Overseas business is creating opportunities in Minnesota. But finding bilingual workers with the right skills is a challenge.
Shirley Xian, VP, marketing analytics and pricing at Datacard Group just returned from a 2-week trip to China. The company makes the equipment for personalized ID and credit cards including a growing number of overseas customers. Tuesday, April 3, 2012.
Shirley Xian recently whirled back to her Minnetonka office from China, where she spent two weeks meeting 50 potential bank customers for her employer, Datacard Group.
As Xian returned a flurry of phone calls to China, Juselly French a Colombian attorney and head of Datacard's human resources department, was on the phone downstairs speaking in Portuguese to employees in Brazil. Minutes later, she was reading job reviews in Spanish with a manager in Mexico.
French and Xian, a former banker with HSBC, are just two in a string of recent Datacard hires thanks to growing global demand for the company's secure financial and identification card products. They represent key "bridges" to the outside world, and Datacard's looking for more like them.
"We can't hire fast enough, and it's all being fueled by our exports," said Russell St. John, Datacard's senior vice president of global marketing.
Growing exports has become a strategy of choice for policymakers from St. Paul to Washington, D.C. State officials, for example, are hoping Twin Cities firms can double exports, to $35 billion, within five years. The bet is that sales abroad will translate into more jobs here at home -- especially for smaller companies that may be new to exporting.
But many small and medium-size companies complain that it's difficult to find workers who are bilingual or skilled in just the right areas of international marketing, law, transit or engineering.
"The jobs that are being created are really good, valuable jobs in manufacturing, marketing and engineering. And most are right here in Minnetonka," St. John said. But recruiting is difficult.
The company needs people with engineering and marketing backgrounds and software technologists who can read specs or contracts in other languages or act as middlemen between customers and salespeople in fast-growing markets including China, Brazil and India.
Amy Liu, co-director of the Brookings Institution's Metropolitan Policy Program, found that exports make up 10.7 percent of U.S. gross domestic product. Twin Cities area exports grew 32 percent between 2003 and 2010, but account for just 9.8 percent of the state's GDP. So there is room for growth here, Liu told the Star Tribune.
Ryan Kanne, director of the U.S. Commercial Service Office in Minneapolis, said U.S. companies itching to do business abroad should be smart about first learning the trade process, doing their homework, and tapping technical experts such as those at his office, the U of M's Minnesota's Center for International Business Education and Research, the local Small Business Administration, and the Minnesota Trade Office and Enterprise Minnesota, a trade group.
"My first question to you as that new green company is what do you want your [overseas] distribution model to look like and how do you want to sell your product there and provide post-sales support?" Kanne said. "Of course you can do it, but the blunt question is what is it going to cost you? Our job is to help you get into markets faster with less mistakes."
Despite the challenges, Minnesota companies are making progress.
Datacard, Schaefer Ventilation in Sauk Rapids, Mate Precision Tooling in Anoka, EarthClean and ProtoLabs in Maple Plain have won overseas contracts that will translate into 100 Minnesota jobs combined over the next 12 months. Overseas orders helped manufacturers such as Atek Companies in Plymouth, Jet Edge in St. Michael and Gear Grid in Forest Lake add 87 workers in the past 12 months.
Minnesota companies exported $20.3 billion in manufactured goods last year, $17.6 billion of which came from firms in the Twin Cities metro region. According to a new report by the Brookings Institution in Washington, D.C., those exports created 63,242 "direct" jobs in the Twin Cities last year and another 53,913 supplier and transit jobs.
Don Mason, sole proprietor of KwikRink Synthetic Ice in Maple Grove, has no employees. But he contracts with ice rink fabricators, installers, machinists and shippers to market his hockey rinks across the United States, Canada, Turkey, Kuwait, Bahrain and other countries.
"I don't want to mislead anybody -- I'm not 3M,'' Mason said "But there is a ... trickle-down type of thing that happens just because I do regular business with six or so companies. They have to buy extra trucks for shipping, add shifts and there's fabricating and advertising and warehousing. I have a part in all that and help these businesses grow."
Datacard manufactures high-tech machines that print secure government ID cards, credit cards, microchip-laden smart cards and passports. Last year sales hit $450 million, with 70 percent coming from outside the United States. At the same time, employment at its Minnetonka headquarters grew to 800 workers, or 62 percent of its global workforce of 1,300.
Datacard also is returning manufacturing work to the U.S. from overseas. It recently ended manufacturing contracts in Malaysia and other Asian countries and is bringing assembly, laminating and laser functions back to Minnetonka. As a result, the local production staff doubled to 100 workers; a second shift has been added, and a third shift is slated for fall, said Brain Urkiel, manufacturing vice president.
In Anoka, Mate Precision Tooling will add 15 to 20 technical, quality improvement and sales workers this year, said CEO Dean Sundquist. Most of the new hires will work in Anoka and many will be fluent in German, Chinese, Spanish, French or Russian as well as English. The company generates about $70 million a year selling machine tools and has 200 workers in Minnesota and 200 more around the globe.
"We make a lot of goods here to a semi-finished state, and then we send [them] over,'' Sundquist said. "We have to have Chinese speakers here working on China's hours and German speakers working during Germany's hours, and Portuguese speakers for Brazil. We added a lot more of that."
But can Mate Precision achieve the double-digit growth goals sought by President Obama and Minnesota Gov. Mark Dayton? Sundquist isn't sure that's realistic.
"I'd love to have our export sales grow 12 or 13 percent a year. But [it] is probably not going to happen," he said. "Industrial economies usually grow at just 3 percent a year."
Neil Crocker, president of Schaefer Ventilation Equipment in Sauk Rapids , said it's "a noble goal" and easy for the politicians to suggest doubling exports. "But it's hard to do. It's not a walk in the park."
For years, Schaefer Ventilation, which makes large industrial fans for dairy farms and other agricultural businesses, was an "accidental exporter," Crocker said. Foreign customers would attend a U.S. trade show or stumble across the company's website and place a single order.
When the 50-worker firm shifted from "accidental to intentional exporter," two years ago it chose 20 potential trading partners in other countries. Success proved elusive.
"We were spinning our wheels," Crocker said. It was tough finding reliable dealers and distributors. And every potential contract meant bringing in an attorney at a $400 an hour fee. A coach from an export training class sponsored by the U.S. Commercial Service Office in Minneapolis suggested that Schaefer narrow its focus.
So, Crocker and international Vice President Pete Lyle focused on the Middle East. They went to Egypt two years ago and won a $200,000 contract to make fans for a Dannon yogurt plant there. Then the revolution hit and dreams of tripling exports faded. But Pakistan worked flawlessly.
"Pakistan is absolutely growing for us,'' he said. "We got our first contract a year ago, and we're still shipping to Pakistan.''
Today, Schaefer ships fans to Saudi Arabia, the United Arab Emirates, Pakistan, Egypt and Central America. International sales grew from $1 million in 2010 to $1.5 million today. It's on pace to reach $2 million this year. Local employment grew from 40 workers to 50. Ten more hires are expected for this year.
"We have definitely moved out of the accidental mode," he said.
Dee DePass • 612-673-7725