Smaller businesses see big export potential in Qatar and Chile

If your company is looking for hot new markets, then Chile may be a good place to start.

Want to see your business featured in Compass? Tell us about it.

Qatar sits at the tip of a peninsula that juts out into the Persian Gulf. It faces Iraq and Iran and shares a border with Saudi Arabia. It is about the size of Connecticut but controls some of the world's largest gas reserves, has oil to sell and an economy hungry for American goods. And at least one Florida company has taken notice.

Sand, stone, cement and expertise from SureCrete Design Products Inc. are helping to form decorative concrete pavement being placed around nearly 40,000 pools in a ritzy housing, hotel and entertainment development in Qatar that its proponents call "the Middle East's most glamorous address."

The Dade City, Fla., manufacturer sees huge promise in the emirate.

"For us it's like a gold rush because the U.S. economy has slowed," says Zeca Gama, SureCrete's international sales manager.

SureCrete is not the only U.S. manufacturer avoiding weakness in the domestic economy by selling overseas.

"Exports boost jobs, grow the economy and allow businesses to prosper," said U.S. Commerce Secretary Carlos M. Gutierrez in January when he announced the 116 top U.S. export origins. "Cities across the country are thriving in the global economy. This reinforces the positive role that trade and exports had in creating jobs and growing local economies."

The Tampa-St. Petersburg-Clearwater, Fla., metropolitan region was among those top origins. The area exported more than $4.7 billion worth of goods in 2006, according to the Commerce Department's latest figures.

A concrete opportunity
SureCrete is focused on the Middle East. "You've got a building boom that's a lot like what Walt Disney started in Orlando – buy land and turn it into a destination. Middle Eastern countries are cash-rich right now," Gama says. But some of them expect to run out of oil in 80 to 100 years, so they're building to diversify their economies, he explains.

Easing the way for small and midsize businesses interested in selling to new global markets are advances in telecommunications, air travel and supply chain management. Plus, for many U.S. companies, the sharp fall of the U.S. dollar makes their products cheaper than European and Japanese goods.

Canada, Mexico and China are the biggest buyers of American goods, but there are other, less-publicized emerging markets in which companies such as SureCrete are finding opportunity. These countries are building new airports, health care centers, educational systems and general infrastructure.

Small countries, huge potential
Qatar and Chile are two such countries. The U.S. Commercial Service calls the economic growth potential of Qatar "stunning." The emirate is pouring money into diversification of industries, including tourism, finance and education. Last year, its economy was projected to grow about 17 percent. And Qatar is buying American goods. In five years, U.S. exports to Qatar have increased more than 300 percent. Last year they were expected to exceed $2 billion.

Chile's hunger for American products is also powerful. U.S. exports to Chile were $6.7 billion in 2006, up 150 percent from 2003. Chile's economy grew 4.3 percent in 2006, and the Central Bank of Chile projected 2007 GDP growth of more than 5 percent for the country of 16.2 million people. The U.S. Commercial Service reports strong demand for food processing and packing machinery, computer hardware and software, and sophisticated construction and electrical power systems.

Falling barriers, rising markets

That demand helped push ESCO Corp. to take a greater financial stake in Chile last year. ESCO is a privately held Portland, Ore., manufacturer of machinery used in mining, construction and power generation. It's unusual among small and midsize U.S. businesses because it has operated globally for more than half its 95 years in business. It entered Chile almost 50 years ago when it set up a licensing agreement with Elecmetal SA in Santiago as a way to gain access to the market. "That was a fairly common way to expand then," explains Jon Owens, ESCO's general manager of North and South American sales. He says the financial risks were low: ESCO provided its expertise and brand name to a local manufacturer that, in turn, made and sold goods under the ESCO name.

ESCO's approach began to change as trade barriers started falling. Last year, a surging global mining industry prompted the company to establish a joint venture to build a foundry to make equipment for the mining and construction industries. Today about 30 percent of ESCO's sales are international. "Chile, Brazil, Argentina and Peru are all markets that we want to continue to develop," Owens says.

Missing the boat
Despite the attraction of lucrative exports, many small and midsize companies in the United States haven't explored international sales. Not only are they losing potential deals, but also they may be missing out on new trade practices and other innovations that come from global business.

A 2007 survey conducted for UPS revealed that 33 percent of responding small to midsize enterprises are engaging in cross-border trade. Of those, just 9 percent are exporting. "The survey shows that many American small to midsize enterprises haven't gone global yet," says David Abney, chief operating officer of UPS. "And if they don't take part, they stand to lose their competitive edge in a business environment that continues to transcend international borders."

Are you considering taking the plunge into the global marketplace, or are you eyeing a new market overseas? Let UPS help you with its new global trade website.