| Minnesota firms like China — for its customers The Suzhou Industrial Park railway station is located one 30-minute high-speed train ride west of Shanghai. In 2011, Minnesota exported $585 million worth of machinery to China, a $71 million gain over 2010. And that success is reflected in the trade figures. What nobody knows, or is in a position to estimate, is just how much revenue the Minnesota-owned factories in China are sending to their parent companies back home. "There's no denying that we did shed a lot of manufacturing jobs in the U. Craig Swanberg, in Minneapolis, tells me that - despite the negative stereotypes associated with manufacturing in China - the decision to open a Minnesota Rubber facility in Suzhou has actually aided his company's growth in Minnesota. "China hasn't cost us any jobs in North America," he tells me. We've been able to grow because of the China business, not in spite of it. It's a model Dayton and his delegation hope to follow as they trek across China over the next nine days, in search of opportunities and markets. Because it's just more cost effective to manufacture in the U. in general," Swenson concedes, as he looks back on the 1990s and 2000s. Indeed, according Craig Swanberg, they've not only sold into it, they've thrived in it. In 2008, the Minnesota Rubber's first year selling into China, the company generated $2 million in revenues; last year, they generated $10 million. "In fact I don't think we've ever had a segment grow like that. That's illustrious company: Minnesota Rubber currently manufactures in Mexico and North America, and has previously manufactured in Singapore and France. Exporters across Minnesota - farmers to machine shop owners - are starting to adopt the same strategy, offering the state with an engine of growth in an economic environment that remains - charitably - murky for Minnesota businesses. Dayton trade mission On Saturday evening Gov. "You get to meet with people you wouldn't otherwise meet. No surprise, this weekend he's flying from Korea to Beijing to join Dayton's mission. One among many Non-disclosure agreements prevent the Minnesota Trade Office from revealing too much - including names - of the success stories that they've shepherded into Chinese profitability over the years. labor and regulatory costs. Rather, most of what they make is manufactured for customers in the booming Chinese market. "Minnesota Rubber's China plant isn't just about low costs," says Howe Yun, a native of China's Shanxi Province, and the plant's general manager. And why wouldn't it be? In 2011 China overtook Japan to become the world's second largest economy, signaling - among other things - China's emergence as a major market in its own right. It's preposterous to think that a U. But there's hope: China's economy hummed along at 9. For Minnesota businesses with products to sell, this is a matter of survival: Minnesota's economy grew just 1. It's the fourth major trade mission to China led by a Minnesota governor in a decade, and it will build on those previous missions with the express goal of opening markets and expanding opportunities for Minnesota businesses to sell into China's vast and ever-expanding marketplace. No surprise, China (including semi-autonomous Hong Kong) is Minnesota's second largest export market, with $2. Remarkably, that's roughly equal to the valuation of the trade that Minnesota did with top trading partner Canada in 2001 (a year in which China was the state's fourth biggest trading partner, with $619 million shipped. For farmers, it's an even bigger story. exports 72 percent of its soybeans to China, and Minnesota "exports even higher than that. But how, then, does a Minnesota company with a great product to sell into China go about doing it successfully? Dave Anderson, international marketing director for Jet Edge, a St. At the time, roughly 25 percent to 30 percent of the company's $25 million in annual sales were generated internationally - but almost nothing came out of the world's second largest economy. So Anderson rented some space for his company in a business incubator out by the port and joined Gov. "The doors which can be open to you because you're with that high-profile delegation are crucial," he tells me in a telephone conversation from Korea, where he's delivering a Minnesota-built machine to a customer. , a graduate of St. He's also a soft-spoken and exceedingly modest gentleman whose modesty obscures a deep and abiding knowledge of how to do business in China - especially if you're a Minnesotan. Chinese labor prices have been rising steadily for most of the last decade, but they began to accelerate in 2007 and 2008, becoming both cause and effect of inflation, and rendering many export-oriented manufacturing operations borderline non-competitive. "So now firms are coming over and setting up plants to serve their Chinese clients," explains Swenson. In many ways, Minnesota Rubber axi ride; Mercure, Bosch, and YKK during the next five. But I'm not here to see those global champions, as the Chinese call them. Since 2008, they've manufactured out of a three-story, 30,000 square foot factory here. |
Saturday, 9 June 2012
Minnesota firms like China — for its customers
