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      Why Minnesota Companies Participate in Trade Missions

      Posted on June 11, 2012 at 11:30 AM

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      International trade missions can conjure images of high-powered corporate executives jetting off to exotic cities to broker and ink big-buck deals in plush board rooms and lofty skyscrapers.

      Sounds cool. But it’s not an accurate picture.  

      The reasons Minnesota companies participate in state-sponsored trade missions like Governor Mark Dayton’s mission to China are as varied as the companies and industries themselves.

      Eventually, they all want to get to the point where they make a deal, but there’s a lot of ground to cover before that can happen (if it happens at all) and companies are often at different stages in the process. Here are a few of the most common goals companies have for trade missions.

      Understanding a Market


      Many companies participate in trade missions to learn from in-country experts about the opportunities to sell their products and services in a specific market. Among other things they may want to know:

      • Whether there’s enough demand for their product to justify entering the market
      • Whether the product needs to be modified to satisfy government regulations or consumer expectations
      • Who their prime competitors might be
      • What are the prime challenges or barriers to market entry

      In short, companies are gathering the information they need to decide whether or not to enter the market or expand their reach. 
      That’s the case with Dombrovski Meats of Foley, MN. The company joined the trade mission delegation to gather market intelligence.

      “We’re looking to expand the business so I want to see if there are opportunities,” says sales manager Adam Dombrovski
      Minnesota companies exported $2.3 billion worth of manufactured goods to China last year. Sales of processed foods, which include meat products like Dombrovski sells, were $202 million, accounting for 13 percent of Minnesota’s food exports to all countries. Meat exports rose 84 percent, in large part due to China's demand for fresh or frozen pork.

      Dombrovski has been working with market experts at the Minnesota Department of Agriculture to understand export and marketing requirements and to learn more about the palettes of Chinese consumers.

      “Different regions of China have different preferences for flavors and spice, noting that some regions like food more heavily spiced than others,” says Dombrovski. “We’re hoping to arrange a focus group of buyers as part of our research.”

      Ann and David Buck want to introduce Chinese consumers to the joys of Minnesota’s official state drink – and everything made from it.

      As representatives of the Minnesota Milk Producers Association, the Bucks will be promoting the state’s dairy industry.

      “China has one of the lowest levels of per capita milk consumption in the world,” says David Buck. “We see this trade mission as an opportunity to get as much information as possible about their dairy product industry, processing and distribution. We just want to take it all in and learn more about the taste buds of the Chinese.”
      Despite having a low level of dairy in their diet, China has recently experienced a surge in dairy consumption that’s tracking with the rise in household income and growth of a middle class. 

      Trade associations participate in trade missions are to assess market potential, learn more about the industry and network with industry and government officials. That’s exactly the case for the Minnesota Milk Producers Association, which has participated in prior governor’s trade missions to China.

      The Bucks hope the market intelligence and connections they make this time around will help association members to capitalize on China’s tremendous potential for growth. 

      Finding Distributors, Partners, Trade Leads and Buyers


      Finding the right distributors and partners can mean the difference between success and failure in a foreign market. 

      Companies use trade missions to take advantage of business matchmaking services designed to help them meet and screen qualified distributors and partners.

      Global Medical Instrumentation – GMI – has joined the governor’s delegation to find the right people to expand the company’s global reach.

      No newcomer to the international marketplace, GMI specializes in marketing new and remanufactured laboratory instrumentation to research universities, biotechnology and pharmaceutical companies, hospitals, clinics, laboratories and chemical analysis firms in more than 50 countries.

      And GMI has its eye on China.

      “China is experiencing a rapid, 30-percent rate of growth in the life-science field,” says Steve Mindrum. “We’re going to find suitable partners for export and suitable import partners for strategic alliances.”

      Minnesota-based WindRider International LLC, wants to sell Chinese consumers on its easy-to-use, portable trimarans, or three-hulled sailboats. 

      “China offers a growing market for sailboats and an excellent opportunity to expand there,” says Robert Sanberg, the company’s chief operating officer. “Boating is becoming increasingly popular among the Chinese.”

      The company’s prime objective is to make initial contact with a Chinese company that could be a distributor for trimarans in northern China, where WindRider is focusing its efforts.

      For WindRider, the business match-making meetings are the most important part of the trade mission’s varied agenda .The company will use the sessions to find distribution and manufacturing partners.

      In addition, WindRider wants to learn more about the market in China, so it can customize its products to better meet the needs of Chinese sailboat enthusiasts.

      Making Important Connections in Business and Government


      Businesses are built on relationships. And relationships are built during trade missions.

      Just ask Dennis Nguyen, chairman and CEO of New Asia Partners, LLC and one of the delegates on the trade mission.

      New Asia Partners is a private equity group based in Minneapolis and Shanghai that has brokered deals worth hundreds of millions of dollars in China.

      Nguyen says participation in trade missions helps his company make valuable industry and political contacts and connections not only in China but also in Minnesota.

      There are some doors in China that can only be opened by a high-level U.S. or Chinese officials.

      For instance, New Asia Partners invests primarily in companies in Fujian, Shanghai, Hong Kong, Jiangsu, and Zheijang, but the group wants to expand into other regions of 
      China, including Shaanxi Province, Minnesota’s sister state in China.

      Xian, the capital of Shannxi Province, is one of the stops on the governor’s trade mission.

      “This trade mission will give me the chance to meet Shaanxi’s governor, thanks to Governor Dayton,” says Nguyen. “And the connections I’ll make with Minnesota agricultural companies on the business delegation with be just as valuable.”

      Measuring Success


      How do companies measure the success of a trade mission?  When companies make deals, find qualified distributors and partners, sell things and make money, the signs of success are obvious.

      But companies routinely say the missions are well worth the investment of time, money and trouble if they’ve helped lay the groundwork for the company’s future success and profitability in the market.

      And there are some companies that will never do business in a foreign market following a trade mission there. Does that mean the mission was a failure for them? Quite the opposite is true. 

      When the information gathered on a trade mission helps a company decide NOT to make the costly investments to enter a market where it is ill-suited to compete that, too, is a successful mission.