‘A perfect fit’ for small businesses

Hannover Messe offers manufacturers an entry into global markets.

By Bob Vavra February 4, 2016

James Flaherty sees his company’s first trip to Hannover Messe in Germany as one giant step for his company, but also one major leap of faith for the benefits this show might bring.

Flaherty is president and CEO of Adsorptech, a small manufacturer and consulting company based in Middlesex, N.J. They make industrial-scale oxygen-production equipment and provide gas-separation consulting services, and until this year have never exhibited anywhere. Adsorptech’s first foray to Hannover Messe, the world’s largest industrial trade show, was facilitated by the U.S. Commercial Service, a part of the Department of Commerce and a partner in the company’s expansion into Europe.

"We look for distributors, and so here’s a show where 25 countries will attend, with a wide geographic spread," Flaherty said. "Industrial-scale oxygen is used in a multitude of industries—oil refineries, farms, and a lot of places in between. If we went to shows in each industry, we’d be doing nothing but trade shows."

Adsorptech’s relationship with the U.S. Commercial Service dates back 3 years to when the company first started to manufacture its products and was looking at how to get started in the export market. So when the Commercial Service suggested exhibiting at Hannover Messe as part of the United States’ Partner Country status in 2016, Flaherty was interested in hearing more.

"When we’ve worked with the U.S. Commercial Service, we had just decided to export, and they helped us with the learning curve. They were the ones who brought the show to our attention," said Flaherty. "It’s the first show I saw that covered a lot of manufacturing, environment, and energy markets. We can hit a group of our potential markets with one show. For a small business, that’s a perfect fit."

But with 6,000 exhibitors and more than 200,000 attendees at Hannover each year, a significant concern was getting lost in the crowd. "The Commercial Service has helped with that. We’re part of a bigger team, and that’s important," Flaherty said. "Their value is, first, their advice. Being a newbie, we have the greatest learning curve."

The company is working with the Commercial Service and the state of New Jersey, which has provided some of the funding for the trip, to help make connections to potential customers long before the show begins on April 23. "They’re trying to determine which attendees are our would-be customers, and are helping set up pre-show meetings. We’re not just hoping someone stops by."

Commercial Service and its role

The U.S. Commercial Service is a global marketing and consulting arm for small and mid-sized U.S. manufacturers looking to promote their products. There are more than 100 Commercial Service offices in the U.S. and a network of trade representatives worldwide.

"Some of the key services we provide for U.S. manufacturers and other exporters are our trade counseling services to help companies understand the opportunities and value in exporting their goods and services," said Daniel Gaines, senior international trade specialist for the U.S. Commercial Service. They also offer a program called Business Matchmaking Services, which identifies qualified overseas partners as well as an ongoing series of trade missions to markets around the world.

Hannover Messe is a regular event for the Commercial Service, but with the U.S. being Partner Country in 2016, it affords the Service a starring role in this year’s show. The U.S. Pavilion at Hannover will be an important hub for both U.S. states and manufacturers looking to expand exports and attract foreign direct investment—and a place for European and Asian businesses to learn more about U.S. opportunities. Gaines said the Commercial Service will offer U.S. exhibitors at Hannover Messe support in four areas:

  • Preshow educational webinars to help companies prepare for the event
  • Preshow company promotions to potential overseas partners, helping U.S. exhibitors get maximum exposure to the potential buyers, partners, and investors at the show
  • On-site executive marketing counseling with commercial experts from U.S. embassies from across the globe, helping U.S. exhibitors create custom strategies for approaching key global markets
  • Postshow follow-up support to make sure U.S. exhibitors know how to take the next step with the new connections they make at the show.

Making a splash

That support is a major reason why Kathy Wyrofsky, president of International Products Corp. in Burlington, N.J., will be attending her first Hannover Messe. The company has exports and sales offices in London for its line of specialty industrial cleaning products and specialty lubrication products.

"I walked the show about 15 years ago, but this is the first time we’ve been exhibiting," Wyrofsky said. The relationship we’ve had with the Department of Commerce and their help with networking has been wonderful, and they brought the show to our attention.

"It’s a really big opportunity to have meetings and network with potential partners, and that’s a big reason to go," she added. "One good prospect from a show pays for the show for us, and that happens often. I’ll be looking to take advantage of what the show is offering in terms of meetings. I see an opportunity to connect with new customers as well as existing customers."

Jim Higgins is president of Stay Online, a Creedmoor, N.C., manufacturer of power cords and plug adapters. Their products are manufactured to both North American and European standards, and the company recently opened its first sales office in Prague. Stay Online has exhibited at vertical-market shows in Berlin, Paris, and Amsterdam in the past, so this year’s foray to Hannover is hardly a first step into Europe.

But Higgins appreciates the difference between American and European trade events and business practices, which is why an appearance at Hannover is important. "In Europe, some relationships are predicated on meeting the person," Higgins said. "Over the course of a month, I’ve had two business meetings in airports. For some people, it’s about, ‘I’m not going to do business with you until I meet you.’

"They also respect a product that is well-made," Higgins added. "I love working with the Germans; with them, there’s no gray area. They will tell you, ‘Here’s what I need in order to do business with you.’"

U.S. manufacturing in expansion mode

While the global manufacturing sector has slowed after a 4-year advance, Commerce Department officials are bullish about the U.S. leadership role in global manufacturing. "U.S. manufacturing is adding jobs at its fastest rate in decades, with nearly 900,000 new manufacturing jobs created since February 2010; and manufacturing production is up by almost one-third since the recession. The number of factories across the United States is growing for the first time since the 1990s," said Deputy Assistant Secretary of Commerce Antwaun Griffin.

For small and mid-sized manufacturers, there are many resources offered through state and federal programs to encourage expansion of manufacturing exports and the opening of new markets. They include:

  • STEP Grants: The Small Business Administration (SBA) awards state governments with federal money known as STEP Grants, which act as a strategic investment to help small to medium-sized companies expand their international reach. These funds can be leveraged to help offset export-related costs, such as trade shows, travel on a trade mission, or using a U.S. Commercial Service fee-based service
  • Export Working Capital: SBA provides advances of up to $5 million to fund export transactions, from purchase order to collections. The working capital can support foreign accounts receivable during long payment cycles or can be used to finance suppliers, inventory, or production of export goods or services. This loan has a low guaranty fee and quick processing time.
  • Foreign Buyer Financing and Accounts Receivable Insurance: The Export-Import Bank (EXIM) offers a variety of financial tools that U.S. companies can leverage to support their export operations. One example is their foreign buyer credit service where EXIM will extend credit to a U.S. manufacturer’s overseas buyer, which can unlock financing otherwise unavailable to a foreign buyer seeking to purchase U.S. products. In addition, EXIM offers other insurance and financing options to help minimize the risk in doing business overseas.

"The first step that any manufacturer interested in growth should do is visit www.export.gov and contact their nearest U.S. Commercial Service office," Gaines said. "That office will be able to meet with the company and walk them through the resources across the U.S. government that will be of the most value to their specific company."

Managing expectations

For first-time attendees at Hannover Messe, the chance to be part of the U.S. delegation at the show, interact with global manufacturing partners, and expand their business all are compelling drivers.

"If we get one order, it’s worth it," said Flaherty. "Our products are high-capital expenditures products. One is not a very big number, but our expectation is that’s the lowest number we’ll have."

If that does happen, Flaherty said the Commercial Service’s efforts to point them to Hannover Messe would get a good part of the credit. "If I saw this online, I would not have recognized the value," Flaherty added. "They said we think this fits you, and here’s why."

"We feel really good about U.S. manufacturing," said Higgins. "If your product fills a niche and brings value, there’s a market out there. If you apply your imagination, there are opportunities."

Bob Vavra is content manager, Plant Engineering, CFE Media, bvavra@cfemedia.com.

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Author Bio: Bob is the Content Manager for Plant Engineering.