Gov. C.L. “Butch” Otter sees a rebounding climate for exports to China and anticipates that Idaho businesses could reach $5 billion in overall sales abroad this year.
That could mean a return to the export sales record set in 2008 after a decline to $3.9 billion in exports during 2009 as part of a slowdown in global trade.
The governor leaves for an 11-day trade mission to China June 4 with representatives from 18 businesses and industry groups in an effort to drum up sales from Idaho.
Trade missions generally cost the state between $45,000 and $55,000, though they can result in multi-million dollar sales for the companies and industry groups that participate.
The current trip, which includes stops in Shanghai, Guangzhou and Beijing, will cost industry participants $7,400 each.
This is Otter’s fifth trade mission as governor. Other trips have included visits to Cuba, Mexico, southeast Asia and a previous visit to China.
The Idaho Potato Commission, which has attended all of Otter’s trade missions, can trace millions of dollars of new sales from Idaho potato processors directly to the trips, said president and CEO Frank Muir.
Some of the major hotels in Macau – a Chinese territory that is considered the Las Vegas of Asia – started buying fresh Idaho potatoes after a meeting with the commission. One of the premier steakhouses and several upscale retail stores in Hong Kong are also now buying from Idaho. A major quick service restaurant in Vietnam also decided to switch back to Idaho potatoes after years of buying from Canada. And Idaho potatoes now make up one-third of potato imports to Mexico after years of relationship-building.
“These trade missions have a very positive impact on Idaho industry,” Muir said. “You’re able to hit government at the highest level and business leaders at the highest level, and that’s where decisions are made.”
Other successes include Dubois-based Larsen Farms Hay Terminal selling nearly $2 million worth of hay to a dairy in China, Boise-based PakSense lining up sales of temperature-tracking labels in Mexico and more than $3.7 million in initial sales reported by companies that participated in a trip to southeast Asia.
The state Department of Commerce, which helps organize the trips, decided on another trip to China based on input from businesses.
“Overwhelmingly, the people that would go on a trade mission wanted to go to China,” said spokeswoman Bibiana Nertney.
Export sales by Idaho companies rose by more than 8.5 percent in the first quarter of 2010 from the previous period, to $1.22 billion for January to March. That compares with flat export growth nationwide.
The top Idaho export category continues to be semiconductors, but exports of aircraft, office machinery, vegetables and seeds, precious metals and paper products remained strong, according to the Department of Commerce.
China is Idaho’s third largest export market, and the country’s gross domestic product is expected to grow 7-8 percent in 2010.
Participants on the current trip include Amalgamated Research Inc., BioTracking LLC, Davisco Foods, the International Economic Summit Institute, the Idaho Potato Commission, the Idaho State Regional Center, Idaho Statesman, Idaho Timber Corp., Idaho Wheat Commission, Lamb Weston, Larsen Farms, Melaleuca, Oxyfresh, Premier Technology, Rocky Mountain Hardware, University of Idaho CALS, U.S. West Agriculture Exporters and Zions Bank.
Otter answered a few questions about the trip during a brief interview on June 1:
Q: Should more Idaho companies be exploring the possibility of exporting to China? What specific opportunities do you foresee ahead?
A: Everyone that makes a product in the state of Idaho could find a market in China. Obviously, the ag side has been big and the tech side. More and more, equipment is coming into play – mining equipment, container vessels, not unlike what is made over at the INL. Software systems have found a lot of favor over there.
Q: Are these trips a good use of taxpayer money?
A: Absolutely, when you see the $350-plus million that we’re selling in China today compared to years ago where we were selling nothing. We moved from $3 billion to $4 billion (in exports) in just a couple years. If we continue this trend in export sales, we’ll be at $5 billion for this year.
Q: Do you have any goals that we can hold you to upon your return?
A: You can hold me to this: I’m going to do my level best and participate with each and every one of these principals to take advantage of the opportunities over there. And I’ll report back and beg leave to return again.