Traverse City Record-Eagle

February 10, 2013

Selling To The World

Northern Michigan companies get support to develop global trade

By Kathy Gibbons

TRAVERSE CITY — Tellurex in Traverse City developed a product its leaders believe has great potential to sell in developing nations.

Their TPOD1 provides thermal electric power on demand, basically relying on a tea candle.

With that in mind, the company took the TPOD1 to the Lighting Africa trade show in Dakar, Senegal, Africa, in November. And they did it with support from the Northern Michigan Global Trade Alliance.

The Alliance is a program of the Northwest Michigan Council of Governments and Michigan Economic Development Corporation and is a business resource center for international trade. Now in its second year, it's designed to be a one-stop resource for companies in 36 northern lower and upper peninsula counties that want to expand globally.

"(President Obama's) export initiative has a goal of doubling exports through 2014, and Gov. Snyder shares that goal," said NWMCOG Business Connections Manager Jaclyn Sanborn. "For last year, so far, the businesses we've assisted have reported $7.4 million in exporting sales "¦ and I imagine that is going to go up a lot (because all of the numbers aren't in yet)."

Grant assistance

Sanborn estimated 52 companies participated in Alliance programming so far.

"They either received some actual dollars to help offset (expenses), participated in educational programs, (or) we helped them build their export strategy," she said. "That also includes some 30 companies that actually received a grant incentive to help offset their export operation costs."

A U.S. Small Business Administration State Trade and Export grant program allows eligible companies to qualify for up to $12,000 in assistance to participate in trade missions and shows, make foreign sales trips, pay for translating services, search for agents, distributors and customers and conduct research on foreign markets.

Northern Michigan's Alliance had $230,000 to use for the grants last year, and received $300,000 this fiscal year.

"It pays for the costs associated with the matchmaking," Sanborn said. "It can pay for the actual travel and airline ticket, and hotel, but that's pretty much the limit of the travel costs.

"We can help support fees for setting up booths; there's a lot of expense in shipping. The other big areas are in translating materials, business cards, marketing materials and even some website translation. It's a 50-50 match and the company gets reimbursed."

A northern branch of the state's Procurement Technical Assistance Center can also provide local businesses with instruction on obtaining government contracts.

Targeting foreign markets

MEDC assigned International Trade Development Manager Chris Bosio to Traverse City and he spends about two weeks a month here. Bosio said foreign markets are ideal targets for Michigan businesses, especially during economically sluggish years here.

"Ten percent of the world's population lives in the U.S.," Bosio said. "Two-thirds of the purchasing power is outside of the United States.

"Many markets are still growing, and as our economy's kind of stagnated, it's a huge opportunity."

In the fall, officials from six Michigan businesses, including Baabaazuzu in Lake Leelanau, accompanied Michigan Gov. Rick Snyder on a trade mission to Canada, where the state just opened a new Michigan Trade Office in Toronto. Canada is the state's biggest trading partner, Bosio said.

"Prior to our trade mission to Canada, we'd been doing some good business in Canada, but accidentally, if you will," said Sue Burns, owner and president of Baabaazuzu, a company that uses reclaimed wool to create clothing and accessories.

The company also just launched a new spring women's line that reuses men's cotton dress shirts and vintage tablecloths.

"But we thought, if we made a concentrated effort, we could be doing a lot of business in Canada."

As a result of participating in the trade mission, Baabaazuzu now has representatives selling for them in Quebec and Ontario, regions where most of the Canadian population is concentrated. Meanwhile, they have accounts in Japan, Korea and Australia.

"We're looking to grow wherever we can," Burns said.

Trade missions

The Northern Michigan Alliance also plans a trade mission to Calgary, and targeted an oil and gas show in June. As one of four regional alliances across Michigan — the others are in Detroit, Lansing and Grand Rapids — it's responsible to plan a trade mission and recruit companies statewide to attend.

Bosio sees opportunity for northern Michigan companies to make connections in Calgary.

"We have a number of companies that supply bits and pieces of parts and services to the oil and gas industries," Bosio said.

Bosio said there's also great potential in other foreign markets.

"Right now China is the fastest-growing market," he said. "Oftentimes you hear about the BRIC: Brazil, Russia, India and China, and you add South Africa."

He said he's also a "great fan" of Central and South America because the time zones are similar and it's easier to find a person to translate Spanish in northern Michigan than, say, Mandarin.

As for Tellurex and its tea light-powered device, president and CEO Craig Tremp said they're focusing on North American and European markets first. The company also sells the TPOD1 retail online.

"We know we need to focus on developing the business here in developed countries — in the United States and Europe — and get the product established," Tremp said. "There will be a point in time down the road we could "¦ reduce the cost so it's viable to sell in developing countries."

In the meantime, Tellurex has been able to benefit from connections made through the Alliance.

"They've opened up and sent contacts to us to follow up on," Tremp said, "that have caused us to open these opportunities internationally."