iq magazine - winter 2013

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Contents

FEATURESOver ThereCentral Minnesota’s Global Economy.

Five MarketsInfinite opportunities.

ExportrepreneursAt the vault of international trade, a clever few are picking the lock.

Technical Instruction Manual Investments, persistence (and some assembly) required.

44 RESOURCES—Get There from HereInternational aspirations? Here’s your little black book.

D EPARTMENTS

OUR MISSION:

Unlock the power of central Minnesota people to build and sustain thriving communities.

INITIATIVE FOUNDATION STRATEGIC PRIORITIES:

– Resilient Businesses– Thriving Communities– Effective Organizations– Local Philanthropy

ABOUT THE COVER:

OVER THERE: Central Minnesota’s Global Economy, cover design by Andrea Baumann.

IQ Magazine WINTER 2012

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26

34

40

Kathy’s Note4 Translations

IQ Points8 Your Two-Minute Digest

Tip Sheet 12 Welcome, Stranger

Whether you’re an overseas tourist or a corporate rainmaker, culture counts.

Sign of the Times14 The Foreign Exchange

International students guide firms to unfamiliar success.

On the Job48 How to Greet a King

Five things to know about life as anInternational Trade Representative.

Brainiac56 An IQ&A with Minnesota Trade Office

Exec Katie Clark

20 26

34 40


3WINTER 12


I’ll never forget the time when my husband and cousin-in-law set about the task ofimproving a youth camp septic system. Seriously. One of the tasks our ministry groupdrew was the enviable mission of redesigning the latrine, and the caretaker was doing hisbest to answer questions from Neal and Dave.

When you’re in Ochaby, Poland and the camp caretaker, Kazik, doesn’t speak aword of English, even ordinary interactions tend to be memorable.

Kazik helped matters by using plenty of body language. “Tak, tak (yes, yes),” hewould say, jumping, nodding, and waving his arms vigorously. Our guys responded usinga combination of charades, dirt drawings, grunts and contortions. (Most wives are usedto that.)

“No, no” (which sometimes means “yes” in Polish) affirmed that they were on theright track. In the end, motivated by a common need, they succeeded in understandingeach other and developing a plan for upgrading the system.

When we began traveling to Poland a decade ago, it was to “teach” at the languagecamps, but it didn’t take long to realize that we were the students. In spite of language andcultural barriers, we found that it is not only possible, but very rewarding, to discovermutual goals and work together to achieve them.

The same philosophy applies to central Minnesota’s economic opportunities. Dueto its manufacturing power in both urban and rural areas, our region is poised to achievesignificant economic development through international business expansion. Everysuccessful global partnership can bring new capital and jobs to both entities as well asthe communities around them.

This special issue of IQ illustrates the why, how and who’s who of internationalbusiness in central Minnesota. We showcase the entrepreneurs who have crossed overand the local resources to make it happen.

True, their professional trade secrets don’t include charades, dirt drawings, gruntsand contortions, but after ten years, I’m pleased to report that our adopted Polish youthcamp is renovated and fully operational, even its “criticalfacilities.”

Enjoy the magazine!

Kathy Gaalswyk, PresidentInitiative Foundation

Kathy’s Note

translations

Initiative Quarterly Magazine IQmag.org4

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Printed with Soy-Based Ink on Recycled Paperat Range, Inc.

Volume 10, Winter 2012

Initiative Quarterly Magazinewww.IQmag.org

INITIATIVE FOUNDATIONVice President for External Relations | Matt KilianGrants & Communications Specialist | Anita Hollenhorst

EDITORIALManaging Editor | Elizabeth Foy LarsenWriter | Sarah ColburnWriter | Martha CoventryWriter | Marni GintherWriter | John ReinanWriter | Lawrence Schumacher

IQ EDITORIAL BOARDInitiative Foundation | Kathy GaaslwykBrainerd Lakes Development Corporation | Sheila HaverkampMicrobiologics | Preeth JohnGranite Equity | Eric JungelsAnderson Trucking, Inc. | Karen KiefferSt. Cloud State University | Diana Lawson

ARTCreative Services Coordinator | Eric RittmannArt Director | Andrea BaumannProduction Manager | Bryan PetersenLead Photographer | John Linn

ADVERTISING / SUBSCRIPTIONSAdvertising Director | Brian LehmanAdvertising Manager | Lois HeadAdvertiser Services | Mary SavageSubscriber Services | Katie Riitters

405 First Street SE Little Falls, MN 56345320.632.9255 | www.ifound.org

Published in partnership with Range, IQ Magazine unlocks the power of central Minnesota leaders to understand and take action on regional issues.

6 Initiative Quarterly Magazine IQmag.org

rangeprinting.com

Donor-advised fundsCorporate giving fundsCommunity fundsAgency/association fundsScholarship fundsMemorial funds

Every donorhas a dream.

We have the privilege of bringing it to life. Your legacy begins here. Help people to help themselves through the Initiative Foundation endowment, or create a fund to nourishthe local causes that nourish you.

We make it easy. You make it possible.

877-632-9255 | www.ifound.org


Intelligence

ExcellenceIn ConstructionPyramid Award

The way a culture regards a busi-ness relationship is linked to itsperception of time. Westernersare task-oriented and prefertheir business deals andrelationships to stick totimetables. But others, includ-ing Middle Eastern cultures,often see time as a much largerand more flexible concept. Findout how cultural nuances impactinternational business on page 12.

Central Minnesota companieshelped boost the state’s exports toa record 5.3 billion in the secondquarter of 2011. That’s a 12percent increase over theprevious year. Minnesotacompanies of all sizes are export-ing anything from pacemakers tosoybeans to countries as nearby asCanada and as far-flung as Chinaand Saudi Arabia. Get the scoop onthe impact of central Minnesotaexporting on page 20.

The National Association ofManufacturers reports that every$1 in manufacturing productinfuses an additional $1.37 intoother sectors of the local econo-my, it ’s clear that exportingabroad supports people athome. Learn more about centralMinnesota businesses that areexporting success on page 35.

Manufactured goods makeup 50 to 60 percent ofMinnesota exports eachyear. In that category the topexports are machinery, medicalinstruments and devices, com-puter electronics and compo-nents, electrical machinery andvehicles—which includes snow-mobiles and ATVs. Meet KatieClark, this issue’s Brainiac intervie-wee and Minnesota Trade Officeexecutive director, on page 56.


Quotations“ ”“Our international students are highly motivated and talented. Theycan and do make a difference for central Minnesota businesses. Theirvalue to companies doing business overseas is strengthened by theirwork experience in the U.S. They return to their countries of originwith a unique set of skills that are of great value to U.S. companiesdoing business abroad.”

— Dr. Earl PotterPresident, St. Cloud State University & Initiative FoundationTrustee

"There is no doubt that international success requires a businessgoing 'all-in' and taking some calculated risks. But the good newsis that they don't have to do it alone. In Minnesota, we have awealth of resources and expertise to draw upon."

— Kathy GaalswykPresident, Initiative Foundation

“There’s no cookie cutter-cutter method for exporting. Don’t think thatbecause you’ve been successful in China, you can take that sameapproach to South America or Africa or Australia.”

— Richard HahnVice President, DeZURIK

— Margaret Anderson KelliherPresident, Minnesota High Tech Association

“If we can move the needleon Minnesota firms exporting and

get them all to enter one new market,we’d have a real potential for economic

growth for this state’s future.”

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— Jeffrey PhillipsInternational Trade Representative, Minnesota Trade Office


KEYMASTER ($25,000+)Anderson Brothers Construction

CompanyBenton CountyBlandin FoundationBremer BankBush FoundationCass CountyCenter for Rural Policy &

Development Gloria MacMillan CessnaCity of Little FallsCommunications Alternatives, Inc.Community Foundation of Greater

DubuqueConnexus EnergyCorporation for National and

Community ServiceCrow Wing CountyDepartment of Health & Human

ServicesEast Central EnergyEich Motor CompanyEmma B. Howe Memorial

FoundationIsanti CountyThe Jay & Rose Phillips FoundationArnold & JoAnn JohnsonLittle Falls Scholarship Fund Manufacturing Fund of Central

MinnesotaThe McKnight FoundationMedica FoundationThe Minneapolis Foundation Minnesota Community FoundationMinnesota PowerMinnesota Public Radio Morgan Family FoundationMorrison CountyOtto Bremer FoundationPine CountyJohn & Bonnie SchlagelSchlagel, Inc.Sherburne CountyState of Minnesota,

Department of Commerce Stearns CountyStearns Electric Association

Jack & Betty ThomasU.S. Bancorp Foundation USDA Rural DevelopmentU.S. Department of the TreasuryFran & Mil VoelkerWest Central Telephone AssociationWright CountyXcel Energy Foundation

PORTAL ($10,000 TO $24,999)AgStar Financial ServicesArvigBenton Telecommunications

FoundationBlue Cross Blue Shield of Minnesota

FoundationCity of MilacaCity of St. CloudCity of St. MichaelCity of SartellCity of Sauk RapidsCity of WadenaConsolidated Telecommunications

CompanyChisago CountyFirst National Bank of MilacaFunders’ Network for Smart Growth

and Livable CommunitiesKathy & Neal GaalswykGranite Equity PartnersKuepers, Inc. Architects & BuildersLoren & Kathryn MoreyThe Laura Jane Musser FundMidMinnesota Federal Credit UnionNorthwest Area FoundationRobins, Kaplan, Miller & Ciresi

Foundation SPEDCO Economic Development

Foundation Stearns-Benton Employment &

Training CouncilEugene & Bernadine Waldorf

GATEWAY ($5,000 TO $9,999)American Heritage National BankBank of the WestBlackRidgeBANK

Cambridge Medical Center CentraCare Health FoundationCentral MN Jobs & Training ServicesChuck & Barb ChristianCitizens State Bank of WaverlyCity of BaxterCity of Big LakeCity of CambridgeCity of LindstromCity of Long PrairieCity of MelroseCity of MoraCity of PierzCity of Pine CityCity of StaplesClow Stamping CompanyKanabec CountyMille Lacs CountyTodd CountyWadena CountyDonald & Deanna EngenEssentia Health –

St. Joseph’s Medical CenterGNP Company (Gold’n Plump)Gray Plant MootyLee & Jan HansonLakeland Mold Company, Inc.Larson Boats, LLCLarsonAllen, St. CloudLittle Falls Area Chamber

of CommerceLittle Falls MachineMarco, Inc.Mardag FoundationMinnesota National Bank & AgencyNOR-SON, Inc.Peoples Bank of CommercePequot Tool & Mfg, Inc.Pine Country BankSchlenner Wenner & Co.Stephen & Gwyn ShelleyEverett & Rita SobaniaSundance Pay It Forward

FoundationThe Sheltering Arms FoundationTodd-Wadena Electric CooperativeViking Label & Packaging, Inc.

Widseth Smith Nolting and Assoc., Inc.

Sharla & Warren WilliamsWoodland Bank

CORRIDOR ($3,000 to $4,999)City of AnnandaleCity of ClarissaCity of CokatoCity of CrosslakeCity of Lake ShoreCity of Maple LakeCity of MonticelloCity of NisswaCity of PaynesvilleCity of PrincetonCity of SandstoneCity of St. JosephDeZURIK, Inc.Donlar ConstructionCurt & Mary Beth HansonHBH ConsultantsDon Hickman & Sandra KaplanMatt & Jeanne KilianJo & Larry KorfLINDAR CorporationBill & Diane ScarinceShelley Funeral Chapels, Inc.Thelen Heating & Roofing, Inc.Venture Allies

PASSAGE ($1,000 to $2,999)Advance Design & SystemsAnakkala, Berns & CompanyDuane & Barb AndersonKeith H. AndersonAtomic Learning, Inc.Mayuli & James BalesBankVistaJoe & Mary BauerSteven & Ann BendaBrainerd Lakes Area Economic

Development Corporation Dan & Marie BullertBob & Marsha Bunger Lynn & Darren Bushinger

Central Minnesota Community Foundation

City of AlbanyCity of AlbertvilleCity of AvonCity of BackusCity of BeckerCity of BelgradeCity of BerthaCity of BrahamCity of BrainerdCity of Breezy PointCity of Cass LakeCity of Chickamaw BeachCity of Cold SpringCity of Eagle BendCity of East Gull LakeCity of Eden ValleyCity of EmilyCity of Fifty LakesCity of FoleyCity of GarrisonCity of HinckleyCity of HoldingfordCity of IsantiCity of IsleCity of MenahgaCity of MontroseCity of MotleyCity of OnamiaCity of Pequot LakesCity of RandallCity of RiceCity of Rock CreekCity of RockfordCity of RockvilleCity of RoyaltonCity of Rush CityCity of SebekaCity of SwanvilleCity of Taylors FallsCity of VerndaleCity of Waite ParkCity of WalkerCity of WaverlyCity of Wyoming

C F

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2011 was a special year for the Initiative Foundation, the confluence of its 25th Anniversary and the final year of a successful campaign that raised more than $13.8 million to build thriving communities and a strong economy in central Minnesota. To celebrate both milestones, we commissioned a Commemorative Wall that depicts a classic downtown and 25 symbols

of regional impact. A river of donor names unites the Foundation with the generosity of its donors.

With great appreciation, we recognize the following donors for their investments of $1,000 or more, between 2007 and 2011.


D

C

F

D

S

o

F

A

($3,000 to $4,999)

($1,000 to $2,999)

Christopher & Amber Close Family Fund

Close-Converse, Inc.Gloria L. Contreras-EdinCrow Wing PowerD.J.Bitzan JewelersDeGraaf Financial, Inc.Richard & Kerwin DonatLinda Eich DesJardins &

Joseph DesJardinsFarmers & Merchants State BankChris Fastner & Kathy

Hakes-FastnerFirst National Bank of WalkerBruce & Mary FogleDan & Annette FrankGlenn Metalcraft, Inc.Pat & Carmel Gorham

Grand View Lodge & Cote Family Companies

Great River EnergyDavid GruenesHappy Dancing TurtleCathy Hartle & Doug LarsenAnita & Brad HollenhorstLinda Holliday KaufmannTricia & John HoligHunt Utilities GroupIPEX, Inc.John KaliszewskiKennedy, Nervig, Carlson &

VanBruggenPaul & Shirley KleinwachterKristine & Kenneth KowalzekLakeland Incorporated

Lakes PrintingLarsonAllen, BrainerdLittle Falls MachineLittle Falls OrthopedicsLarry LundbladMahowald Insurance AgencyMcDowall CompanyMinnesota Business Finance

CorporationMINPACK, Inc.MN Elementary School Principals’

AssociationNorthern Technology InitiativeNorthway Group, Inc.Northwest Minnesota Foundation Robert & Marilyn ObermillerGlen Palm & Jane Ellison

Gladys & the late Leonard PaulsonPlaza Park BankEarl & Christine PotterDavid & Judie RoseRotochopper, Inc.Julie Schueller & Brian PedersonDorothy & Mike SimpsonState Bank of Cold SpringState Bank of KimballThe Moran Family Fund David ToebenSt. Gabriel’s HospitalSandy VoigtWadena State BankDr. George & Raquel WallinThe Whitney Foundation

2

See your name on the 25th Anniversary

Commemorative Wall

Visit us from 8 a.m. to 4:30 p.m Monday through Friday in Little Falls.

www.ifound.org

405 1st St. SE Little Falls, MN 56345877-632-9255



Welcome,Stranger

By Marni Ginther

Why could a Korean executive be offended if heisn’t seated properly in a meeting with aEuropean business? Why can Americans feel liketheir Japanese business partners can’t make a decision?

Why have workers in South America been uncomfortable receiving awardsfor good performance?

If your company is contemplating expanding into an internationalmarket, Mary Beth Lamb thinks you need to know the answers to thesequestions. An international “cultural competency” expert and the co-authorof Do’s and Taboos Around the World For Women in Business ( John Wiley &Sons), Lamb says companies can save themselves time and headaches byresearching the cultural differences that will affect their international rela-tionships.

Here are some of Lamb’s top tips for businesses that are consideringwork beyond their borders.

Embrace that every culture has its own ideas about time.

The way a culture regards a relationship—including a business relationship—is linked to its perception of time, according to Lamb. Northern Europeansand North Americans tend to be more task-oriented and typically prefer theirbusiness deals and relationships to stick to timetables. Cultures with this viewof time tend to form relationships quickly and efficiently when needed, andcan disband once the project is done. But others, including Middle Easterncultures, often see time as a much larger and more flexible concept.Relationships develop over days, months and years, and the connectionbetween people is often more important than any document or contract.

When an English colleague of Lamb’s went on a business trip to SaudiArabia to sign a contract he thought was nearly finished, he was aggravatedwhen the Saudi representative arrived a day late without any excuse. Theythen spent the next four days attending meetings and dinners and socializ-ing. The Saudi partner didn’t bring up the contract until he was about to geton his return flight. “Those four days were the most important part of thedeal,” said Lamb. “The contract was just a piece of paper—the relationshipis really where the value is for people with that understanding of time.”

Whether you’re an overseas tourist or a corporate rainmaker, culture counts.

Know (and accept) your place in the hierarchy.

Whether or not a culture embraces hierarchy can affect cross-cultural busi-ness operations. In some cultures, including the United States, an individ-ual’s place within a hierarchy isn’t strictly enforced: each person at the tablehas the right to be heard. But other cultures feel that clear hierarchies anddefined roles are essential to keeping a company organized and productive.

Japan and Korea are hierarchical cultures, according to Lamb. “Thathierarchy is evident even in seemingly small details, like who enters themeeting room first, or who sits where.” Koreans will seat the most power-ful person in the room at the spot facing the door. This custom dates backthousands of years, to a time when leaders needed to face the door in casean enemy attacked and the leader needed to command the situation.

Different views of hierarchy can cause miscommunication across cul-tures, according to Lamb. “Often, North Americans, and Scandinavian cul-tures in particular, get frustrated with hierarchical cultures when a personin a meeting continually has to seek approval from a higher up in order tomove forward.” It helps to set realistic expectations, and understand that itmay take longer to strike a deal with such a culture, because decisions haveto go up and down so many more layers of authority. Lamb also advises totry, tactfully, to find out who the real decision maker is, and do your best toconvey messages directly to him or her.

Recognize that you and your business partners might have different attitudes toward risk.

The way people deal with change and ambiguity can be very much a reflec-tion of the culture they come from, Lamb said. Some cultures, includingAmericans, view uncertainty as a good thing—risk-taking is an essentialpart of growth and progress. Others, such as French and Japanese cultures,see uncertainty as something to be avoided.

When Lamb consulted with a team of businesspeople from severaldifferent countries on a project, she noticed that the Irish representativeswere getting frustrated with the Germans for being too hesitant. The Irishmindset was: if we don’t act now, we’ll miss the window of opportunity. TheGermans, on the other hand, saw no room for mistakes. In their minds, it

Tip Sheet

Mary Beth Lamb


WINTER 12 13

was their job to make the right decision, so ifthat meant more time must be spent on thedecision, then so be it. “In some cultures, theconsequences for making mistakes are largerthan in others,” Lamb said. “And if that’s whatyou’ve experienced from a young age, you’re notgoing to be a risk-taker as an adult.”

Determine if your business partner’s culture values individualism or a collective mindset.

According to Lamb, studies repeatedly showthat North Americans view a larger group as acollection of loosely connected individuals, eachdeserving his or her own rights and recognition.But other cultures, including many in Asia andSouth America, tend to operate from a morecollective mindset, in which the community ismore important than the individual. Those cul-tures place more emphasis on consensus and aremore reluctant to express conflicting opinionsthan their American counterparts.

When an American company Lambworked with was doing business in Honduras,they gave out recognition awards to the highestperforming Honduran employees. When thosesame high performers quit their jobs at the high-est rates, it became clear that they were uncom-fortable being singled out.

Understand each other’s communication styles.

Communication style is heavily influenced byone’s culture. Western cultures in general aremore likely to think of good communication asdirect, objective and data-driven. They aremore likely to send an email, expect a responseand consider the conversation closed. ManyEastern cultures, however, view each individualconversation as a part of the larger relationshipbetween themselves and the person they’retalking to. They don’t necessarily view emotionas a bad thing in communication, and are morelikely to speak in implications and metaphors.They may feel that a quick email exchange isn’tsufficient to resolve an issue or come to a con-clusion. They may not reply to such an email atall, or even take offense at what they perceive asbrisk treatment. IQ

For more resources on cultural nuances visit:www.IQmag.org/pages/nuances

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The ForeignExchangeInternational students guide firms to unfamiliar success.

Signs of the Times

For Sartell-based W3i, what began as a search forqualified computing professionals turned into a les-son in the value that international students can bringto central Minnesota businesses. “We’re a company

that connects users and apps,” said Robert Weber, the senior vice pres-ident of the mobile and desktop application business. “And those peo-ple are all over the world, so it’s definitely an advantage to have employ-ees with a global perspective.”

W3i has gone from a small start-up to a global company with 100employees in just 10 years. To achieve that growth, W3i needed to hiremore and more employees with degrees and expertise in computer sci-ence. But according to Weber, there aren’t enough computing profes-sionals in central Minnesota to meet the demand for that skill set.“We’ve definitely employed many international students since ourinception in 2000, and they’ve been enormous contributors to ourextreme growth,” Weber said.

Local colleges and universities are welcoming international stu-dents who can not only help fill the tech gap, but also offer translatingskills and cultural insights to their employers. “Our international stu-dents are highly motivated and talented,” said St. Cloud StateUniversity (SCSU) President Earl Potter, also an Initiative Foundationtrustee. “They can and do make a difference for central Minnesota busi-nesses. Their value to companies doing business overseas is strength-ened by their work experience in the U.S. They return to their countriesof origin with a unique set of skills that are of great value to U.S. com-panies doing business abroad.”

At W3i, those students include Ting Huang (“Tim”), who came toW3i from China as a graduate assistant through SCSU’s computing pro-gram. “As a senior developer at W3i, Tim was instrumental in the launch-ing of our initial platform,” Weber said. He spent more than four years atW3i before moving on to work as a developer at Microsoft. AlekseyCherfas was another student the company hired from the University ofMinnesota, Duluth. Initially brought on as a software developer, his flu-ency in Russian proved valuable when the company needed help with

INTERNATIONAL INSIGHTS: W3i executive Robert Weber (right) saidthat international students, including Shivani Khanna (left) have been“enormous contributors to the company’s extreme growth.”

translation and strengthening relationships with customers in Russia.More recently, Shivani Khanna of India joined the team as an intern, andthen became a full-time employee after graduating from St. Cloud Statein 2007.

Diana Lawson, dean of the Herberger Business School at SCSU,is working to connect international students with Minnesota companieswho could benefit from their unique skill sets. “As interns and employ-ees, international students are definitely assets to companies who arethinking of, or recently have expanded operations abroad,” Lawson said.“In addition to having expertise in their field of study, they bring thelanguage and cultural skills that come from being a native of a differentcountry. Sometimes, the students themselves don’t realize what an assetthat can be.”

SCSU has about 1,100 international students from 80 to 90 coun-tries, Lawson said. They range across all areas of study, and while somespend only a semester at St. Cloud State, most stay to earn a full degree.

SCSU isn’t the only central Minnesota school with an active inter-national student program. Diane Hageman, media relations director atthe College of Saint Benedict, says there are currently 262 internationalstudents from 47 countries studying at both Saint Benedict and SaintJohn’s University combined, with pronounced growth in the number ofChinese and Vietnamese students in the past several years.

Of course, central Minnesota businesses aren’t the only ones reapingthe benefits of this exchange. “I feel I have become a lot more independ-ent and have a more realistic perspective on life because of these newexperiences,” Khanna said of her experience at W3i. “Back home, I led aprotected, comfortable, sheltered life. Coming to a new country, learningnew things, living away from family, adjusting to a new culture was chal-lenging a times. At W3i, I loved what I did and liked the people I workedwith so I’ve chosen to stay on. I have been given a lot of opportunity tolearn and grow.” IQ

By Marni Ginther


WINTER 12 15

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03_IQWinter12_20-25_Layout 1 3/6/12 12:16 PM Page 20

WINTER 12 21

AS THE 20TH CENTURY WOUND DOWN, SO DIDTHE GLOBAL MOMENTUM OF DeZURIK, INC.

The Sartell-based manufacturer of industrial valves had built an impressive inter-national footprint to serve its customers in mining, paper production, oil refining,chemical processing and water treatment. The DeZURIK flag flew over factoriesin the United Kingdom and Australia, as well as service centers in Singapore, Japanand Mexico.

But just as unprecedented opportunities were opening up in the global market-place, DeZURIK went into a defensive crouch.

An East Coast conglomerate took over the company in 1998 and began disman-tling its international infrastructure. Soon, lead times that had been measured inhours or days stretched to weeks, then to months. DeZURIK lost business to com-petitors that could provide faster, better service in international markets.

After decades of preparing itself for global opportunities, DeZURIK left thedock just as its ship was coming in. It’s a cautionary tale for other Minnesota compa-nies competing in an economy that now crosses international borders. “For U.S. com-panies, or central Minnesota companies, to stay local without looking international-ly puts them at a competitive disadvantage,” said Diana Lawson, dean of theHerberger Business School at St. Cloud State University. “Instead of competing withthe people next door, we have to compete with the people 6,000 miles away.”

Fortunately, DeZURIK had a chance to write another chapter to its story. AMinnesota-based investment firm, Granite Equity Partners, bought DeZURIK in2009 and immediately set out to rebuild its international presence. A 2011 loan fromthe Initiative Foundation gave them an additional boost, providing the necessaryworking capital to expand.

The company has established an international network of manufacturers’ reps,but hopes to have its own employees on the ground in key markets within the nextthree years. The re-establishment of company-owned service or manufacturing facil-ities is also under discussion, said Richard Hahn, DeZURIK’s vice president of inter-national business development.

Privately owned DeZURIK doesn’t reveal its annual sales, but internationalgrowth has been tremendous, Hahn said. At a time when many Minnesota compa-nies were still struggling to overcome the impact of the recession, international saleswere up 48 percent in 2010 and another 24 percent in 2011; they now account forabout 22 percent of DeZurik’s revenue, and are projected to hit 35 percent withinthree to four years. “We have enjoyed good success to date,” said Hahn, who’s enter-ing his 45th year with the company. “It's very exciting to be a part of this.”

Minnesota companies like DeZURIK helped boost the state’s exports to arecord $5.3 billion in the second quarter of 2011, the most recent period for whichdata are available. That’s a 12 percent increase over the previous year. Today, 209Minnesota companies of all sizes are exporting anything from pacemakers to soy-beans and baby products to countries as nearby as Canada and as far-flung as Chinaand Saudi Arabia. But while some of their customers may live at the far reaches ofthe globe, the economic impact of these companies’ success is felt right here at home. CONTINUED ON PAGE 24

IN 2011, A REINVENTED AND RE-ENERGIZED DEZURIK HELPED TOBOOST MINNESOTA EXPORTS TO A 12% INCREASE OVER THE PREVIOUS YEAR.



A peak at the stats, trends, and facts give a glimpse of things to come.

Top 5 Export Destinations forMinnesotan Products & Services (2010)

MN Percent U.S. PercentExports Change Change

Country (millions) 2009-2010 2009-2010

Canada $ 4,641 21% 21%China $ 1,826 45% 29%Japan $ 930 26% 18%Mexico $ 836 26% 26%Germany $ 727 12% 9%

THE MAINSTAYS


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The Minnesota Trade Office and the Minnesota Department of Agriculturewill lead delegations on the following trade missions in early-mid 2012:

WHEN WHERE WHAT

March 2012 India Medical Devices

Early Summer 2012 China General Trade (led by Gov. Dayton)

June 2012 Germany Solar Industry

July 2012 India Food Ingredients

September 2012 Russia Multi-Sector

September 2012 Canada Smart Grid Industry

Sources: Minnesota Department of Employment and Economic Development

THE TRADE



A WORLD OF OPPORTUNITIESCentral Minnesota’s vibrant manufacturing sector could set the stage fora global breakthrough, according to Kathy Gaalswyk, InitiativeFoundation president. “In order to grow our regional economy, we can’tjust pass dollars back and forth to each other,” she said. “Internationalexporting brings new revenue to the region, which creates quality jobsand builds thriving communities.”

Goods aren’t the only products crossing the international date line.Central Minnesota companies are exporting services, too. ATSInternational Services, Inc., a division of St. Cloud-based AndersonTrucking Service, Inc. has expanded into Europe and Asia over the lastthree years, opening facilities in Germany and Singapore.

Anderson specializes in what’s called “break bulk” cargo: large, manu-factured goods that are bigger than a standard container. The company hasbecome a leader in shipping blades, towers and other components for windenergy projects. The various components are manufactured in differentlocations throughout the world, primarily in Asia, South America, Europeand the United States.

Karen Kieffer, the North American Sales Manager, said the overseasexpansion was dictated by customer needs. As its customers increased theirinternational sales, Anderson had to keep up. “International is a growtharea for any company,” Kieffer said. “In the United States, all the big com-panies are focusing on international growth. And a lot of those overseasmarkets are less developed, leaving significant opportunities for growth formany companies.”

Likewise, DeZURIK has seen many of its North American customersin the pulp and paper industry expand their business in Indonesia and otheroffshore locations. DeZURIK needs a presence in those markets in orderto capture sales.

BRINGING IT HOMEBoth companies say that international sales have provided stability andhelped preserve jobs in Minnesota. “It keeps the overall flow going,”Hahn said. “When the domestic market drops, the interna-tional is strong. It helps to even things out.”

Business experts agree that exporting is vital to pre-serving jobs in Minnesota. “If your goal is to maintainemployment here in the United States, then you need tofigure out how to export,” Lawson said.

In fact, international growth is so important that itshould be a key component of a company’s business plan—not a backup tactic. “You need to start thinking of interna-tional markets as part of your strategy, rather than just aplace to use your excess capacity,” Lawson said. “It becomespart of your normal growth strategy, the same way youmight open another factory in the United States.”

But Lawson and others cautioned that operatingoverseas isn’t as easy as stateside expansion. Legal andcultural differences come heavily into play; even some-

thing seemingly as simple as the difference in time zones can causehuge headaches.

Both Anderson and DeZURIK have hired natives of the countrieswhere they’re doing business to represent them in those markets. ForAnderson, that includes Germany, Singapore and Puerto Rico, withplans for China and India in 2012; for DeZURIK, it includes those andmany more markets, such as Chile, Thailand, Australia and SouthAfrica. “The way people think, the work ethic, the way they respond torecommendations or ideas is different overseas,” Kieffer said. “Havinglocal knowledge and partnering with the right people is critical.”

Hahn added that each international market requires a specially tai-lored approach. “There’s no cookie-cutter method,” he said. “Don’tthink that because you’ve been successful in China, you can take thatsame approach to South America or Africa or Australia.”

TRUST AND TIMEEnterprise Minnesota offers a program that helps businesses draw up aninternational plan. More than two dozen Minnesota companies havecompleted the Global Market Strategy program, an exhaustive 90-daycurriculum. “We consider exporting to be a very high priority for com-panies to grow their businesses,” said Bob Kill, president and CEO ofEnterprise Minnesota. “But it’s critical to have a plan.”

Part of that plan should involve actual travel abroad, severalexperts said. Although Americans are accustomed to handling busi-ness digitally, personal relationships are still highly valued in much ofthe world. “Building trust, buildings relationships is very important,”Lawson said. “And it takes time. But when you have so manyunknowns and uncertainties in an international transaction, the per-sonal relationship is very important.”

Attending trade shows is also a great way to begin making inter-national contacts. That’s how Alicia Overby started the process thatnow has her infant-care product, Baby Elephant Ears, in nine foreignmarkets. Baby Elephant Ears is a headrest/bolster that keeps infants’

“IN ORDER TO GROW OUR REGIONAL ECONOMY, WE CAN’T JUST PASS DOLLARS BACK ANDFORTH TO EACH OTHER. INTERNATIONAL EXPORTING BRINGS NEW REVENUE TO THE REGION,WHICH CREATES QUALITY JOBS AND BUILDS THRIVING COMMUNITIES.”Kathy Gaalswyk, Initiative Foundation President

Richard Hahn, DeZURIK’s Vice President of

International Business Development


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heads and necks supported and aligned when they’re in a stroller orcarseat. Based in Cambridge, Overby’s company will tally about $1.5million in sales in 2011, only two years after its launch. “I’m a TypeA personality—I go big or go home, always,” Overby said with alaugh. “So when I started this business, my goal was to get to themost widely known national trade show, the ABC Kids Expo in LasVegas. I prepared and attended. And we were overwhelmed with theamount of interest and excitement.”

But don’t feel that you have to have a booth or an exhibit at a tradeshow, experts say. In fact, the best approach may be to simply attend ashow—preferably abroad—where you can network aggressively and payattention to what other companies in your field are doing.

The state and federal governments have a wealth of programs tohelp businesses learn the ins and outs of operating abroad as well. Andlocal and regional resources, including the Initiative Foundation’sfinance and consulting services, are proving that you don’t have to payfor a passport and plane ticket right away. (For a full list of resourcesturn to pages 44-45).

Above all, develop a mindset that realizes you can’t be content forev-er in whatever niche you’ve carved out for yourself. And that goes forcommunities as well as businesses. “We in Minnesota tend to think of ourcommunities as competing with each other. But that’s a 1980s thought,”said John Kramer, CEO of the Greater St. Cloud Development Corp.“It’s now regions competing with other regions internationally.” IQ

HOUTSOURCING LABORHWhen production costs threatenthe stability of your company,exporting labor and production can protect your bottom line.

Imagine heading up Interstate 94 from the TwinCities to Alexandria—roughly a two-hour drive.Now imagine that, instead of farm fields and occa-sional towns, the highway was lined with factorieson both sides of the road, all producing at capacity.

That’s what Jeff Zernov sees every time he visitsSouth China. And he’s been visiting for about 15years now. Zernov, of Brainerd, designs sportinggoods products and manufactures them in Asia—often in China, but increasingly in South Korea andVietnam. Doing business under the corporatename Dragon Hunter, LLC, Zernov has sold asteady stream of his products to retailers likeGander Mountain and Mills Fleet Farm.

Zernov would rather be manufacturing in theUnited States, but said the economics leave him lit-tle choice. “When I can buy labor in China for $1 anhour or in Vietnam for 28 cents an hour, it’s hard tobuy labor here for $20 an hour,” he said. Zernovrecently priced tooling for a new line of ice fishingrods. In China, the quote was $7,500. In the UnitedStates, he got quotes of $38,000 and $42,000.

Zernov makes three to five Asia trips a year, spend-ing two to three weeks each time. Over the years,he’s built a network of trusted suppliers and distrib-utors. But his business also provides jobs here inMinnesota. He hires local graphic designers, CADartists, copywriters and printers.

The key to success, he said, is offering a value-added product. “The one thing you learn in Chinais, there’s no lowest cost,” Zernov said. “There’salways someone willing to go a dollar, a dime, ahalf-penny lower. Don’t get stuck into that lowest-cost corner. Design a new product. Come up withsomething value-added. Leverage your existingbase with a higher-margin product.”

HARD BARGAIN: Sporting goods designer Jeff Zernov says that economics leave him littlechoice but to buy labor overseas.

“INTERNATIONAL IS A GROWTH AREA FOR ANY COMPANY. A LOT OF THOSE OVERSEAS MARKETS ARE LESS DEVELOPED, LEAVINGSIGNIFICANT OPPORTUNITIES FOR GROWTH.”

Karen Kieffer, Head ofInternational Sales and Global BusinessDevelopment, AndersonTrucking Service, Inc.


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Five countries—Canada, China,Japan, Mexico and Germany—stand outas the top export partner destinations forMinnesota businesses, said MathewWoodlee, Senior International TradeSpecialist for the U.S. Commercial Servicein Minneapolis. But many other globalmarkets, notably Brazil, show a greatcapacity for growth in the coming decade.

Successful companies don’t try to usea one-size-fits-all approach to selling theirproducts and services overseas. “These are

very different countries with different cul-tures and different ways of doing busi-ness,” said Woodlee. “You really have tounderstand the markets if you want to getthe best results for your efforts.”

Fortunately, several organizations—the U.S. Commercial Service, theMinnesota Trade Office, the SmallBusiness Administration, to name a few—provide services and information that canhelp any business tailor its approach toeach market. The Commercial Service

offers free, detailed country guides thatprovide information about the laws, traderegulations and investment climate of keyforeign markets. (See full list of resourceson pages 44–45.)

The organizations can also provideassistance to businesses that have donetheir research and want to take their firststeps to connect with international mar-kets. Here’s a look at Minnesota’s top fiveforeign trading partners, plus one promis-ing up-and-comer.

From underwater fishing cameras to machines that make microwavepopcorn bags to laboratory-ready bacterial cultures, centralMinnesota companies are exporting more goods to more markets thanever before. 12 of the state’s 20 largest foreign markets showedgrowth rates of 20 percent or more between 2009 and 2010.

By Lawrence SchumacherPhotography by John Linn



The Basics: Canada is the largest global tradingpartner for both Minnesota and the United States.Minnesota exported $4.6 billion in goods and servicesto Canada in 2010, up 21 percent from 2009.

Top Exports:• Transportation equipment ($1.2 billion)• Machinery ($641 million)• Computers and electronics ($496 million)

:: OPPORTUNITIES ::Aerospace and transportation manufacturing and parts are topgrowth areas, as are energy and natural resource constructionand manufacturing. Canadian tourism is growing, due to a strongCanadian dollar, and the Canadian government is a strong busi-ness partner for the defense, security and IT industries.

:: CHALLENGES ::Doing business in Canada is similar to doing business in the U.S.However, customs documentation, bilingual labeling, packagingrequirements and Canadian federal and provincial sales taxaccounting are different from the U.S. and require specific atten-tion.

:: INSIDE SCOOP ::Canada is officially bilingual (English, French). The metric systemis used throughout the country, though understanding of imperi-al (pounds, miles) weights and measures remains high.Packaging, manuals and other documentation for goods export-ed to Canada must reflect these differences.

:: TRADE AGREEMENTS ::The North American Free Trade Agreement was implemented onJan. 1, 1994. Almost all tariffs between U.S. and Canada werephased out Jan. 1, 1998, allowing 99 percent of all goods andservices to cross the border without any restrictions.

EXPORTING IN ACTION: When Crosslake-based AquaVu fell victim to the recession and credit crunch of 2008–09, it hadalready been selling its underwater fishing cameras in Canada forseveral years, said Ben Gibbs, president of Outdoors Insight,which aquired Aqua Vu.

The company expanded its Canadian sales primarily by sell-ing to companies such as Cabella’s, which has a strong presencenorth of the border. Canadian sales now account for almost 25percent of the company’s overall sales, according to Gibbs.

Aqua Vu maintains a representative group in Canada to han-dle service and distribution issues. For many companies, Canadaprovides a comfortable way to get into foreign sales because ofthe proximity, common language and ease of trade.

Canada

CANADIAN COMMERCE: Outdoor Insights President Ben Gibbs with the Aqua Vu underwater fishing camera.


SOUTHERN SUCCESS: SarTec Sales Manager,Matt Wendorf: “Exporting to Mexico is not likeshipping across state lines.”

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The Basics: Mexico is Minnesota’s fourth-largest export market. Minnesota companies exported $836 million in goodsand services to Mexico in 2010, up 26 percent from 2009.

Top Exports:• Food ($214 million); • Computers and electronics ($104 million)• Machinery ($101 million)

:: OPPORTUNITIES :: Heavy industry, low-end manufacturing and food-related products andservices are expected to continue to show strong growth. Other growthareas include: agribusiness and agriculture; auto parts and services;educational services; energy and environmental services; franchising;housing and construction; packaging equipment; plastics and resins;security and safety equipment and services; technology; transportation;travel and tourism.

:: CHALLENGES ::The size and geographic diversity of the country, combined with a relative-ly weak infrastructure, makes it difficult to find a single distributor to coverthe entire market. High interest rates in the Mexican financial system canmake it difficult for Mexican partners to acquire needed credit, leading topayment delays or cash-only partnerships.

:: INSIDE SCOOP ::Mexico has a Spanish-speaking population, though English is widely spo-ken among the business crowd. The Mexican legal system is distinctly dif-

ferent from U.S. Customs standards, and product regulations and laborlaws are also different. Violence related to organized crime has createdinsecurity, particularly in some border regions. Mexican business valuesdirect communication and personal relationships, with business often con-ducted in the homes of senior executives over an evening meal.Companies are extremely price-conscious.

:: TRADE AGREEMENTS ::Mexico is a North American Free Trade Agreement signatory. All industrialand most agricultural tariffs were eliminated as of 2003. Remaining agricul-tural tariffs were eliminated in 2008, allowing the free movement of 99 per-cent of goods and service across the border.

EXPORTING IN ACTION: Anoka-based SarTec Corporation hasbeen exporting SarTemp, an all-natural, yucca-based grain conditioner forbeef cattle since 2000. The company’s business in that sector has increasedat least ten percent every year.

Matt Wendorf, SarTec’s sales manager, suggests that prospectiveexporters to Mexico partner with somebody in each area your company istrying to enter. “Maybe it is a formal partnership or merely a friendship,” hesaid. “Their experience and networking can help eliminate roadblocks orexpedite solutions. Local friends can help keep you informed of dynamicslike who is expanding and who is having trouble paying their bills.”

Wendorf also recommends that prospective exporters not underesti-mate the complications of the import/export process, even though Mexico isa member of NAFTA. “The process is not like shipping across state lines,” hesaid. “New regulations and requirements are added and removed every yearand they vary from day to day and port to port.”

mexico



The Basics: Japan is the fourth largest American trading partner andthe third largest for Minnesota. Minnesota businesses exported $930million in goods and services to Japan in 2010, up 26 percent from 2009.

Top Exports:• Computers and electronics ($247 million) • Miscellaneous manufactured goods ($161 million) • Machinery ($121 million)

:: OPPORTUNITIES ::Cutting-edge manufacturing and production companies will continue to find a marketin this highly developed economy. Aerospace; biotechnology; computer software;healthcare IT; nanotechnology; renewable energy; pharmaceuticals; safety and securi-ty are all expected to remain strong.

:: CHALLENGES ::Japan’s large government debt and an aging population have led to a stagnant econ-omy for several years. It is still recovering from a severe 2011 tsunami/earthquake andresulting nuclear reactor damage and contamination.

:: INSIDE SCOOP ::Japan has strict service and quality expectations and culturally distinct business prac-tices, including significant deference to age and rank among a business group.Language barriers remain, though English is widely spoken among the businesscrowd. Consider hiring a reputable, well-connected agent or distributor.

:: TRADE AGREEMENTS ::Japan is a member of the World Trade Organization. It has among the lowest tariffrates in the world, but unique product standards and regulations on doing businesscan impede progress.

EXPORTING IN ACTION: Pine City-based MINPACK has been exportingmicrofilm cards to Japan since the early seventies, when the company was part of 3M.Originally used to record large-format engineering drawings, the cards have found asecond life as a way for manufacturers to archive plans and drawings for machinesshould the digital versions suddenly not be available. They are particularly popular inJapan because the film’s print quality clearly reproduces the fine lines of the Japanesekanji characters.

Today, exports to Japan make up approximately ten percent of MINPACK’s cardbusiness, which account for ten percent of MINPACK’s total revenues. But owner RobertThompson, who bought MINPACK from 3M in 2005, insists Japan is important to thecompany’s continued success. “I’m always pleased to see an order come in from Japan,”he said. “The margins on the cards sold in that part of the world are higher than themargins in the U.S. Also, the U.S. has always been a first adopter when it comes to tech-nology; when domestic companies started moving away from the microfilm card theywere years ahead of Europe and Japan. We’ve seen our volume for U.S. market shrinkdouble digits every year since the mid-1980s. Whereas in Europe and Japan, the markethas remained stronger. “

Japan

ASIAN AMBITION: MINPACK Owner, Robert Thompsonexpects that their microfilm cards will continue to succeedin Japan, where the film clearly reproduces the fine lines ofJapanese kanji characters.


WINTER 12 31

The Basics: After Canada, China is the second-largesttrading partner for both Minnesota and the United States.$1.8 billion in Minnesota goods and services were exported toChina in 2010, up 45 percent from 2009. It is one of the fastest-growing trade partners for Minnesota and the United States,both in percentage growth and total value growth.

Top Exports:• Machinery ($506 million) • Computers and electronics ($442 million) • Paper products ($162 million) • Miscellaneous manufacturing • Chemicals

:: OPPORTUNITIES ::High-tech and large-scale manufacturing machinery and equipment areneeded as China grows into a first-world economy. Energy, chemicals,transportation, medical equipment, construction, machinery, educationand tourism are all industries where China has a high demand.

:: CHALLENGES ::China is a developing country with divisions between rural and urbanmarkets and a huge geographic size that makes it hard to approach witha one-size-fits-all exporting plan. The business environment can beunpredictable—decisions made yesterday may not be valid tomorrow.China’s inconsistent and arbitrary legal and regulatory system does notalways protect the rights of foreign companies. The government engagesin severe protectionism of some domestic industries and firms.

:: INSIDE SCOOP ::China has a planned economy where production is still somewhat dictat-ed by political leaders and a lack of protection for intellectual property.Political connections sometimes trump commerce. Language barriers arealso a factor. Consider hiring a reputable, well-connected agent or distrib-utor to find customers in your target market.

:: TRADE AGREEMENTS ::China entered the World Trade Organization in 2001, revising its laws andregulations accordingly. Significant barriers and tariffs remain, makingimported goods more costly in the Chinese market than in other Asianmarkets.

EXPORTING IN ACTION: For the last five years, St. Cloud-based Microbiologics has been exporting its quality control microorgan-isms to multinational companies with manufacturing facilities in China,said Brad Goskowicz, the company’s CEO. The Asian economic giant’sgrowth has already made it the company’s third-largest Asian market.

Because of its huge geographic size and multiple population cen-ters, Goskowicz said his company has found it essential to engage sever-al distributors in order to penetrate the market. China is just beginning todevelop regulations and service levels that would open the door to morepartnerships; Goskowicz predicts significant future growth forMicrobiologics’ China market.

chin

a

PACIFIC PROMISE: Microbiologics CEO Brad Goskowitz predicts significant growthfor the company’s China market.



The Basics: Germany is Minnesota’s fifth-largest trading partner. Minnesota businesses exported $727 millionin goods and services to Germany in 2010, up 12 percentfrom 2009. It is the world’s fourth-largest economy and comprises one-fifth of the GDP of the European Union.

Top Exports:• Computers and electronics ($302 million)• Miscellaneous manufactured goods ($102 million)• Machinery ($101 million)

:: OPPORTUNITIES ::As a highly developed economy, German demand for American prod-ucts tends to come largely in high-tech and high-end goods, such ascomputer software and equipment; drugs and pharmaceuticals; med-ical equipment; industrial chemicals; automotive parts and services.

:: CHALLENGES ::Germany has a highly regulated labor market and high taxation,though reforms have been implemented to increase economic com-petitiveness. Germany is a diverse, decentralized market with manyregional differences.

:: INSIDE SCOOP ::Germany’s business culture values caution and direct, face-to-facemeetings. Business is conducted in a more formal setting than is nor-mal in America and deals often take longer to complete. Governmentregulations and bureaucratic restrictions can be complex.

:: TRADE AGREEMENTS ::Germany presents few formal barriers to trade, but membership in theEuropean Union presents unique requirements. The European Union’scommon agricultural policy places restrictions on biotech and someagricultural goods manufactured in America.

EXPORTING IN ACTION: Baxter-based Minnesota ThermalScience entered the German market about three years ago by sellingspecialized scientific thermal packaging used to transport biologics to aU.S. customer who set up operations in Europe. Soon after, the compa-ny found a local distributor for their products to navigate the culture andcurrency, according to Kevin Lawler, vice president of sales.

Today, international business now accounts for about 25 percentof Minnesota Thermal Science’s business, and the EuropeanCommunity represents the largest chunk of that. Lawler’s advice:“You’ve got to be there. I’ll be in Western Europe a couple of times in thecoming year to support our efforts.”

germany

A EUROPEAN UNION: Minnesota Thermal ScienceVice President of Sales Kevin Lawler says that exportsaccount for 25 percent of their business.


WINTER 12 33

The Basics: Brazil is Minnesota’s 18th-largest internationaltrade partner. Minnesota businesses exported $283 million ingoods and services to Brazil in 2010, up 21 percent from 2009.Brazil is the United States’ seventh-largest manufactured goodsmarket and the largest economy in South America.

Top Exports:• Computers and electronics ($76 million)• Machinery ($74 million)• Transportation equipment ($40 million)

:: OPPORTUNITIES ::As Brazil builds its infrastructure and economic capacity, industries such asaerospace, transportation, oil and gas, mining, building and construction,agribusiness, energy and telecommunications will continue to thrive.

:: CHALLENGES ::The Brazilian market consists of a large geographic area and limited infra-structure. The country has uneven income distribution and poor educationrates. It also has a significant informal economy or black market, whichencourages intellectual property theft. Brazil has high tariff barriers and aprotectionist government policy toward some industries, including agricul-ture and energy.

:: INSIDE SCOOP ::A deep understanding of local Brazilian culture and business climate isrequired, including the hidden costs of doing business and the impor-tance of personal relationships. These are typically established throughface-to-face meetings in both business and social settings. Hiring a rep-utable, well-connected agent or distributor is recommended to navigatethe Brazilian government bureaucracy and differences between differentregions of the country.

:: TRADE AGREEMENTS ::Brazil is a member of the Southern Common Market trade compact, whichlevies common tariffs against external countries (including the UnitedStates). Efforts to strike new American trade agreements with South Americaare proceeding, albeit at a slow pace.

EXPORTING IN ACTION: Villard-based Massman Automationexpanded into overseas markets in a big way two years ago with the acquisi-tion of a punch-packaging system for microwave popcorn, according to JeffBigger, the company’s president and owner.

The company is currently trying to enter the booming Brazilian market.Getting a foothold in Brazil has meant traveling down there to meet people, sixmonths of research into the market and attending an industry expositionfocused on Brazil. IQ

brazilBRAZILIAN BOOM: Massman Automation President Jeff Bigger says that the companydid six months of research and traveling in hopes of entering the promising LatinAmerican market.


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Great ships loaded with grain and iron ore leaving the Duluth harbor bound for ports around theworld. For generations of Minnesotans, that was the image of our state’s international trade.

Today, that romantic vision needs to make room for a broader view of Minnesota exporting.Businesses in towns across Minnesota led the state to a record-breaking $5.3 billion worth ofproducts sold internationally last year. When you consider that the National Association ofManufacturers reports that every $1 in manufacturing product infuses an additional $1.37 intoother sectors of a local economy, it’s clear that exporting abroad supports people at home.

“There is no doubt that international success requires a business going ‘all-in’ and takingsome calculated risks,” said Kathy Gaalswyk, Initiative Foundation president, “but the good newsis that they don’t have to do it alone. In Minnesota, we have a wealth of resources and expertiseto draw upon.”

Over 100 companies in central Minnesota are playing an increasing role in the state’s export-ing success. Some fought hard to keep their heads above water during the recent recession. Allsee international markets as the way to expand their business base and weather the storms ofeconomic uncertainty.

Even as they grow, these companies have stayed where they were founded, keeping themoney they earn in their communities, contributing taxes, paying utilities and raising theiremployees’ standard of living. And they have no intention of moving from the towns they callhome. Here are four central Minnesota businesses that are exporting success.

By Martha Coventry | Photography by John Linn



Schaefer Ventilation Equipment, Sauk Rapids

As Ed Schaefer repaired oil furnaces around Sauk Rapids in the 1940s,he began to accumulate old parts, including large motors. At the requestof a local dairy farmer needing to keep his cows cool, Schaefer put fanblades on one of those motors. With that move, he started what presi-dent and CEO Neil Crocker calls an “accidental” ventilation company,one that is now a very intentional enterprise, with sales of $15 millionand 40–50 employees.Schaefer Ventilation Equipment sells big air-moving systems and

radiant heat products that it makes in Sauk Rapids. These systemsheat, but mostly cool, animals, plants and people. Giant fans pushbreezes through movie sets and focused heaters warm chilly hotelentrances. Pilgrims entering Mecca, in Saudia Arabia, pass underSchaefer fans blowing a cooling mist. The company’s income grew by 50 percent in 2011, but sales were

shaky only a few years earlier when the recession hit manufacturershard. To stay profitable, Crocker kept the company focused on essen-tials, but he wisely continued to fund a series of growth initiatives. Onewas an exploration of international business opportunities. “Lots ofinternational companies come to the U.S. to attend annual trade

shows,” said Crocker. “We’ve always made connections and sales fromthese events.” The recession proved to Crocker that the company needed to

develop a more sustainable overseas market. By geographically diversi-fying sales, Schaefer’s products could become less season-dependentand the company could build a steadier demand. In 2010, Crocker and his team participated in a U.S. Commercial

Service/Minnesota Trade Office program called ExporTech designedto help companies become successful exporters. Schaefer also used theU.S. Commercial Service to find dealers and distributors and receivedcoaching on international marketing strategies from the MinnesotaDistrict Export Council.Aided by Schaefer’ s 60-year history and a stellar reputation for

quality, this tactical exporting effort is paying off. In 2011, SchaeferVentilation sold $1 million worth of products to Egypt, Pakistan,Mexico, United Arab Emirates, Russia and Venezuela, among othercountries. It is also putting significant effort into growing its MiddleEast business to include Saudi Arabia and Kuwait. Next year, Crockerhopes to increase its international sales to $2 million.

STEADIER DEMAND: The recession proved to SchaeferVentilation Equipment CEO Neil Crocker that the companyneeded to develop a more sustainable overseas market.


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Larson Boats, Little Falls

The United States has traditionally been the world’ s biggest motor-ized boat-buying country, accounting for 80–85 percent of global sales.But in 2007, U.S. sales peaked and then fell dramatically.

Larson Boats has ridden many financial waves since Paul Larsonbegan building cedar-plank watercraft in 1913. Buyouts and bankrupt-cies, depressions and recessions have buffeted the company over the years,but it has held on because of its near iconic status among boaters and animpeccable reputation for quality.

Even so, 2007 was a difficult year. Along with the downturn indomestic sales, international sales crashed in the global recession. It wasalso the year the company declared bankruptcy.

Despite the grim boat-buying picture, Larson had several strengthsin its favor—a solid history of excellence; highly skilled, loyal employees;in-house manufacturing that saves inventory and freight costs; andtremendous support from the Little Falls community. With financialsupport from the Initiative Foundation and other partners, the companyquickly began to build back its business, especially in the world market.

“To truly be able to grow a boat company, you have to have a visionfor international sales,” says Nino Dreger, head of international market-

ing. “If we establish the company well in every single market worldwide,we can take advantage of positive economic developments in one marketif another falters.”

CEO Al Kuebelbeck believes Larson’s advantage comes from thecompany’s 225 employees who build every inch of Larson’ s boats, exceptfor the instrumentation and windshields, in the Little Falls factory.“There isn’t a better workforce than we have here in central Minnesota,”he said. “The average length of service of the people here now is 18-plusyears. If you have that kind of dedication and pride in your work, you canwin.”

Today, Larson is actively selling boats in 23 countries, with Sweden,the Netherlands, Australia and Germany as the fastest-growing sectors.And it is turning its attention to China, a country Kuebelbeck calls “lit-erally untouched” when it comes to boat sales. The company is justbeginning to see the positive impact of international sales. Currently, theymake up 18 percent of the company’s revenues and Kuebelbeck’s goal isto double that number. The impact on the local economy grows with eachpercentage point, adding that much more to a vendor’s bottom line andincreasing the need to grow the Little Falls workforce.

EASTBOUND: Larson Boats CEO Al Kuebelbeck is turning theLittle Falls-based company’s attention to China.



Microbiologics, St. Cloud

Microbiologics began as a water-testing lab in 1971, but about five yearslater under the new owner, Bob Coborn, grandson of the grocery storechain founder, the company diversified its services. Coborn expandedthe testing business into additional markets and started manufacturingprepared culture media for microbiology.Over time Microbiologics developed a freeze-drying process and

began creating microorganism quality controls. Using innovative pack-aging and new formats, it specialized those controls to ensure quality andsafety in fields such as cosmetics, food, pharmaceuticals, and clinicaltesting. “If you’re a hospital, for example, testing for staph and yourresults keep coming back negative, how do you know your tests areworking properly?” said CEO Brad Goskowicz. “You need a control. Wehave specific strains of Staphylococcus that you can use to monitor yourtesting equipment to make sure it’s recognizing the bug when it sees it.”Today, Microbiologics is one of only three companies in the world

that makes these specific testing products. “We’ve found our niche,”Goskowicz said. “We are very, very good partners with the people we

serve and we make all our products here in St. Cloud.”The U.S. demand for Microbiologics’ products has always been

strong, but the company needed to look for revenue and growth possi-bilities in markets that were expanding faster than those in the UnitedStates. “We wanted to supplement our U.S. revenue and find ways toweather downturns and disruptions that might happen all around theworld,” said Goskowicz .With support from the Initiative Foundation, trade organizations,

and the Minnesota Department of Employment and EconomicDevelopment, Microbiologics began understanding export regulations,finding distributors, and moving into overseas markets. Now 40 per-cent of its $15–25 million revenue comes from outside the UnitedStates. The company sells its products in 128 countries, with those inAsia increasing revenues by a steady 60–70 percent each year and LatinAmerican countries showing a 30 percent growth rate. “As multina-tional food and cosmetic companies move into these markets, constantmonitoring of their products is critical,” said Goskowicz.

MADE IN ST. CLOUD: Microbiologics CEO Brad Goskowiczsays the company sells its products in 128 countries.


WINTER 12 39

Rotochopper, Inc., St. Martin

What was once thrown into landfills, is now an opportunity forRotochopper, Inc. The St. Martin-based company builds the only high-horsepower, horizontal grinding machines in the world where you canthrow pallets into one end and shredded wood comes out the other, col-ored to your specifications and ready to be bagged for landscape use.Rotochopper products can recycle asphalt shingles into a blacktop ingre-dient and transform wood waste into biomass fuel.

The employee-owned company was an inventive business from thestart. In 1990, Vince Hundt, who had been importing and selling forestryequipment from Finland, met Fred Peltz, a gifted machinery designer andowner of Peltz Manufacturing in St. Martin. With startup financing fromthe Initiative Foundation they built a prototype grinder, refined it and con-tinued to adapt it for multiple uses.

The company has been so successful in the United States that it didn’tinvest in the international market until a few years ago. “One key to beingsuccessful in the overseas market is to have a good international bank,” saidCEO John Babcock. “It ensures that the customer’s bank is stable, and thatthere are no U.S. sanctions in place against the country.”

Along with the difficult and costly practice of conforming to differing

international manufacturing standards, it ’s been a challenge forRotochopper to find quality local representatives in various countries. Butthe sales force in St. Martin has been doing a first-rate job, according toHundt, the vice president of market development and the architect of thecompany’s international expansion.

In 2009, Rotochopper sold $4 million worth of products internation-ally, about 20 percent of total sales. In 2010, international revenues hadclimbed to $6 million with sales in Canada, Norway, Sweden, Finland,England, Australia, New Zealand, Russia, Ukraine and Japan.

Many of Rotochopper’s product components are supplied by localbusinesses. Many services are performed locally, too—for example, a localvendor does the metal machining. In addition to these direct economicimpacts, customers come from all over the world to visit the factory. Theyuse taxis and rent cars, shop, stay at hotels, and eat at local restaurants.Babcock calls all of this activity “new” money because it is coming fromoutside the region and infusing local St. Cloud area businesses.

Most of the 50 people who work at Rotochopper come from 10–15miles away. “We’re committed to St. Martin,” said Babcock. “The peoplewho work here share in the success of the company. We’re here to stay.” IQ

GROUND LEVEL: Rotochopper CEO John Babcock said thatinternational revenues climbed to $6 million in 2010.


WINTER 12 41

For many Minnesota businesses looking for a way toboost sales and increase their financial stability andrevenue diversity, the question isn’t whether to growtheir overseas export markets. It’s how to do it.

Only one percent of Minnesota firms exporttheir goods and services outside the United States,and 58 percent of those only export to one foreignmarket, said Margaret Anderson Kelliher, former

speaker of the MinnesotaHouse of Representativesand current president ofthe Minnesota High TechAssociation.

Yet in the Twin Citiesalone, exports areresponsible for $19 billionin economic activity and180,000 jobs. “If we can

move the needle on Minnesota firms exporting andget them all to enter one new market, we’d havea real potential for economic growth for this state’sfuture,” said Kelliher.

In central Minnesota, many businesses would liketo find new markets for their products and services,but don’t have the time or knowledge to get started,said Diana Lawson, dean of the Herberger BusinessSchool at St. Cloud State University (SCSU). “When acompany wants to go into a foreign market, there’sa heck of a lot of learning that has to go into figur-ing those markets out,” she said. “Time is money forbusinesses, and they don’t have a lot to spare.”

Fortunately, there are many resources at the local,state and federal levels that can help businesses thatwant to make a commitment to exporting.

Here’s how to get started.

A couple years ago, Tom Grones startedthinking about expanding the market forGeoComm, his company’s geographicinformation services, which includesmapping, data collection and enhanced911. He decided that exporting was thebest path. But the president and CEO ofthe St. Cloud-based company didn’tknow where to begin.

The international market cameknocking at GeoComm’s door when aCalifornia-based partner started directinginquiries to them for their E-911 products.

“All of a sudden, we started havingpeople from foreign companies and gov-ernments reaching out to us,” Grones said.But before Grones decided which marketsto enter, he researched where his productmight find a market, trade barriers, dis-tribution chains and more.

The St. Cloud-based Anderson

Center and the Herberger BusinessSchool at SCSU proved to be invaluableresources. So did the Minnesota TradeOffice (MTO) and the U.S. CommercialService, both based in Minneapolis.

The MTO’s Trade Assistance Hotlinecan be a first stop for Minnesota business-es wanting to figure out how to get started,said Katie Clark, the office’s executivedirector. Experts in 15 different priorityexport markets can answer questions aboutthose markets, or staff can help businesseswith basic questions about putting togetheran exporting plan. The MTO also offerstraining programs for “new-to-export”companies at any stage of the process. “Wecan help people figure out what institutionsthere are to deal with, what to expect interms of the ease of doing business andwhat markets are best suited for differentproducts and services,” said Clark.

The U.S. Commercial Service, abranch of the U.S. Department ofCommerce, offers both detailed countryinformation guides for the prospectiveexporter and its Gold Key MatchingService, which helps companies connectwith potential agents, distributors, salesrepresentatives and business partners indifferent markets. “We can arrange face-to-face meetings or put you togetherwith people via videoconferencing,” saidMathew Woodlee, senior internationaltrade specialist at the Minneapolis office.

Closer to home, the HerbergerBusiness School, working with theAnderson Center and the SmallBusiness Development Center, offersconnections to specialists in St. Cloudthat understand both the centralMinnesota business landscape and over-seas markets.

By Lawrence Schumacher

STEP : THE RESEARCH1

WIQ2012-2

Margaret Anderson Kelliher, President of the Minnesota High Tech Association,and Former Minnesota House of Representatives Speaker.



An essential step for GeoComm includedbuilding an international strategic businessplan that defined where the company wants togo with its exporting and established a time-frame for that strategy.

Many small companies start exportingbecause of an individual inquiry and don’tdevelop an exporting plan, according to Clark.But one is highly recommended for companiesthat want to get serious about it. “Having astrategic plan in place and pursuing it can helpyou focus your efforts and it can also help youopen doors with overseas markets,” said Clark.

Grones worked with Lawson and theHerberger Business School in 2011 to helpdevelop that plan. In addition to facultyexpertise, the Herberger School also connectsbusinesses to students that can do research anddevelop plans for entering specific markets orevaluating a region. The Minnesota TradeOffice also provides assistance with buildingan exporting plan.

STEP : THE PLAN2

After extensive research, Grones identifiedCentral America and the Caribbean basin asthe best regional match for GeoComm’sexport efforts, and Belize as the best firstcountry to attempt to enter. The country hasa growing infrastructure to supportGeoComm’s product and a good relationshipwith the U.S. government, which offerssome aid to countries for establishing publicsafety services.

Next, Grones needed to make the con-nections that are essential to landing clientsin business, regardless of the market.

One option for companies that don’thave much foreign exposure is to go toindustry expos and trade shows that bringglobal buyers to them. “Nothing replaces aface-to-face connection,” said Clark.

“Going to trade shows is an easy way tointroduce yourself, though it requires a gooddeal of follow-up afterward to establish areal business connection.”

Another option is to take part in state-sponsored trade missions. The state receiveda $450,000 grant to fund five new trade mis-sions in 2012, including one to India inMarch of this year. Often, businesses over-seas feel more comfortable when a high-levelgovernment official is present or helpsarrange a meeting, and trade missionsarranged through the governor’s office canhelp open those doors, according to Kelliher.

For some businesses—includingGeoComm and Villard-based MassmanAutomation Designs, which produces linepackaging solutions—working with U.S.

companies that already have a presence inexport markets can help break the ice.Massman started working with U.S. compa-nies that did business in markets such asMexico and expanded its exporting fromthere, said Jeff Bigger, company presidentand owner.

Bigger said he relied on the U.S.Commercial Service’s Gold Key Service,which offers customized briefings on poten-tial markets, appointments with prospectivetrade partners, help with travel, interpretiveservice, clerical support and a post-visitdebriefing. “I learned that you really have tohave a local presence if you want to be com-petitive,” he said. “Personal relationships arevery important in markets like Brazil andMexico, and you have to know that.”

STEP : THE RELATIONSHIPS3

Time is money for businesses, and they don’thave a lot to spare.

Diana Lawson, DeanHerberger Business School, SCSU

WIQ2012-3

“

”

JOHN LINN


WINTER 12 43

Brad Goskowicz, Microbiologics CEO

The world’s economy changes every day, and busi-nesses need to keep up with it. “People a decadeago thought that globalization would just meantaking jobs here and moving them overseas,” saidGrones. “But today we see that the U.S. has animportant role to play in the global economy, andwe can take advantage of it, more than letting ittake advantage of us.”

To succeed in exporting globally, companiesneed to keep doing the research, update their plans,make new connections and re-establish their pres-ence in their target markets.

Companies that invest the time and effort willfind significant rewards that will benefit the wholestate. “To really have the growth most businessesdesire today, we have to look farther afield than justMinnesota, just the Upper Midwest, even than justnationwide,” said Kelliher. “More sales overseas aregood for business and good for Minnesota, and it’sone of the things that will drive our job creation inthis decade and those to come.” IQ

Grones found that when it comes to exportingto an overseas market, there is no substitute fortraveling to your overseas markets. “It’s exceed-ingly important to have a relationship withcompanies over there, and you can’t do that justthrough email and phone calls,” he said.

Trade missions can be a great way to getyour feet wet, but building and maintaining aclientele in foreign markets often requiresrepeated visits to get a better sense of howthings work in those markets, according toClark. For companies that don’t have experi-ence exporting outside the United States,Canada can be a great first market to enter.Cultural similarities, geographic proximityand the North American Free TradeAgreement make it a less-intimidating mar-ket for first-timers. “It’s easier to make andkeep business relationships in Canada thanjust about anywhere else,” said Clark.

STEP : THE PRESENCE4

STEP : THE CORRECTIONS5

It’s exceedingly importantto have a relationshipwith companies overthere, and you can’t dothat just through emailand phone calls.

Tom Grones,President and CEO, GeoComm

WIQ2012-4

“

”

American business plans often concentrate on goals and objec-tives for the next year, with a reward system focused on making thenext quarter’s projections. But to succeed in entering a foreign exportmarket, businesses must take a longer view and be patient when wait-ing to see the results of their efforts, advises Diana Lawson, dean of theHerberger Business School at St. Cloud State University.

“When you negotiate a deal with an American buyer, you’reboth working from a common set of assumptions about the way busi-ness is done,” she said. “It can take quite a while to understand thedifferent distribution chains, ways of doing contracts and assumptionsthat are part of the normal way of doing business in another country.”

Twenty years ago, it would have taken two years to negotiate acontract to export to even the most open Asian markets, Lawson said.Today, the timeline is shorter, but doing business still requires visitingcountries, making connections and doing research to understandhow they operate.

And while businesses can luck into orders to foreign marketsthrough the Internet, by attending expos and through referrals, anybusiness plan that incorporates exporting into the company’s overallgoals must reflect the long-term perspective that is required to suc-cessfully establish a presence overseas. “Exporting is not a short-termsolution for any business,” said Lawson. “It requires patience if youhope to succeed.”

Patience, patience, patienceTo succeed in foreign markets, businesses need to take the long view.

JOHN LINN


Chris M

cAllister


WINTER 12 45

R E S O U R C E S

GENERAL EXPORT ASSISTANCE

Anderson Center www.acmbd.org(320) 251-5420Email: [email protected]

Located in St. Cloud, the Anderson Center provides management and leadership develop-ment forums for executives across greaterMinnesota. The center’s three-day InternationalBusiness Forum introduces business leaders tothe challenges and opportunities of operating andcompeting internationally.

Center for International BusinessEducation and Research (CIBER)Carlson School of ManagementUniversity of Minnesotawww.csom.umn.edu/ciber/(612) 625-0027Email: [email protected]

Supports international business education experiences for students and provides informationrelated to international business for regional business leaders.

Enterprise Minnesotawww.enterpriseminnesota.org(612) 373-2900Email: [email protected]

A nonprofit business consulting organization that helps small and medium-sized Minnesotamanufacturing companies, education services and government entities. Offers global strategyand marketing seminars and programs across the state.

Export-Import Bank of the United StatesMidwest Regional Office www.exim.gov(312) 353-8081 Email: [email protected]

The official export credit agency of the UnitedStates. Helps finance exports of U.S. goods andservices primarily to emerging markets to helpcreate and sustain U.S. export-related jobs.

Herberger Business School, St. Cloud State University www.stcloudstate.edu/hbs/ (320) 308-3213Email: [email protected]

Offers several programs to prepare internationalbusiness executives for careers in global busi-ness. Consults with regional businesses to helpthem create business plans that include exporting.

Initiative Foundationwww.ifound.org(877) 632-9255Email: [email protected]

A regional foundation that promotes economicdevelopment through business financing, consulting and workforce development projects,especially to central Minnesota manufacturersseeking to expand into international markets. TheInitiative Foundation also provides grants to non-profits, community development resources, lead-ership training and donor services.

Midwest Global Trade Associationwww.mgta.org (651) 290-7482Email: [email protected]

An organization of international business professionals, which provides education, current information and support to enhance the international business opportunities of itsmembers and the community.

Minnesota International Centerwww.micglobe.org(612) 625-4421 Email: [email protected]

A nonprofit organization that promotes culturalunderstanding through educational events for students, citizens and businesses.

Minnesota Small Business Development Centerswww.mnsbdc.com(651) [email protected]

With offices located throughout the state, including five in central Minnesota, the SBDCs pro-vide a wide variety services to small businesses.Although they do not provide financing they helpbusinesses assess funding options and opportuni-ties, identify financing sources, evaluate eligibility,and prepare documentation that lenders require.

Minnesota Trade Office (MTO)www.positivelyminnesota.com(651) 259-7499(651) 259-7498 (Trade Assistance Helpline) Email: [email protected]

The international business unit of the Departmentof Employment and Economic Development, whichassists manufacturers and service providers toobtain the information, skills, resources and contacts they need to successfully export goodsand services worldwide. The MTO also hostsinternational trade missions. Their TradeAssistance Hotline helps companies with a widerange of exporting questions, from customs totrade regulations to etiquette.

U.S. Commercial Servicetrade.gov/cs/states/mn.asp(612) 348-1638Email: [email protected]

The trade promotion arm of the U.S. Department ofCommerce’s International Trade Administrationprovides assistance to Minnesota companies whoeither want to get started in exporting or increasetheir sales to new global markets.

U.S. Small Business Administration—Office of International Tradewww.sba.gov/about-offices-content/2/3122(612) 370-2324

The mission of SBA’s Office of International Tradeis to enhance the ability of small businesses tocompete in the global marketplace; facilitateaccess to capital to support international trade;ensure that the interests of small business areconsidered and reflected in trade negotiations;and support and contribute to the U.S.Government’s international agenda.

SPECIAL SECTOR SUPPORT

LifeScience Alleywww.lifesciencealley.org (952) 542-3077 Email: [email protected]

A Twin Cities-based nonprofit trade associationserving the life sciences in Minnesota and thesurrounding region. Hosts conferences and seminars on exporting.

Minnesota Department of Agriculture Marketing Services Divisionwww.mda.state.mn.us/food/business(651) 201-6000

The international trade staff provides assistanceto farmers and agribusiness in evaluating marketentry methods, understanding and obtaining regulatory requirements, finding partners, arranging shipping and financing.

Minnesota High Tech Associationwww.mhta.org/(952) 230-4555Email: [email protected]

Supports the growth, sustainability and globalcompetitiveness of Minnesota’s technology-basedeconomy through advocacy, education and collaboration.



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On the Job

Whether he’s helping Minnesota companiesmarket their goods in Moscow or briefing thegovernor about how to properly welcome aninternational dignitary, Jeffrey Phillips is at the

service of businesses and government officials alike. An internationaltrade representative in the Minnesota Trade Office, Phillips is the go-toguy for information and advice about European and Russian markets andbusiness customs. We asked him to tell us about his unique career.

You get dirty looks.Most of the people we deal with speak English. I speak a very little bitof Japanese, French and German. When I was working as a trade rep-resentative for the food industry, my first major presentation was to 400organic food buyers in Tokyo. I would throw in a little Japanese and theywould clap. Then I would say my part in English and the translatorswould do theirs. One translator gave me dirty looks because I changedmy presentation.

You check the bottom of phones.The big thing I cover for Europe is called CE Marking for products likemachinery, medical devices, even toys—if you look on the bottom ofyour phone or laptop, you’ll see a “C” and an “E.” That marking signi-fies companies have met health and safety requirements. It’s their pass-port into the European Union.

JEFFREY PHILLIPS: “Even though a lot of business can be done over the phone or the Internet, we encourage Minnesota companies to go overseas.”

You promote face time. Even though a lot of business can be done over the phone or theInternet, we encourage Minnesota companies to go overseas.Foreign companies want more personal interaction. The Germandelegation told me that if a Minnesota company had taken the timeto visit again, they would have done business with them. A sale cantake six months to a year.

You prevent faux pas. We have a lot of ambassadors come to town and we act as the proto-col office. We make sure the rules are being followed on everythingfrom how flags are placed to how you address a particular person. Wepay a lot of attention to how people are seated. There’s protocol thatneeds to be followed about who’s seated where, if their back is to thedoor, who’s on their right and left—all out of respect for a person’srank and professional position. Even how a person’s name is put on aplace card matters.

You roll with the flubs.When the king and queen of Norway attended a reception at the gov-ernor’s mansion, the king was supposed to get out of the car first. Butthe way they had the cars positioned, he had to walk all the way around.Everybody was so nervous and so aware of everything. But the king andqueen were very calm and good-natured. IQ

By Sarah Colburn | Photography by John Linn

How to Greet a KingFive things to know about life as an International Trade Representative.


WINTER 12 49



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IQ: I’m a business owner with a global dream. How can you help me?KC: The Minnesota Trade Office assists companies with obtaining theinformation, skills, resources and contacts they need to successfully exportmanufactured goods and services in the international marketplace.

Our office is staffed with international trade representatives, who havelived and worked overseas and bring expertise from different parts of theworld. When a company calls our hotline, our representatives know theirmarkets very well and can help companies be successful in those markets.

IQ: So, your staff must rack up the frequent flyer miles?KC: The MTO coordinates trade missions to targeted countries, includ-ing missions led by the Governor, to help companies establish trade con-

tacts and gain firsthand knowledge ofnew markets. We will lead five trademissions in 2012—Governor Dayton

will lead a trade mission to China in June.It’s fascinating to see the impact the Governor

has while leading trade missions overseas. As aGovernor, he has access to the highest levels of leadership in

business and government and can open doors for Minnesota companiesin hierarchical cultures. All Minnesotans are invited to join theGovernor’s trade missions and can apply on our website.

IQ: But aren’t trade missions mostly for the Cargills and 3Msof the world? KC: No—both small and large. We were also recently awarded a StateTrade and Export Promotion (STEP) grant. So, we now have $454,000available in subsidies for small businesses to participate in our 2012trade missions.

IQ: Is Minnesota on the international radar yet?KC:Minnesota has more Fortune 500 companies per capita than any otherstate and those companies are doing business around the world. When I’moverseas and mention I’m from Minnesota, they often don’t know where weare located. But if I say words like Medtronic, Mayo Clinic, 3M, andCargill, they realize they already know Minnesota.

IQ:What do we make that other countries want?KC:Manufactured goods and services make up 50 to 60 percent of exportseach year. In that category the top exports are machinery, medical instru-

IQ tours the opportunities with Minnesota Trade Office Exec Katie Clark

Katie Clark is the executive director of theMinnesota Trade Office (MTO), an office with-in the Department of Employment andEconomic Development that provides exportassistance to Minnesota’s manufacturers andservice providers.


ments and devices,computer electronicsand components, electricalmachinery and vehicles—which include snowmobilesand ATVs.

Agriculture exports are also a key market—15 percent of exportsannually; one in three soybeans in China is from Minnesota. The other 30percent of exports are service exports, such as education.

IQ: The Internet and exporting—how are they linked?KC: When we talk to companies around the state and ask if they areexporting, many of them will answer no. But when we dig deeper, we’ll findthey’re doing business with an international market as the result of a salethat came in through their website. Today, any company can do businessaround the world just by having a website, however, nothing replaces doingbusiness face to face.

IQ: Can central Minnesota companies get in on the action?KC: Yes, we have a partnership with St. Cloud State University and theSmall Business Development Center. We hold trainings on a range of top-ics, from how to understand cultural nuances to a full-day practicum onChina.

IQ: Final question, your bestadvice for business leaders . . .KC: Make exporting a part of yourstrategic business plan and proac-tively identify opportunities for yourproduct in foreign markets. If youdon’t already have these plans inplace, our office can help.

An IQ&A with Elizabeth Foy Larsen


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iq magazine - winter 2013

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