Exports in the bag: More Montana producers are cashing in on foreign sales

2013-09-01T00:15:00Z 2014-05-14T11:57:05Z Exports in the bag: More Montana producers are cashing in on foreign salesBy TOM HOWARD The Billings Gazette
September 01, 2013 12:15 am  • 

Nine years ago the Outside Magazine Buyer’s Guide selected a bag by Billings-based Red Oxx Manufacturing as part of its Gear of the Year. Such widespread exposure for Red Oxx’s PR5 Safari Beanos bag helped spark interest from buyers scattered all across the globe.

These days, Red Oxx’s customers are almost as likely to be from Calgary or Amsterdam as they are from Bozeman or Billings.

Jim Markel, Redd Oxx’s chief executive, said the company’s international sales have been on an upswing in recent years, and now account for nearly 20 percent of all sales.

International sales can help buffer slow periods. Europeans, in particular, seem to appreciate quality products, and that may be a factor in Red Oxx’s popularity, Markel said.

“It allows you not to have all of your eggs in one basket,” he said.

Other Montana manufacturers — from wheat farmers to industrial machinery manufacturers — are seeing an uptick in exports, said Sara Warren, trade officer for the Montana Department of Commerce.

Companies in the Billings area exported a record $141 million worth of merchandise in 2012, a 39 percent increase from 2011.

Billings was among more than 200 metro areas to report growth in exports last year, according to trade experts.

Carey Hester, director of the U.S. Commercial Service Export Assistance Center in Missoula, said Montanans shouldn’t be surprised that exports are on the rise.

The Big Sky State has seen export growth for seven out of the past 10 years, Hester said, mentioning that Montana exports have doubled over the past decade.

According to information released by the U.S. Department of Commerce’s International Trade Administration, U.S. companies exported a record $2.2 trillion in goods and services in 2012. Exports also supported nearly 10 million American jobs. For perspective, keep in mind that the U.S. hasn’t experienced a trade surplus — when exports exceeded imports — since 1975.

“The growth in metro exports shows that selling internationally has become a much more viable option for many in our state,” Hester said. “In many cases, the Internet, ease of transportation, and an array of available export services has reduced the distance between exporter and importer to click on a desktop.”

Earlier this year, MRL Equipment Co. Inc., of Billings was named Montana’s 2012 Exporter of the Year. MRL manufactures high-quality road marking and striping equipment and components.

MRL has exported directly to 18 countries, and its distributors are selling in many more. Exports comprise 20 percent of the company’s annual sales to countries that include South Korea, Australia, Turkey, Chile, Canada, Mexico, Saudi Arabia, Belgium, Brazil, China, the Dominican Republic, Iceland, Lebanon, Mexico, Nigeria, South Africa, Sweden, Columbia, Nicaragua, Venezuela, Ecuador, Panama, Italy and the United Kingdom.

Matt Varilek, regional administrator of the Small Business Administration, said the SBA has played a role in President Barack Obama’s initiative to double exports. SBA programs are geared specifically toward encouraging small businesses to boost their exports.

“Exports are a great opportunity for Montana’s small businesses, especially when you think about the size of markets abroad,” Varilek said. “Sometimes a small business owner doesn’t know where to start. That’s where we come in, and along with our partners in the Department of Commerce, we try to help open some doors.”

Montana wheat remains the state’s single biggest export. Last year Montana sent 117.2 million bushels of wheat to exporting facilities. Japan purchased about half of Montana wheat exports. Three-fourths of Montana’s wheat crop — valued at $1.7 billion last year — goes to Asian markets.

Montana exported $397 million worth of mineral fuel, which includes coal and light oil. Industry officials expect Montana’s coal exports to grow in future years depending on whether new West Coast ports are built.

Montana exports have grown across the board. But farmers who raise lentils, peas and other legumes are also cashing in on international demand, said Sara Warren, trade officer for the Montana Department of Commerce. Last year Montana exported $62 million worth of legumes, a 128 percent increase from 2011.

Canada’s energy industry is also paving the way for exports from the Billings area. Perhaps the best known example is Bay Ltd., a Texas manufacturing firm that purchased the former Holland loader manufacturing facility in 2008. Last year Bay’s Billings operation fabricated 29 steel modules that were loaded on flatbed trailers and hauled to Canada for use in the tar sands development. Earlier this year the company announced that it had received a contract to fabricate another 89 modules in Billings.

Wayne Gardella, the SBA’s Montana district director, said several Billings companies are involved in fabricating equipment for Canada’s energy industry.

“The fabrication shops here are very busy, and it’s the same thing in Great Falls,” where a Canadian firm, ADF Group, is building a metal fabrication facility for servicing the oil sands industry.

Many equate globalization with shipping jobs to countries where workers earn pennies per day, while shelves in American retailers overflow with cheap foreign-made merchandise.

On the other hand, a number of American companies are benefiting from the relentless march of global trade.

Markel said Red Oxx’s international orders are one welcome development that resulted when the company decided to concentrate on Internet sales more than a decade ago.

Markel’s dad, Jim Sr., started the company in his home during the early 1990s. The company originally specialized in weight-lifting accessories and other fitness gear, selling through a traditional dealer network. But the younger Markel and his business partner, Perry Jones, decided to take the company in a different direction by concentrating on rugged luggage, and skipping the middleman.

Over the years, Red Oxx has received offers from traditional retailers that were interested in carrying its products. Instead, Red Oxx prefers its e-commerce sales strategy that boasts: “Not sold in a store near you.”

Red Oxx’s web-centered marketing strategy features testimonials from loyal customers as well as essays and photos of Markel’s own international adventures, where he puts Red Oxx’s products through their paces, while also managing to have a little fun.

Copyright 2014 The Billings Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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