Going international | Six months after the Gubernatorial Trade Mission to South Korea and Japan, Mainebiz talks imports and exports with four participants
Last October, a group of 28 entrepreneurs, state officials and industry representatives left Maine for a trip to Asia. The purpose? The Gubernatorial Trade Mission, which brought participants together with potential business partners in South Korea and Japan.
Over the eight-day trip, more than 100 matchmaking meetings were scheduled from Seoul to Tokyo for entrepreneurs like Nick Nikazmerad, president of Eastman Industries, a Portland manufacturer of hover mowers, and Brent West, treasurer of Mathews Brothers Co., a window maker in Belfast. According to Maine International Trade Center, which coordinated the trade mission, Japan and South Korea are Maine's fourth and fifth largest trading partners. Maine businesses in 2007 exported more than $118 million worth of goods — from fish to semiconductors — to Japan. Maine's 2007 exports to South Korea also peaked at just more than $118 million, with nearly $67 million in wood pulp and paper exports. Those numbers have been growing at a fast clip during the past few years, according to MITC.
Six months after the trade mission returned to Maine, the Mainebiz editorial staff checked in on a few of the participants. We asked four trade mission participants to tell us stories from the trip — and about what's happened since they got back to Maine. We spoke with MITC President Janine Bisaillon-Cary, Chris Dowe of Cold River Vodka in Freeport, Mark Eichenbaum of The Baggler in Augusta, and Chris Frank of Intelligent Spatial Technologies in Orono. The following are edited transcripts.
Janine Bisaillon-Cary, president
Maine International Trade Center
511 Congress St., Portland
Employees: Nine
Locations: MITC's headquarters are in Portland, but it also has offices in Lewiston and Bangor.
Service: The trade center's services include technical assistance, counseling and leads for companies looking into international trade. It also offers workshops and coordinates trade missions for Maine companies.
Annual budget: Approximately $965,000, split between state and private-sector funding.
Contact: 541-7400
www.mitc.com
We had a really diverse crew [on the trip], which is not unusual for a trade mission. We usually meet with [participants] and talk about their products or services to see if there's demand on the foreign market side. We work really closely with the [U.S.] embassy and the foreign commercial service. We always do a research report and trade tracking to see what's going on in those markets and if they're markets of interest for Maine products.
We hire the foreign Commercial Service, which is a division of the U.S. Department of Commerce that has posts at most of the embassies abroad. They're the ones we hire to do the matchmaking meetings because their in-country representatives have a multitude of contacts in that market. They do all of the phone calls, the presentation of our materials and the talking to the buyers.
Before we go over, usually around four weeks out, we do video conferencing, if it's available, or teleconferencing between our suppliers and the commercial service attaches that are working on the matchmaking. They get to ask questions and make sure they understand the products and the questions the people on the foreign side are asking, and making sure the meetings they're lining up are appropriate for our companies. So by the time we get there, we give each of the buyers information on all the companies they're meeting, background information, and we do an orientation session.
The person that was most blown away, most impressed with the contacts he made, was Chris Frank. The poor guy was run into the ground from morning to night with meetings, even at our State of Maine reception, which is supposed to be fun networking. He was surrounded constantly. I mean, I've never seen buyers or potential partners as excited, because it's such a new technology. I mean talk about small entrepreneurial enterprise — there's no way he would have gotten that recognition if he had just shown up with his briefcase in those markets.
We are seeing a lot more demand for information, for help, for export trade education.
We have had a huge amount of inquiries from the building products and lumber sectors, and I think that's proportionate to what's going on in the housing market here. The last few years, we'd knock on doors and they'd say, "We're having a hard enough time meeting demand in the domestic market, come see us again later." Now they're coming to us and saying, "We want to get into Asia, and we want to get into Dubai — we want to get into some of these growing markets to offset some of the sluggishness on the domestic front." And we're happy to do that.
As told to Taylor Smith
Chris Frank, CEO and founder
Intelligent Spatial Technologies
20 Godfrey Dr., Orono
Founded: 2003
Employees: Five
Product: The company's iPointer software is a mobile-search and content-delivery platform. In other words, it's like a digital tour guide: It operates on a cell phone or other mobile device, and when customers point their phone at a building and push a button, iPointer uses GPS data, a digital compass and a wireless Internet connection to gather information about the property and display it on the device's screen.
Revenue, 2007: None, because the company is still in development, says Frank.
Projected revenue, 2013: "Several hundreds of millions of dollars," says Frank.
Contact: 866-6521
www.i-spatialtech.com
To date, I've spent several years of my life trying to interact with the northern New England investment community, and let's just say that they're not really into technology. Going to South Korea and Japan, I was able to interact with more technically sophisticated, early-stage investment communities, which actually makes it easier for me to raise capital.
I was doing two things: I was trying to meet the big players, so I met some wireless carriers and some handset people. But I was also trying to find some technology partners. My technology runs on cell phones but it also runs on servers, kind of like an Internet website. Well, we can have the servers and all that, but we don't know Japanese, we weren't born in Japan, we don't understand their perception of user interfaces, so we were trying to find a local partner to help us with that.
Actually, I'm going back there in June to make more connections. We were able to prove that there was a high level of interest. I met with LG [Electronics], Samsung and South Korea Telecom, NTT DoCoMo, which is the largest wireless carrier in Japan. And I also met with some smaller software companies. They really liked our idea. We just need to continue to go back there to build a relationship for a partnership. [These companies would] license our technology and incorporate it into their products.
By [going on the trip] I was able to come back and talk to investors in Silicon Valley and other places in the U.S. and say, "Look, here are the major wireless carriers and handset people and they understand the business model and think it's great." And that allowed me to meet more people and to network.
What was really important was not just the ability to go interact with these companies, but the fact that, because it was a gubernatorial trade mission, we were able to get at the top level. So for example, South Korea Telecom, the largest wireless carrier in South Korea, I was able to meet with the assistant to the CEO. And for Samsung, I had a driver take me out to Samsung and get me through security, which was not a trivial issue, and I was able to meet with top-level, director-of-business-development type of people. We were able to get stronger, higher caliber meetings, and that was definitely well worth the investment to go.
As told to Kerry Elson
Chris Dowe, director of production
Maine Distilleries LLC
437 U.S. Rte. One, Freeport
Founded: 2004
Product: Cold River Vodka, a high-end vodka
Annual revenue: Just over $1 million
Employees: 10, plus some part-time staff
Contact: 865-4828
www.coldrivervodka.com
We were looking to expand into other metropolitan areas. We'd been focusing on Boston and New England. We basically started our marketing strategy to become a regional brand. But we wanted to do some test marketing in other metropolitan areas. At the same time I went over on that [trade mission], we started in London. So that was sort of where we were headed — see how we do in Tokyo, see what we do in Seoul. It was an opportunity for us. Those are markets that are separated from the United States. So we thought if went out there and we did well, we would think harder about going to New York City and Los Angeles, Chicago, that sort of thing.
I met with a lot of large distributors in Korea and in Japan. I roughly had four appointments in each [country] while we were over there — we were in each for two days. We hooked up with a group in Korea, we're still negotiating with them right now to sell our vodka. And in Japan, we hooked up with, actually, an American distributor over there, one of the only Americans in the country that has a liquor license. But he's been over there selling micro-beers for the last three years, and he's a Colgate grad, a guy from upstate New York, a really nice guy. He knows his stuff, knows the market, and has great connections with all the big stores and all the big retailers and all the large bars, or the international bars, in the Tokyo area. So right now we're in the middle of talking with him about getting a shipment over there and getting started in Tokyo.
The markets over there are different; they're undeveloped, especially Korea. In Korea, vodka takes up less than one percent of the market. Most of the market is local whiskey, and they call it soju. And it can be made from rice, barley or potatoes, and it's cheap; it goes for $1 a bottle to $20, $30 a bottle. But the vodka market in Korea in the last two years has grown 15% every year. They are very American-friendly, obviously, and there is a lot of American influence over there, so they are starting to develop that end of the liquor industry. Japan, on the other hand, is a little more sophisticated. They're a lot farther ahead in terms of vodka use and sales.
I thought [the trade mission] actually turned out better because I wasn't sure what we were going to find. What we found is they love Maine. In Maine, more students from outside the [U.S.] come from Korea than any other country, and Japan is right behind them. They have L.L.Bean stores in Tokyo. They're very in touch with Maine, and they like Maine, especially the Japanese; they're very into natural products, organic products, and they look to Maine as a great place for good products and good people and, especially, good education.
As told to Rebecca Goldfine
Mark Eichenbaum, CEO and founder
The Baggler Co.
5 Glenwood Ave., Augusta
Founded: 2006
Employees: Four
Product: The Baggler, a lightweight plastic tool to make carrying shopping bags easier
Revenue, 2007: $600,000
Contact: 441-4953
www.thebaggler.com
It was my first [trade] mission, so I didn't know what was going to transpire and I didn't know what the quality of the appointments was going to be.
I had hired some consultants to take me around and they got me six appointments while I was in Japan — I was only there for two and a half days. I ran all over [Tokyo]. It really was absolutely amazing. I had the one day that was booked by the U.S. Commerce Department and then I had the one day I spent basically $1,500 for these consultants to take me to a whole bunch of places — Odakyu, Sony Plaza. Anyway, that day I went from seven in the morning till 12:30 at night and I took 26 subway rides.
What was really cool is the follow-up [that] came with one of the companies we had solicited to get an appointment with, they actually met up with me in Chicago this past month at the [International Housewares Association] show. I had hired these consultants when I went on the trip, and these people had tried to get an appointment with these people [Nissen Co., Ltd.] in Tokyo but it just didn't work out, we didn't have enough time. So then what happened was, at the trade show, they had recognized that I was exhibiting there so they came to see me at my exhibit. I had a booth in Chicago at the IHA trade show in the middle of March. So they came, they saw and because they were impressed with my exhibit and the product, we had subsequent conversations immediately after the show. [Nissen is] coming to see me in a few weeks, on the 21st of this month. It's the largest catalogue company in Japan, mail order catalogue, and they're coming to visit me. They just want to see my quality control, they've already put in an order — albeit it is small [an initial test order of 500 Bagglers].
What will it be worth? It's probably going to be worth a quarter-million dollars in additional sales [in 2008]. The numbers on Korea are still to be determined. I can't put a number on Korea because there's nothing there concrete, I've yet to establish anything.
As told to Sara Donnelly
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