Santander execs: Pa. on top of exporting biz

By - Last modified: April 24, 2014 at 11:51 AM

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Alvaro Diaz, with the Greater Lehigh Valley Chamber of Commerce, speaks at the international trade breakfast seminar hosted by the International Business Council of the chamber.
Alvaro Diaz, with the Greater Lehigh Valley Chamber of Commerce, speaks at the international trade breakfast seminar hosted by the International Business Council of the chamber. - (Photo By Brian Pedersen)

The Lehigh Valley is the third top exporter in Pennsylvania and experts say it's an encouraging sign that even small businesses benefit from doing business overseas.

By expanding internationally, businesses can capture a large percentage of the world's purchasing power, reap increased profits, gain faster sales and generate more jobs.

These were some of the outcomes experts disclosed in a panel discussion this morning at an international trade breakfast seminar hosted by The International Business Council of the Greater Lehigh Valley Chamber of Commerce and sponsored by Santander Bank at the Holiday Inn Conference Center in Breinigsville.

Middle market companies can increase revenues by 24 percent when they do business overseas, said Pamela Campbell, Santander's regional executive for the Pennsylvania middle market in commercial banking.

"There are lots of opportunities to be selling overseas," said Cristina Saenz, director of Santander Bank international trade.

Many nations not only are showing fast growth but a rapidly rising middle class, opening up emerging markets.

As an example, with the U.S. population at 317 million people, China's middle class alone is about 300 million people and growing, she said.

The top importing nations of 2012 include the European Union, the United States, China, Germany, Japan, the United Kingdom, France, Netherlands, Hong Kong and Korea. Global U.S. trends show that in 2012, the big players in imports include China, the European Union, Canada, Mexico and Japan, according to Saenz.

In the Lehigh Valley, 80 percent of the trade goes to Spain, Canada, Mexico, China, Germany and the Netherlands, while the Lehigh Valley is the No. 3 exporter in Pennsylvania, she said.

Pennsylvania is contributing 3.3 percent of the gross domestic product of the U.S. and a 3.7 percent share of total U.S. imports in 2013, according to Saenz.

"I have to say those are some pretty good numbers," Saenz said.

So why expand internationally?

Saenz said it has been proven that companies are 8.5 percent less prone to bankruptcy when they do business overseas.

"Your sales will grow faster, therefore you create more jobs," Saenz said.

However, it's important to find the right country to do business with based on your industry, she said.

As an example, for medical device manufacturers, China is a great place to go, she added.

With countries such as China, it's important to establish a relationship before doing business. Often, U.S. executives will spend a lot of time dining and socializing with prospects from China before doing business, she said.

However, the wait can be worth it because companies, even smaller ones, can differentiate themselves right away by doing business internationally.

"Only 1 percent of the companies in the U.S. are exporting; that's a very low figure," Saenz said. "Seventy percent of the purchasing power is outside the United States."

Companies are hoarding cash and have large amounts of money trapped overseas, said Elliott Dix, executive director of foreign exchange for Santander global banking and markets, who offered a view of the global economy.

"I think there are still lingering fears about the economy," Dix said. "I feel like a lot of U.S. consumers are tapped out, slowing down their binge spending."

The U.S. economy is about 70 percent service-based, so even small businesses in the Lehigh Valley who are looking to offer a service can export their business, according to Neven Bonev, a mid-Atlantic trade sales officer for Santander.

"I would say start small to get a feel for how it goes," Bonev said. "Don't shy away from any country just because you think it's a small transaction. Whatever you are comfortable with, I think you should go for it."

However, one area that's daunting for businesses looking to expand overseas is the language barrier, Campbell said. Often, contracts may not be in English, but she said Santander has many resources to help businesses translate these documents, in addition to the company's online trade portal.

"We'd love to have the opportunity to grow your business," Campbell said.

The Santander trade portal is an online site to help companies explore and enter new markets. The portal is free for the bank's customers, said Liza Ryabkina, vice president and product manager for Santander Bank international trade. The portal shows how to analyze market trends, understand import/export shipment requirements and find business partners, according to Ryabkina.

One of the biggest risks, however, is getting prompt payment and deciding on the proper currency to use. However, the portal also can help businesses answer these questions.

Brian Pedersen

Brian Pedersen

Reporter Brian Pedersen covers construction, development, warehousing and real estate and keeps you up to date on the changing landscape of our community. He can be reached at brianp@lvb.com or 610-807-9619, ext. 108. Follow him on Twitter @BrianLehigh and read his blog, “Can You Dig It,” at http://www.lvb.com/section/can-you-dig-it.

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