Vermont Companies Test International Waters

by Jason Koornick

For a growing number of Vermont companies, exporting products and services is big business. The state ranked 37th out of 50 states in the value of total exports last year. Statewide organizations such as the Export Assistance Center, the Vermont Chamber of Commerce and the Vermont World Trade Office are working to expand Vermont's marketshare in other countries.

The quality of Vermont products and services and the strength of the Vermont brand continues to open up new foreign markets. Vermont businesses enjoy unique advantages in exporting compared to other states. For some companies, these include the proximity to Montreal, a major shipping center; the quality of life for employees and the association of the Vermont brand with quality, safety and ethics. Disadvantages may include inaccessibility to metropolitan areas, lack of qualified employees and higher energy costs compared with other states.

From industrial and manufacturing equipment to education, consulting and tourism, Vermont's exports take on many different forms. Last year Vermont businesses exported $4.3 billion worth of goods to foreign markets. By the second quarter of 2000, the value of exported goods had already passed last year's total.

Here are examples of Vermont companies that are exporting in various ways:

Tivoly Inc., on the Canadian border in Derby Line, manufactures bits, dies, reamers and other tools for the metalworking industry. It is a subsidiary of Tivoly in France and has affiliates in Spain as well as a branch in England that handles European sales and marketing. The American branch was established in 1988 to sell parts in the U.S. market. Exports make up approximately $1.4 million annually, which is less than 10 percent of the Derby Line company's total sales. Of these exported goods, most end up in Canada indirectly since Tivoly makes products for a distributor that sells to Canadian businesses. Although only a small portion of the sales are exports, CEO Philippe Bourg says it is looking into expansion into a number of foreign markets, including India and Mexico.

After a trade mission to Taiwan in 1999 with the Vermont Chamber and Gov. Dean, Tivoly determined that direct competition with Japanese imports was too risky and did not pursue the opportunity. NAFTA has allowed Tivoly to be more price-competitive in Canada and Mexico but Bourg points out that there are limiting factors to their expansion in those countries, including administrative costs and shipping. Tivoly established itself as a "bond broker" to facilitate customs transactions by setting up a Canadian bank account and paying taxes there.

While Tivoly may be exporting physical goods, Champlain College in Burlington is selling a different type of product in the international marketplace: an American education. Scott McIntyre, the international admissions and recruiting officer at the college says attending college in the United States is very attractive to foreign students. For the past 10 years, the college has actively recruited international students; 60 out of 1,400 students at Champlain are from outside the United States. McIntyre says that there has been a leveling of Asian students in recent years due to the economic climate in those countries and increases in students from Africa, Europe and the Middle East.

The Internet has played a crucial role in reaching potential foreign students. Champlain has articulation agreements with four European schools, which allow foreign students to study at Champlain and receive credit at their home universities. The college recruits foreign students by attending international college fairs and by meeting with educational advisers in other countries.

To overcome the language barrier, foreign students must prove they have a certain level of proficiency in English. A special orientation acclimates new students to American culture and an international adviser offers guidance to students. McIntyre says that while it might be slightly more costly to recruit international students, the cultural benefits of a diverse student body make it worthwhile.

Green Mountain Coffee Roasters has been exporting coffee since 1994. Spokesperson Rick Peyser says the company is slowly bringing its product to Taiwan, Japan, Canada, Turkey, Greece, Italy and the Caribbean. A trade mission in 1999 organized by the Vermont Chamber led to an important Taiwanese contract for the company. Obstacles facing the company's expansion into foreign markets include problems with personal contact, customs and paperwork, and the need to address different coffee cultures. Turkey has a very strong coffee culture in which GMCR is trying to find its niche. Less than 3 percent of GMCR's total business is in exports but Peyser says it is the potential for growth that keeps them in foreign markets. •