Idaho business development team heads to Japan

Idaho will send five representatives to Japan later this month to encourage foreign direct investment by Japanese companies in the state.

Participants include Kelly Anthon, Rupert city administrator and state senator; Jan Rogers, CEO of Regional Economic Development Corp. for Eastern Idaho; Bobbi-Jo Meuleman, director of the Idaho Department of Commerce; Celia Gould, director of the state’s Agriculture Department; and Marc Skinner, executive officer of the southeastern region for the University of Idaho.

The trip, which is scheduled from April 13 through April 18, is in two parts, Rogers said. In the first part, just Rogers, Anthon, and Skinner will visit the Idaho Falls sister city of Tokai-Mura, where they’ll meet with leaders from agricultural companies and the university there. In the second part, from April 16 to 18,  Meuleman and Gould will join the other three and visit Sakae Casting in Tokyo and other companies. Travel, and the first portion of the trip, will be paid for by the participants’ respective organizations.

Sakae will host the delegation’s lodging and meals for the second portion of the trip. Sakae specializes in castings for inserting stainless steel pipes into an aluminum casting product necessary for optimal performance of semiconductors and supercomputers. It recently opened an office in Idaho Falls, a process that began when Sakae CEO Takashi Suzuki visited Idaho Falls in March 2016 on a sister city visit with other business executives. At Idaho’s suggestion, the company later attended the SelectUSA Investment Summit in Washington, D.C. in June 2016, where the state was exhibiting.

Anthon, who speaks Japanese, played a pivotal role in forging the relationship with Sakae, even though the company wasn’t planning to visit the Magic Valley, said Connie Stopher, executive director of the Southern Idaho Economic Development Organization, or SIEDO. “He participates in a lot of our economic development activities, and he just happened to be going,” she said. “He didn’t go because they were making a connection; he was just ready on deck.”

“I’d done business in Japan,” Anthon said. “Especially the small and midsize businesses, they don’t go out on their own and go overseas.” But the owner of Sakae Casting realized that when a business’ market is exhausted domestically, it’s important to look at foreign markets for expansion, he said.

Foreign direct investment, or FDI, is a relatively recent focus of the Idaho Department of Commerce. Most recently, the state sent 27 economic development professionals, including Lt. Gov. Brad Little and U.S. Sen. Jim Risch, to the SelectUSA Investment Summit in Washington, D.C., in June. Idaho, which was attending the event for the fourth time, was a second-year Diamond-level sponsor, the highest level.

The first such investment was Frulact, a Portuguese fruit processing company looking to site a new factory in Idaho. Frulact makes the fruit that goes in yogurt, and it was attracted by the Chobani plant in Twin Falls, Anthon said. The company, which first announced its intentions in 2013, has bought property but hasn’t yet built its factory, he said. However, though it has since built a facility in Canada, it still intends to build its first U.S. facility in Rupert, Rogers said.

“Everyone had the light bulb turn on,” Anthon said. “Idaho generally – this is not a criticism – didn’t realize the full potential of attracting foreign direct investment. The Frulact project really opened our eyes to that.”

In addition to Sakae and Frulact, other FDI projects in Idaho include Ohzen Precision Machining Cutting, a Japanese company setting up shop in Idaho Falls to make titanium after-market parts for Harley-Davidson motorcycles and a partner of Sakae; and McCain Foods, a Canadian food processing company with a facility in Burley.

This is all happening as FDI is actually dropping. A.T. Kearney, a global management consulting firm, said the U.S. was the top-ranked FDI destination in its 2017 A.T. Kearney Foreign Direct Investment Confidence Index report. But the United Nations Conference on Trade and Development Global Investment Trends Monitor earlier this year said that global FDI had dropped by 16 percent in 2017, which the organization attributed to elevated geopolitical risks and policy uncertainty, as well as U.S. tax reforms.

In November, the Idaho Department of Commerce awarded a nearly $238,000 Idaho Global Entrepreneurial Mission (IGEM) grant to the University of Idaho, Boise State University, and the Center for Advanced Energy Studies to partner with Sakae Casting on research and development on spent nuclear fuel storage and cooling capabilities, according to a blog post written by Lisa Buddecke, a marketing consultant for Regional Economic Development for Eastern Idaho.