonwoven products such as McAllister’s insulationblanket patented technology.

One of the company’s newest hightemperature products relates to diesel particulate filters used in the trucking industry. “There is a push in the trucking industry to have less pollution in the use of diesel trucks,” McAllister says. “We are developing new materials and products to insulate these systems for companies such as Caterpillar and Cummins.”

In the past 10 years, McAllister says the company has doubled its sales thanks to the development and distribution of new products in the U.S. market. “We are strategically located near industrial centers on the East Coast. A big swath of our customers is within a 500-mile radius of Independence. ” While most of its sales are domestic—only 10 percent are international—the company has a growing focus on international exports.

These days McAllister is focusing on New Zealand and Australia because of the concentration of heavy industry and mining in those areas.

In Trieste, the company works with Fincantieri, a Trieste-based shipbuilding company. While doing business in Italy, McAllister has faced challenges in understanding the Italian business culture and in getting products to market. He first networked through international marine trade shows. “I found out I should be selling through agents,” he says. “I researched and found the best agents, and within six months found the right people to sell to the shipyards.”

He also took advantage of the company’s advanced technology by having ALVEX-PF registered and certified with Lloyd’s Register for use on cruise ships. Communicating with the Italian business community is easy, he adds. “They speak English very well.”

In addition to a surprising ease of communication, McAllister has found that Italians are eager to develop a deeper relationship, and they like to be wined and dined. “Sometimes, when they are invited to dinner, they bring a group of 10 to 15 people,” he says. “Dinner can take three to four hours, so you get to know people more intimately, and it’s very important to do that in Italy. Lunch and dinner are not just about eating. They are about socializing, connecting and relaxing.”

Reprinted from Virginia Business, June 2012

WHILE MOST OF ITS SALES ARE DOMESTIC—ONLY 10 PERCENT ARE INTERNATIONAL—THE COMPANY HAS A GROWING FOCUS ON INTERNATIONAL EXPORTS.

VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP • INTERNATIONAL TRADE 09

MIKRO SYSTEMS INC.

BUSINESS IN BERLIN Mikro Systems looks to Germany for sales of medical equipment parts.

Mike Appleby never uses American cultural phrases such as “comparing apples and oranges” when he does business in Germany. “[The Germans] might not have a basis for what that means,” he says. “Things that are cultural in nature and don’t translate can add confusion to a discussion.”

Appleby travels to Berlin as part of his duties as president and CEO of Mikro Systems Inc., a company he cofounded in 2000 with Jim Atkinson. The Charlottesville-based manufacturing/ technology company has a patented manufacturing technology called TOMO. It applies the technology to two different

CURRENTLY, 20 PERCENT OF BUSINESS IS INTERNATIONAL, BUT “IN THE NEXT 12 MONTHS, IT WILL BE 50/50.”

markets: detector components for medical X-ray imaging and ceramic cores used to produce blades for turbine engines.

for companies that don’t want to invest money in real estate but would rather invest in technology.”

He finds a higher level of business transparency in dealing with German companies than with those in the U.S. “The relationships tend to be very trusting relationships in regard to how technology works,” he says. “In the U.S., [information] is more proprietary. It can be more difficult to get that level of transparency.”

Appleby says the company’s revenues have increased more than 50 percent annually for the past four years. “Last year, we were a significant amount over a 50 percent [increase] because of a commercial licensing deal with Siemens Energy,” he says.

Before starting Mikro Systems, Appleby worked in product development for a division of a Fortune 500 company. The business handled precision machinery and assembly for the aerospace and medical industries. Appleby and Atkinson wanted to apply technology they had used in previous jobs in high-volume manufacturing. “We focused on developing a manufacturing platform to make very complex, highengineered products,” Appleby says. The company’s customers include Global 1000 companies such as Siemens Energy as well as government agencies such as the Department of Energy, Department of Defense and NASA. The company has added 22 employees in the last 18 months, raising the total head count to 40. “We’ve gone through a big growth spurt,” Appleby says, noting that the firm moved from a 4,000-square-foot location to a 25,000-square-foot leased space in a technology park, Seminole Place.

“It’s a very convenient location. It’s perfect

He attributes the company’s growth to its three revenue streams: research and development funding; the manufacture of products used in medical imaging; and license agreements that allow companies to use Mikro Systems’ technology for manufacturing products.

Currently, 80 percent of the company’s business is domestic. The remaining 20 percent is international. “In the next 12 months, it will be 50/50,” Appleby says.

“We are negotiating with a manufacturing company to have parts for [medical equipment] shipped directly to Germany.

About half of our business will be shipping the parts to Germany.”

In the United Kingdom and Europe, the company is promoting the jet engine side of the business through assistance from the Virginia Leaders in Export Trade (VALET) program. “We have given presentations and a technology pitch to Rolls Royce UK,” Appleby says. “We started first discussions for technology trials with [them]. We are starting to attract international attention.”

Reprinted from Virginia Business, August 2012

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QMT ASSOCIATES INC.

BIRMINGHAM, ENGLAND, IS THE ‘WORKSHOP OF THE WORLD’ Wind chimes producer finds music and business in the breezes of Europe.

Jamie Baisden scans every porch for wind chimes whenever he’s out. His obsession may appear quirky until you realize Baisden is president of QMT Associates Inc., a major manufacturer of wind chimes. “I’m constantly looking for our products,” he says. “I can identify our wind chimes on sight.”

The Manassas Park-based company makes more than 600 products that include 10 different lines of wind chimes as well as birdhouses and bird feeders. Baisden bought the company in 2006 from Mike Throne, who founded QMT in 1980.

All of the company’s products are made in its 30,000-square-foot Manassas Park factory. Since 2006, QMT has experienced annual sales growth of 8 to 10 percent. The company has about 80 employees who work

at the company’s headquarters, factory or its 15,000-square-foot warehouse. All of QMT’s wind chimes are tuned to a specific note during production. “Each tube is struck and checked with a chords tuner,” Baisden says. “We make sure each is on key.

We use from four to eight aluminum tubes to create the scale we are looking for.” The chimes retail from $20 to $600 and can range in weight from under a pound to 45 pounds.

The company now sells to retailers throughout the U.S., and Baisden is working on expansion into the United Kingdom and the European market.

When he heads to England to market his wares to the world, Baisden’s destination isn’t London, but Birmingham, the country’s second-largest city.

He travels to Birmingham to attend the GLEE trade show in September—which caters to the garden, pet and leisure markets—and to the Spring Fair in February, a huge home and gift show. He started his international marketing efforts in the United Kingdom because he believes the “business environment is relatively similar to the United States.”

This February, Baisden landed several new customers on his second trip to Spring

Fair. “We have now worked with people in Ireland and England,” he says. “Some of our product is also in Germany.” Spring Fair and GLEE, in fact, draw buyers from all over Europe, one of Baisden’s target markets. “I want to not only expand our show schedule in the UK but also work shows in mainland Europe as well,” he says.

To help increase his export business, Baisden joined the Virginia Economic Development Partnership’s AIM (Accessing International Markets) program. “It’s nice to have a government program that is directly helping companies keep jobs and expand here,” he says.

Because he spends most of his hours at trade shows, Baisden has little time to explore Birmingham. When he does have that option, he likes to walk around the city. “It’s a good way to see what’s really there,” he says.

Two of Baisden’s favorite areas are New Street, a shopping district, and the Arcadian, an entertainment venue with bars, restaurants and a comedy club. “It’s nice to know that these areas don’t shut down at 5 p.m. because we’re usually working until 6 p.m.,” he says.

Reprinted from Virginia Business, July 2009

“IT’S NICE TO HAVE A GOVERNMENT PROGRAM THAT IS DIRECTLY HELPING COMPANIES KEEP JOBS AND EXPAND HERE.”

VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP • INTERNATIONAL TRADE 11

TSSI

A REGULAR CUSTOMER Canada and other NATO countries provide growth markets for TSSi. Don Wright never uses a deal-or-no-deal approach when doing business in Canada.

“If you get fixated on having to close the deal that day, you may be considered aggressive,” he says. “You have to take the time to make the deal and to develop relationships.”

As international sales manager for Harrisonburg-based TSSi, Wright educates himself on the customs and regulations of various countries around the world.

“We are actively selling to 40 countries,” he says. “Canada has been one of our best customers.”

TSSi sells tactical and specialized operational equipment to the U.S. Department of Defense, law enforcement and disaster recovery professionals. “We have good relations with a lot of government agencies through military and law enforcement,” Wright says. “The U.S. and Canada share a close alliance through military peacekeeping operations.

A lot of U.S. companies are doing business in Canada.”

The company got involved in the international market in 1994 when it worked with an exclusive group in the United Arab Emirates. “It was a learning curve,” says President and CEO Bill Strang.

“We got involved with the Virginia AIM [Accessing International Markets] export program and were able to land business in Poland and the Czech Republic. We set up distribution in Poland.”

France and Brazil are now growing markets for TSSi. “Brazil has agreed to invest in military upgrades and improvements to its infrastructure because of the World Cup in 2014 and the Summer Olympics in 2016,” Wright says. “The luxury we have is to tactically focus on countries with the best growth potential.”

Currently, international sales represent a low percentage of the company’s overall sales, but that area of the business is growing. “We often focus on countries in NATO and also recognize emerging markets such as India, which is a big market for us to break into,” Wright says, adding that export compliance regulations in foreign countries are a growing concern.

“American businesses are held to higher regulatory restraints than other countries around the world. It requires a much greater knowledge of export compliance regulations. Europe is a good market because it understands how we do business.”

TSSi has been selling products to the Canada Department of National Defense for about 15 years. In early 2010, the company landed a contract for about $1 million with the Canadian Department of Foreign Affairs and International Trade for a United Nations peacekeeping mission in Sudan.

Reprinted from Virginia Business, September 2011

12 VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP • INTERNATIONAL TRADE

“WE ARE ACTIVELY SELLING TO 40 COUNTRIES. CANADA HAS BEEN ONE OF OUR BEST CUSTOMERS.”

VAUGHAN FURNITURE

ASIAN CITY WITH WESTERN APPEAL Furniture maker finds familiar touches in Ho Chi Minh City.

Taylor Vaughan never gets behind the wheel of a car when he travels to Ho Chi Minh City (formerly Saigon) in Vietnam.

He chooses not to maneuver among the thousands of motor scooters that fill the crowded streets.

“Driving is something you don’t want to try to do,” says Vaughan, the president and CEO of Galax-based Vaughan Furniture.

“The traffic patterns are unlike anything in the United States. The hotels will help you hire someone who will get you around the city safely.”

Vaughan travels to Ho Chi Minh City frequently to visit Vaughan Furniture’s Asian operations office, headed by Michael Burcham, a Galax native.

Vaughan Furniture now contracts with overseas manufacturers for all of its products. The company began importing dining rooms from Taiwan in the 1980s.

“Taiwan is not as competitive now,” Vaughan says. “Most of our product comes from Vietnam. We also have manufacturing partners in Indonesia and Malaysia.” In addition, the company sources furniture from Brazil, Thailand and Chile.

But manufacturing is only the beginning when it comes to Vaughan’s increasingly global outlook. Vaughan also plans to

VAUGHAN FURNITURE SEES GROWING SALES AND POTENTIAL IN SAUDI ARABIA AS WELL AS OTHER INTERNATIONAL MARKETS. increase the company’s international sales in areas such as the Middle East through its participation in the Virginia Economic Development Partnership VALET program.

Vaughan Furniture currently sells to Canada and Puerto Rico. “We have done some business in Saudi Arabia,” Vaughan says. “We think there is potential for growth there.” He recently took part in the Malaysian International Furniture Fair. “We had visitors from Egypt, Spain, Malaysia, Canada and South Africa,” he says. “It was a who’s who of international countries.”

Ho Chi Minh City’s myriad charms and welcoming international flavor have inspired many international firms to set up satellite operations there, including PepsiCo, the worldwide convenient food and beverage company, and Luxoft, an IT provider based in Moscow.

Reprinted from Virginia Business, May 2009

When it comes to foreign locales, Vaughan enjoys traveling to Ho Chi Minh City because of its appeal to Western visitors.

Located on the Saigon River, the city has a tropical climate and a population that represents many cultures. Its expansive boulevards feature buildings that reflect French colonial designs. Some international visitors may be unsure about accommodations, but Vaughan has found that the Legend Hotel Saigon has all the amenities he looks for when traveling.

The upscale hotel, which caters to Western travelers, offers five restaurants, a gym and a business center. Other hotels that offer similar accommodations for international business clientele include The Sheraton Hotel Saigon & Towers and The Renaissance Riverside Hotel on the Saigon River.

VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP • INTERNATIONAL TRADE 13

WATERBORNE ENVIRONMENTAL INC.

MANNERS MATTER IN CHINA Leesburg company specializes in environmental consulting.

Mark Cheplick, principal engineer for Waterborne Environmental Inc., never realized how crucial a dinner could be until his company began doing business in Nanjing, China. “The dinners and meals are as important as the actual business meetings,” he says, when it comes to fostering a productive relationship.

“Meals are very formalized. When you walk into the room, you are placed in order of importance around the table.” And it’s not a place for a picky eater. Food can be out of the ordinary, notes Cheplick. “You have to be a pretty adventuresome eater.”

China is one of many countries that uses Waterborne’s consulting services. The Leesburg-based firm does risk assessments to understand the potential movement of chemicals in the environment, and provides services such as computer software development, field monitoring studies, simulation modeling and spatial data analysis.

Waterborne’s special expertise? Agriculture and pesticides. “We work mainly with agricultural chemical companies such as DuPont that need to perform scientific studies for pesticide registration and also want to promote good stewardship,” says company co-founder Marty Williams.

Williams and Patrick Holden co-founded the company in 1993. The two had worked together at the U.S. Environmental Protection Agency. The company’s Leesburg location was chosen partly for convenience. “It was halfway between our houses,” Williams says. “Also, we were close to the EPA and to [Washington] Dulles International Airport.”

Another plus was the area’s workforce.

“There are a lot of highly educated, high-tech people in the Leesburg area,” Williams says.

The bulk of Waterborne’s work relates to food and fiber production. The company studies new products on the market as well as established products. “Chemicals will come up for new registration or reregistration,” Williams says. “They have to be reviewed over again. Pesticides are some of the most heavily regulated chemicals because of their nature and intended effect to harm target organisms.” Since 1993, Waterborne has grown from six to 55 employees. During the past five years, Williams said the company has seen a 50 percent increase in total revenues.

Waterborne continues to grow its international business and to expand geographically. One of the drivers for that growth is participation in the Virginia Economic Development Partnership’s VALET program and the company’s past association with Virginia’s Accessing International Markets (AIM) program. “Those have helped us increase our international exposure and sales,” Williams says.

Many of Waterborne’s large international clients have offices in the U.S., Europe and elsewhere in the world. “The work that we do could be coordinated through the U.S. office or an international office,” Williams says. “We have some people working on-site at a couple of facilities.” The company’s first international clients were based in Germany and the United Kingdom, as Waterborne was instrumental in developing procedures and computer software for the European Union.

The company also works in Taiwan, Korea, Brazil, Colombia and Australia. In China, it provides educational and software development assistance to the Nanjing Institute of Environmental Sciences (NIES),

14 VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP • INTERNATIONAL TRADE

part of the Ministry of Environmental Protection. Waterborne began working with NIES in 2009, training Chinese scientists on U.S., Canadian and European regulations. Waterborne also helped develop the institute’s framework for pesticide risk assessment.

“VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP HELPED US INCREASE OUR INTERNATIONAL EXPOSURE AND SALES.” Cheplick finds the Chinese to be warm and friendly in business dealings. “It’s been a pleasure working with them,” he says. “They often like to set aside a social day. They like to show us around the country.”

Doing business in China, he adds, requires someone who understands the culture and can translate during meetings. “We have a guy who travels with us,” he says. “He explains a lot of the customs.”

Reprinted from Virginia Business, May 2012

HOW CAN THE VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP (VEDP) HELP ME? In the past three years, VEDP has helped pave the way for export deals for companies across Virginia.

MARKET RESEARCH

GLOBAL NETWORK CONSULTANTS

DEFENSE EXPORT RESOURCES

The VEDP completed more than 700 market research projects at the request of Virginia companies. These projects were delivered within an average time frame of three weeks.

The VEDP employs more than 45 incountry consultants across the world who serve as eyes and ears on the ground.

These consultants are available to take you by the hand and show you how to make connections in your target market.

In 2013, the VEDP will initiate a new program to identify international opportunities for defense-related businesses that have historically relied on government contracts.

FUNDING Identifying real opportunities and export buyers requires resources. The VEDP distributed more than $2 million in reimbursements to Virginia companies to offset expenses.

TO MAKE EXPORTING PART OF YOUR GROWTH STRATEGY, CONTACT A VEDP INTERNATIONAL TRADE MANAGER.

TRADE MISSIONS It’s hard to seal the deal without a face-toface meeting. The VEDP has preidentified buyers and distributors, and then taken more than 400 Virginia companies abroad to help them sign new business with visits to targeted markets.

NORTHERN

VALET PROGRAM

NORTHWEST

Each year, the award-winning VALET (Virginia Leaders in Export Trade) program helps Virginia exporters grow their international business with the assistance of VEDP and expert private-sector partners.

CENTRAL SOUTH CENTRAL EASTERN

SOUTHWEST

NORTHERN:

NORTHWEST:

CENTRAL:

Jenee Andreev JAndreev@yesvirginia.org 703.506.1031

Roger Porter RPorter@yesvirginia.org 540.213.0267

Monica Nichols MNichols@yesvirginia.org 804.545.5753

Michael Howley MHowley@yesvirginia.org 703.506.1030

SOUTH CENTRAL:

EASTERN:

Paul Ehrich PEhrich@yesvirginia.org 540.772.3905

Jordan Watkins JAWatkins@yesvirginia.org 757.314.2129

SOUTHWEST: Diane Thomas DThomas@yesvirginia.org 276.623.1536

VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP • INTERNATIONAL TRADE 15

V I R G I N I A E C O N O M I C D E V E L O P M E N T PA R T N E R S H I P

Virginia loves Exports

I N T E R N AT I O N A L T R A D E

www.exportvirginia.org