Export market grows:
Franklin County companies expand business overseas
March 11, 2008
By Janet Bond, Recorder Staff
the International Olympic Committee announced the 2008 Summer Games would be
held in Beijing, China, Bete Fog Nozzle
saw an opportunity. The
Greenfield company knew Chinese factories and coal-fired power plants could use
its nozzles as the country worked to clean up the air athletes would be
'Our export business has almost quadrupled in the last four years thanks in
large part to our business in China,' said Woodley Wardell, export sales manager
for Bete Fog Nozzle.
In a recently released report from the Census Bureau at the U.S. Department
of Commerce, export sales increased 13 percent, by $100 million, in the three
counties of the Pioneer Valley (Franklin, Hampshire and Hampden). The sales data
is from 2006, when export sales reached $873,046,821.
The top export destinations are Mexico and Canada, $351,602,974, countries in
the European Union, $251,493,507 and countries in Asia, $179,106,730.
The increase occurred well before the drop in the value of the dollar helped
make U.S. goods more desirable, because they cost less to companies around the
world. Among the factors fueling an increasing export market for at least the
last 10 years has been the overall growth in economies in countries like China.
'If you aren't exporting, you should be. This is the perfect time to export,'
said Ann Pieroway, program director
of the western Massachusetts office of the
Massachusetts Export Center.
The Massachusetts Export Center, part of the Massachusetts Small Business
Development Center Network, is in the business of helping small companies
develop and or expand their export business. Pieroway, who has worked for 13
years in the western Massachusetts office, located at Holyoke Community College,
has helped many Franklin County businesses expand their sales overseas. 'We're
kind of like the marketing research department of a small company,' she said.
At one time or another, her office has helped a variety of companies in
Franklin County, like Eddie's Wheels in Buckland. Eddie's
Wheels makes carts for dogs and cats that have trouble walking for a variety of
reasons. The business has grown from one employee, inventor Ed Grinnell, to 14
over the last 10 years.
Leslie Grinnell, Ed's wife and company president, said exporting makes up 20
percent of their business. They make about 400 carts a year for dogs in other
countries, particularly Japan.
'The Japanese have adopted the American dog culture, both good and bad,' said
Grinnell. The island country now has a problem with puppy mills, a proliferation
of puppy boutiques and animal rehabilitation and physical therapy for dogs, she
Grinnell said each Eddie's Wheels is custom made with tight control kept on
the designs of the variety of carts.
That is one reason she is wary of doing business in China, a concern for the
country's lack of respect for intellectual property.
'Intellectual property certainly is a concern. There is a company in China
that has copied us,' said Marcus Smith of Hardigg Industries in
Hardigg makes reusable containers of all sizes for carrying or shipping
anything from laptops to military equipment. The export demand has been largely
industrial and military, especially for carrying sensitive electronic or optical
equipment, according to Smith, director of international sales and marketing.
'Our non-U.S. business has grown by 30 percent in the last three years,' said
Smith, who offered three reasons for the increase in export business: 'growing
demand and growing recognition of our product overseas and the exchange rate of
the U.S. dollar has made our product seem cheaper.'
The expanding export market has led Hardigg to open offices in the United
Kingdom and France that employ about 40 people, he said.
Opening business subsidiaries in other countries is likely to be a continuing
trend at Hardigg, with an emphasis on Europe first and Asia second.
'We're thinking very seriously about growing our presence all over, including
the Asian market, he said.
The problem of respecting intellectual property in China is not one Smith
sees coming under control quickly. In part, it reflects the culture of a country
for which ideas and property were communally held.
'There is a perception in China that ideas are collective,' Smith said,
adding that 'it's very clear (that) is something that's going to have to be
unlearned.' Smith said the company was not going to let the problem deter them
from doing business in China.
'There is very much a reason to sell in China. We've witnessed demand for
products there and the quality (of Hardigg products) can't be knocked off. I've
seen the copy and it's not the quality of ours,' Smith said.
At Judd Wire in Turners Falls, Karl Sittard said they are
getting their foot in the door in China, but doing business there is not a big
emphasis of the company's export strategy.
'We've been doing limited business in China in the last three to five years.
It's growing, but its growing slow right now,' Sittard said.
The reason is the company's concentration on North American Free Trade Act
'We are so focused on our North American customers, Mexico with NAFTA,' he
Sittard said they supply the wire that is used to make wire harnesses in
Mexico, which are then shipped to Detroit, Mich., to make cars.
A wire harness, he explained, is a bundle of wires that are designed to
connect various components of a car and its controls.
'We take copper conductor and we insulate it and make bulk electronic wire.
Our products are typically used in demanding applications (such as) high
temperatures, like the auto engine area,' he said.
Sittard said the company is experiencing faster growth in Europe and Central
America combined than in China. It is also easier for Judd Wire to serve
customers in the countries where they have established relationships.
With the increase in business because of exports, Judd Wire has had to add
people and equipment to keep up with the growth. Sittard was unable to say how
much the company had grown as a result of exports.
At Bete Fog Nozzle, the company makes over 20,000 different types of nozzles,
so specific is the use and setting for the nozzles. In China, the Flue Gas
Desulfurization nozzle sprays a limestone slurry in the smokestacks that results
in a chemical reaction which removes sulfur dioxide from the factory or power
Wardell said the nozzles the company makes, even for similar scrubbing
procedures, often need to be customized to work in specific systems. That, he
said, makes it difficult for the ideas to be stolen.
The problems Bete has had in China, 'fall more into the category where you
have to protect against companies using images and trademarks. The Chinese are
very good at taking something, making a copy of it and trying to market it,'
Bete's best defense has been to do a good job protecting design technology,
Bete, like Hardigg, has opened offices in Europe. In Germany, the company has
a wholly owned affiliate office for sales and technological support. In England
it has a wholly owned subsidiary office for sales and technological support.
The company also increases sales of its nozzles by using distributors
throughout Europe, Asia and South America.