The North Dakota Trade Office is assembling a new team of experts to help exporters in the state gain better access to export capital, labor and shipping, all stumbling blocks to one of the fastest-growing export economies in the United States.
"Some companies, particularly in agricultural equipment, for example, are taking back-orders for up to a year and a half," says Susan Geib, executive director of the trade office. "Some in agribusiness simply waive orders because they are at capacity and can't fulfill more new markets or new orders."
The U.S. Department of Commerce Economic Development Administration awarded the trade office a $334,812 matching grant to develop and direct the Resource Management Group.
Heading up the new team will be Mike Seifert, a native of Dickinson, N.D., who has managed the financial services groups for UNISYS Corp. and Morrison Knudsen. Seifert also spent 10 years at Bobcat as director of global business development and controller of global operations. Most recently, he has played a key role in directing the development and funding of Northern Prairie Specialty Oils L.L.C., a canola oil extraction and refining facility to be built in Cavalier County, N.D. Seifert will work with North Dakota exporters to find solutions to their problems.
"We hired Mike and the others to assess their situation and help them to expand capacity by offering either alternative suppliers or access to capital which would enable them to acquire the infrastructure (support) that they need to get beyond capacity," Geib says.
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Opportunities
North Dakota led the nation last year in year-on-year export growth, and this year, as of June 30, is 62 percent higher than the same period the year before.
"If you break that into agriculture, the global demand for agricultural products has been strongly driven by the sustained growth in not only China, but India," Seifert says. "As their economies get stronger, the people will continue to want to have better diets and nutrition."
All of that places the nation's top state in 16 different commodities in a "very positive manner," he says. "I couldn't be more excited about that. It's an awesome time for North Dakota."
As for the trade team, he wants people to know that he's assembling a group of enablers, capable of fast-tracking projects and getting results. Members will include the Dakota Manufacturing Extension Partnership, licensed custom brokers, contract manufacturers, investment banks and private equity organizations and North Dakota colleges and universities.
Together, this team will help exporters identify export challenges and develop strategies to deal with them.
Access to capital
In the middle of the credit crunch, many would-be exporters may be experiencing difficulty in locating financial backing. Seifert says it may not be as bad as we think.
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"Regardless of the crisis, as we simplistically call it, I think that there's still money available for good projects and good demand in the marketplace," he says. "We've seen that, time and time again.
Geib says many of their current clients are established companies trying to leverage an overseas opportunity.
"Normally, they are going to fall somewhere in the $2 million to $30 million investment category to expand their business internationally and get off an running," she says. "The challenge we have in North Dakota is that if you want to get financing for greater than $2 million, there are not a lot of avenues open to you, right now."
In response, they're bringing in private equity firms and working with them to develop a program to provide North Dakota companies access the to capital they need. For ag manufacturers, that could mean the ability to acquire valuable resources.
"It could secure a lot of things, from new equipment and automation, and for updates to certain types of facilities," she says. "It could enable you to access human capital. It could enable you to offset your manufacturing and contract it somewhere."
Added capital also can help with setting up some effective overseas support, Seifert suggests.
"It could allow you to establish a distribution center, perhaps in the Pan-European community or Far East," he says.
All of which would be backed by a full compliment of trade office support services, including letters of credit, logistics, hedging, commodities strategies, risk management.
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"All those things that compliment the fundamentals," he says.
Transportation
Getting North Dakota products to and on oceangoing ships has been a growing issue in recent times, largely because of the devalued dollar, which encourages more exports and places greater stress in inland transportation providers.
"The infrastructure in the state is really challenging a lot of our local businesses and their growth," Seifert says. "We've exacerbated the infrastructure problem with the introduction of more high-volume commodities. We are working on . . . at our annual meeting in March, in bringing globally recognized logistics providers to help provide at least insight and advice to us on these topics."
The "container crunch" is one of the top three issues on the trade office's radar, Geib says. Seifert is now assessing the overall picture.
"Our situation here, as I understand it, is best met by bringing boxes from Chicago and or Minneapolis," he says. "This can run upwards of $800 to $900 just to logistically place that box here, which is a deterrent to our local producers and their competitiveness because they're having to endure that exorbitant amount of logistics charge."
Seifert says he is bringing the logistical providers together with North Dakota exporters to try and find "palatable solutions."
Work force
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North Dakota had the fastest growth in the country in manufacturing export volume last year. But manufacturers now are fighting a shortage of qualified labor, a problem that directly affects their ability to meet increased production demands.
Geib says this has not gone unnoticed by the state.
"Some of the things that the state is doing is going to places that have a high unemployment rate and recruiting workers," she says. "They went to Michigan and they went to Colorado, recently and had a very significant number of people who are interested in coming to North Dakota."
Efforts like this and the creation of trade office's Resource Management Group show real commitment to breaking down these barriers to trade, according to Seifert.
"North Dakota is one of the most aggressive states, relative to promoting infrastructure and employment growth," he says.
The bottom line is that through providing capital or other ways to improve productivity, "we will then be able to grow these businesses faster and enable them to take advantage of these global opportunities that they have in front of them," Geib says.
Contact info
North Dakota Trade Office
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112 University Drive., Suite 260
Fargo, N.D. 58102-4661
(701) 235-3638
