CT Commerce Dept. office launching export research arm

PHOTO | Contributed In February, Jonal Laboratories President Marc Nemeth (sitting, right) signed a long-term supplier agreement with Dave Emmerling (sitting, left), Pratt & Whintey's vice president of strategic sourcing. As part of the deal, Jonal will supply the East Hartford jet engine maker with non-metallic, rubber-based elastomeric parts that will be used for Pratt & Whitney's PurePower engines.

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By Matthew Broderick Special to the Hartford Business Journal

Marc Nemeth, president of Meriden-based Jonal Laboratories, is no stranger to exporting. His manufacturing company, which produces sealing parts for the aerospace industry, has been selling its wares in foreign markets for nearly 40 years. But even Nemeth, the second-generation in the family-owned business, was surprised to realize that exports last year accounted for nearly 15 percent of his company's $10 million in annual revenue.

“The percent of our revenue coming from foreign markets [mostly Canada and Europe] has consistently increased over the last five years,” he said.

Jonal Laboratories isn't the only Connecticut company leveraging exports. About 6,000 Nutmeg State firms — mostly small to mid-sized businesses — exported $15.9 billion in goods in 2014, down from $16.4 billion a year earlier. Despite the strong numbers — Connecticut ranked 27th for exporting among all states in 2013 and 18th per capita — many state trade and industry experts believe more can be done to boost overseas sales. To achieve that end, the U.S. Department of Commerce office in Connecticut is developing and will begin to sell market research reports and consultation about foreign market opportunities and risks.

Anne Evans, district director of the U.S. Department of Commerce in Connecticut, said the service — which will generate market-specific reports for businesses for $50 — will help companies address a primary impediment to international trade: lack of knowledge about foreign markets. That was rated as the No. 1 challenge to exporting by 18 percent of the 140 businesses that responded to a recent international trade survey conducted by the Connecticut Business & Industry Association.

“We are uniquely positioned to help Connecticut businesses grow their exports,” Evans said, noting that her office not only has access to extensive market research, but more importantly — through the U.S. Department of Commerce — has experts around the globe who understand foreign markets and cultures at the ground level.

About half of the Connecticut exporters surveyed in CBIA's 2015 trade survey said they used the services of trade representatives to establish new markets, up from 36 percent in 2013. Growing that number further, Evans said, will help more companies overcome the fears of the unknown.

Jonal Laboratories' Nemeth said his company has relied upon the state's Department of Commerce to build foreign relationships that are, he argues, essential to success in the export business.

“In foreign markets, it takes an extended time — as much as five years — to build relationships [with business partners],” Nemeth said, noting his company works as part of the supply chain for some of the world's largest aerospace companies. “Our Connecticut Department of Commerce has helped connect us through trade shows in Europe, set meetings with key partners and make recommendations.”

By her own conservative estimates, Evans says her department — working with more than 2,000 Connecticut businesses — helps generate approximately $125 million a year in revenue. Growing that number speaks to a strategic focus on competing in an increasingly global economy where nearly 95 percent of the world's consumers live outside of the United States, and foreign market opportunities are expected to grow significantly in the next 15 years. In fact, by 2030, more than 2 billion Asian consumers alone will join the global middle class, fueling strong demand for consumer goods and services.

That's good news for Connecticut businesses like Jonal Laboratories, which this past May was one of 45 small-to-midsized companies nationwide to receive the President's E-Awards — now in its 53rd year — in recognition of the company's significant contribution to the expansion of U.S. exports.

Nemeth continues to see a bright horizon for his company's foreign opportunities, which he expects will drive much future growth; they have projections of doubling revenue in the next three to five years. “We have nearly 40 new clients,” Nemeth said. “And the majority of them are in foreign countries.”

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