Last year, NH’s exports hit a high of $4.4 billion, and gains in NH’s export markets appear to be greater than the data reflects. Unlike 2013, another record-breaking year, crude oil traveling through NH by rail from the Bakken oil fields to Canada was not a significant part of 2014. In fact, crude oil exports fell 70 percent to $201 million (an expected drop as train companies changed routes). That drop was balanced out by big gains in other sectors such as electrical machinery and parts (up 69.8 percent), pearls and stones (up 56.6 percent), aerospace (up 25.5 percent) and pharmaceuticals (up 407.7 percent).
By the numbers, NH’s exports grew 5.7 percent last year with some of that still attributable to crude oil passing through on a train in 2014. (As Business NH Magazine reported last year, crude oil travelling through NH by rail to Canada is counted among the state’s exports as data is sometimes attributed to the state where administrative records are kept. In this case, that location is likely Irving Oil’s U.S. headquarters in Portsmouth.) Excluding crude oil, exports were flat between 2012 and 2013. In 2014, oil exports plummeted and when taken out of the picture, NH actually experienced a 20 percent growth in overall export activity.
Once again, NH’s top trading partner was Canada, followed by Mexico, the United Arab Emirates, China and Germany. Among those top five countries, exports increased by varying amounts to all but Canada, where exports fell 38 percent.
Pinpointing gains to specific companies is nearly impossible given that most of the 2,500-plus NH companies that export around the world are private. But there are many examples of industries that influenced those numbers.
A Focus on Aerospace
The NH Division of Economic Development operates on a shoestring budget after years of budget blows from the Legislature. In 2010, Dawn Wivell, founder and director of the NH International Trade Resource Center, resigned after 21 years, soon after the budget for the Office of International Commerce, which she directed, was cut by more than half. Wivell is now CEO of Firebrand International LLC, a global business consulting firm in Portsmouth.
The Department has been running lean ever since, though it did get a big break in 2012 when it received $700,000 over three years from a federal State Trade Export Promotion (STEP) Grant. The state used that money, in part, to launch the NH Aerospace and Defense Consortium in 2013, which Wivell manages. She says the rise in aerospace exports is due to inventories of aircraft worldwide that are close to be being retired. “There are a huge amount of aircraft going into production in the next 20 years. It’s putting a lot of pressure on the supply chain,” she says. “It’s one of the fastest growing industries in the world.”
The state has taken NH companies to three air shows in England, Paris and Singapore in the last two and a half years. A fourth trip is planned for Dubai this fall. Aircraft and spacecraft parts is NH’s eighth largest commodity with $74 million in exports in 2014, which accounts for only a portion of the economic activity in NH’s aerospace industry. Tina Kasim, program manager for the Office of International Commerce at the NH Division of Economic Development, says attending these air shows provides companies with networking and exposure they could not otherwise receive, and at a bargain price. The state brings five to six companies on each trip and provides a shared booth. The companies pay airfare and expenses, but Kasim notes a modest booth would cost $40,000. (Federal grants were used by the state to defray the cost of attending trade shows overseas.)
One company watching this trend and taking action is Axenics in Nashua, which received a STEP grant to achieve Nadcap certification, which is needed to provide orbital welding and hand welding services to the aerospace industry. Axenics executives traveled to Montreal a couple of years ago to meet aerospace companies, as Montreal has the third largest aerospace cluster in the world, Wivell says. “We thought we could increase the business,” says Chris Coutis, vice president of manufacturing at Axenics. “It’s good to be diversified.” He says company sales plummeted when the recession hit in 2008 after six years of growth, but bounced back by the end of 2009. The last few years, Coutis says, have been flat. “We’re steadily climbing back, and aerospace is part of a plan to get there.”
Starting Small
As head of the NH Department of Resources and Economic Development (DRED), Commissioner Jeff Rose knows money is always tight, so he makes sure the state or federal funds DRED receives are put to the best use. “One of the things that is good in New Hampshire is we have a strong network of resources we can provide to New Hampshire companies looking to export,” he says, noting such services as identifying new markets and finding and vetting distributors.
Andrew White used these services to help take his company, Comptus in Thornton, to expand into global markets. White, CEO, and a partner bought Comptus three years ago. White says the previous owners just answered the phone; they didn’t seek business. With the help of state services, Comptus has grown its exports from 6.3 percent of sales in 2012 to 13.5 percent in 2014.
Comptus, which manufactures wind sensors and environmental sensors for the building automation systems market (part of the state’s top commodity sector, electrical machinery and parts), directly exports to 18 countries, including Canada, Australia, Spain, Malta and Jordan. White says exporting has a surprising upside. “It’s almost easier sometimes to do business with foreign countries because they pay up front,” he says. “In the U.S., everyone wants [to pay] net 30, net 60, net 75. In the foreign countries they’ll flip you a credit card or PayPal account for a $5,000 order.” White says his international customers are all small accounts, but they add up and helped Comptus increase revenue by 10 percent last year.
Smaller companies are also entering the global marketplace. Richard Tango Lowy, owner of Dancing Lion Chocolate in Manchester, always imported (spices from Canada, chocolate from Vietnam, Madagascar and Costa Rica) but did not export. That was until last spring when a Tokyo importer called wanting to visit and potentially put his chocolates in a local gift catalogue. That led to extensive research, much of it provided free by the state, to figure out the trade codes he needed to use and the rules for exporting foods. It all came together last December when Tango Lowy shipped more than 300 pounds of chocolate worth $15,000 to Japan. He is now looking into whether to expand his export efforts. “We are very unique for a chocolate shop anywhere,” Tango Lowy says, explaining all of his chocolates are handmade and use high quality cacao grown in small quantities. “I perceive our competition to be in France.”
The extent of assistance the state will be able to provide NH businesses interested in exporting will depend on the outcome of budget negotiations, still underway at press time, and future grants. Right now, any international trade shows state officials attend must be funded by grant money. “As part of a responsible balanced budget we restored the ability of our state’s business resource center to travel out of state and to participate in trade shows. It is proof that we recognize international trade continues to spur economic development,” says Gov. Maggie Hassan.
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