Increase exports a common goal for Wichita-area businesses

09/22/2013 12:00 AM

09/21/2013 3:09 PM

Bob Bunting and Karyn Page share a common goal: increase exports from Kansas businesses.

Bunting, president and owner of Bunting Magnetics in Newton, said 30 percent of his company’s sales are international.

“At the end of my career, I want 50 percent of Bunting Group’s sales to be international,” said Bunting, whose company manufactures and sells magnet products for the food, pharmaceutical, print, chemical, plastics and tool and die industries.

And Page, president and CEO of Kansas Global Trade Services, thinks boosting exports will benefit Wichita.

“The Wichita economy is dependent on exports,” she said, noting that more than a quarter of the local economy is fueled by exported goods and services. “What if we could grow more of these companies (that export)?”

On Tuesday, the Brookings Institution released its Export Nation 2013 report, in which it said that the Wichita area ranked third among the nation’s 100 largest metros for exports as a share of total metro output. Yet among the dollar value of exports, the area ranks 47th among the top 100 metros, at $7.7billion.

The report said U.S. exports accounted for 54 percent of the post-recession output growth in the 100 largest metros. But, the report said, two-thirds of those metros underperformed the U.S. as a whole on export intensity, “suggesting that there is significant potential for the expansion of exports at the metro level.”

While planemakers have long been – by far – the biggest contributor to exports for the state and locally, other manufacturers and businesses are adding to what Kansas has to offer overseas markets. And while most people tend to think of large companies as being the ones that export products and parts, more and more small and mid-size companies also are working globally.

Page thinks a strategic exporting plan for the area could turn Wichita’s slow-growth, post-recession economy into something much bigger, ultimately improving its fortunes.

“We would like to see the area develop an export strategy,” she said. “We would love for there to be consensus on that.”

“What would happen if more (companies) were aware of the opportunities (from exporting), had access to resources and made a decision like Bob Bunting?”

Bunting Magnetics and BG Products are two Wichita-area companies that have export strategies in place, and say they are key to their futures.

Bottom-line improvement

Bunting said while the company has sold overseas for decades, it was only a few years ago that the company developed a strategic plan to grow its international business, which Bunting estimates accounts for a third of all its overall business.

What prompted the development of a specific international strategy goes back to September 1993, when Bob Bunting was named president of the company that his father originally founded in Chicago.

“I had specific things I wanted to accomplish and you can tie them to sales growth,” Bunting said.

To achieve the sales growth for which Bunting aimed would eventually require tapping more markets, such as Europe.

To really get a hold on those markets, Bunting said he felt the company needed to have a building there and people who were from there. That was accomplished in 2008, when Bunting acquired Magnet Applications in the United Kingdom.

“When we had an opportunity to talk to somebody about acquiring their company, it just made sense,” he said.

The Magnet Applications acquisition was followed four years later by the acquisition of E-Magnets UK Ltd., also in the U.K.

Both acquired companies are now part of Bunting Magnetics Europe.

“It’s really turned out wonderful,” Bunting said. “It’s made a major improvement on the bottom line.”’

He said having manufacturing operations in the U.K. is more cost-effective in serving the European market than exporting products from Newton or its other plants in Chicago and Pennsylvania. Bunting employs about 130 people in Newton and 200 companywide.

“From our standpoint, if you’re not manufacturing with the European Union, you are probably not going to be doing well,” he said. “You’ve got freight (costs). You’ve got taxes, additional costs that if you are in Europe you don’t have.”

If he could, he’d have manufacturing and sales operations in more countries and continents. “(But) you can’t carry that on to every country because there’s a limitation to resources,” Bunting said.

Bunting added that the company’s Newton operations exports products to other countries using networks of distributors. Just last week Bunting said he was in Dubai at a trade show for manufacturers of beverage cans. “Emerging nations is where your big growth is,” he said.

‘Tremendous potential’

For BG Products, exports are an important part of its future.

BG’s exporting began with the company’s inception 41 years ago, starting with Canada. Today the Wichita-based manufacturer of automotive fluid maintenance products and services exports to 66 countries, said Steve Shaad, BG’s market manager for international trade operations.

Unlike Bunting, BG has no plants overseas. It does have a warehouse in the Netherlands. All of its products are manufactured and exported from its Wichita and El Dorado facilities, which combined employ about 185 people.

It uses distributors to get its products to the end user, who are automotive dealers, independent mechanics and vehicle fleets. “The distributors are basically responsible for the freight from the time it leaves the states … to the customer,” Shaad said. “They are responsible for their own import fees, duties and taxes.”

Shaad said BG’s newest export countries are Barbados and Peru.

Shaad said while BG expects to continue its domestic sales growth, it likely won’t be anywhere near the level of the growth it can achieve outside the U.S. Even though its products are in scores of countries and on every continent – “except Antarctica,” he said – not all of its product lines are.

“Not only is (exporting) 20 percent of our business, it has the potential to be much greater,” Shaad said. “We’re just scratching the surface in Europe, where they have more automobiles than the U.S., and China, where they have more automobiles than the U.S. …We have tremendous potential for growth on the export side.”

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