Article by: David Phelps
The SBA's export promotion program aims to help small businesses develop markets abroad through federal grants.
With the goal of helping 200 state companies develop export markets over the next year, the Minnesota Trade Office will receive $490,000 from the U.S. Small Business Administration, the federal agency said Monday.
Speaking on the production floor of Delkor Systems Inc., a Circle Pines company that parlayed a $5,000 grant last year into a projected $1.5 million in new export sales in 2013, SBA Administrator Karen Mills said the first round of seed money in 2011-2012 was a clear success.
"All across America, it is small businesses that are creating jobs and our job [at the SBA] is to put the wind at their back," Mills said, standing in front of a yogurt packaging machine manufactured by Delkor.
Mills was flanked by Minnesota's two Democratic senators, Amy Klobuchar and Al Franken, and trade office executive director Katie Clark as many of Delkor's 160 employees stopped work and looked on.
Clark said the trade office distributed $454,000 to 60 Minnesota small businesses last year to help alleviate the costs of marketing themselves internationally.
"Trade shows and trade fairs truly make a difference," Clark said. "This has been a huge resource for small businesses."
Delkor CEO Dale Andersen said his company applied for and received $5,000 from the trade office to attend the Packaging Machine Manufacturing Institute trade show in Mexico City earlier this year where his company's line of food packaging products was well received.
"Exporting is difficult," said Andersen, noting that Delkor's volume of exports has doubled in the past three years. "We now do packaging for cream cheese in Japan, green mussels in New Zealand and products for Cargill."
Business has been so good for Delkor that it is moving into a new, larger manufacturing facility next month. The company also has hired four bilingual employees with experience in Latin American markets where Delkor sees expansion opportunities.
Revenue for Delkor is $55 million a year, including $30 million a year in new machine shipments. Exports account for 25 percent of the new machines, up from 10 percent three years ago.
The SBA grant program is a two-year $60 million effort to boost U.S. export sales by small businesses. It is called the State Trade and Export Promotion program (STEP).
"Our [SBA] goal is to double our exports by 2014 and we're well on the way to do that," Mills said.
"Manufacturing is coming back and its coming back strong," said Franken.
Clark said the grants are awarded on a competitive basis and can be used for more than attending a trade show. She said one Minnesota firm is using its grant money to produce some of its marketing materials in Mandarin as it looks for sales in China.
Abby Pinto, executive director of the Center for International Business Education and Research at the University of Minnesota, said programs such as STEP can be critical to small business success in foreign markets.
"It's a very helpful kind of assistance," said Pinto, whose center is part of the U's Carlson School of Management. "It gets companies directly into the international market and that's often the exact step they need to take."
Klobuchar, who helped pass legislation that included the STEP program, said companies of Delkor's size need help to expand beyond domestic markets.
"These grants are worth their weight in gold," Klobuchar said. "This is the ultimate made-in-America time."