Last updated: February 16. 2013 3:44PM - 139 Views

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When Cornell Iron Works looks for future growth, its gaze shifts overseas.


"We're not going to make substantial market share gains domestically," said Mike Simon, director of international sales for the company that makes metal safety and security doors. "If we're going to grow, it has to come from outside the United States."


Powered by companies like Cornell, exports as a share of economic activity in the Wilkes-Barre/Scranton region have grown steadily, according to a recent study by economic research firm IHS Global Insight.


The U.S. Metro Economies report, released in July, estimated exports rose from 3.7 percent of gross metropolitan product in 2005 to 8 percent in 2010.


That made exports a larger share of the economy in the area comprised of Luzerne, Lackawanna and Wyoming counties than in places like Boston and Philadelphia, the report said.


As exports have grown, so has the region's ranking among the 363 metro areas studied. In the decade between 2001 and 2011, IHS said growth averaged 3 percent per year in the Wilkes-Barre/Scranton region, ranking it 278th. While the rate slowed throughout the nation as a result of the Great Recession, the local estimate for 2012 matches the 1.8 percent projected for all metro areas.


Another recent report, "Export Nation 2012" by the Brookings Institution, gave the region even higher status, ranking it 60th in export sales as share of metropolitan product and 88th in exports growth from 2008-10.


Help available

Mike Horvath, international business development manager at NEPA Alliance in Pittston, said he's seen more small businesses express interest in exporting.


He recently helped arrange an exhibit by five Pennsylvania companies, including Acton Technologies of Jenkins Township, at Eurosatory 2012, a major trade show for defense and security products and services held in Paris.


"All five said the show was great … and they see potential down the road," Horvath said.


Other participants from the NEPA Alliance seven-county coverage region were Gentex Corp., Simpson, Lackawanna County, and Megaphase LLC, Stroudsburg, Monroe County.


In addition to trade missions, NEPA Alliance hosts annual gatherings with Pennsylvania's international trade advisors, where local companies can speak directly with advisors to specific nations and regions.


The next "Bringing the World to Pennsylvania" is scheduled for Sept. 21 at the Woodlands Inn & Resort in Plains Township.


Last year 31 companies attended, Horvath said, but he'd like to see at least 40.


The mix of participating businesses and popular markets changes each year, he said, along with economic conditions. For example, two years ago there was a lot of interest in Singapore, but not much last year.


Cornell Iron Works' focus has been on less developed nations where local competitors are fewer or less capable.


"Right now we're doing a very strong business in the Middle East and our Latin America business is growing nicely," he said.


"There are competitors virtually in every market; some are very competent, some aren't," Simon said. Cornell has avoided Europe, where local companies offer high quality, "so we can't compete favorably there."


Middle East contract

The Middle East is the source of a recent large contract to provide rolling security grilles for the new Doha International Airport in Qatar. The enormous complex will include more than 400,000 square feet of retail store space, among other security needs.


"It's a huge, huge project," Simon said.


All of Cornell's products are made in the United States, either at its plant in the Crestwood Industrial Park in Wright Township or at plants in North Carolina and Arizona that came with the 2008 acquisition of The Cookson Company. Because of the cost to ship the heavy products, Cornell does not tailor them to individual markets.


"We've been most successful working with North American architects who specify North American products," Simon said.


Soft goods sell, too

The report found chemical and plastics manufacturing was a leading export industry, and the Scranton/Wilkes-Barre area fared even better there, ranking 79th. But local companies also are shipping consumer products and other "soft" goods outside the United States.


For American Silk in Plains Township, exports have made up a steady 8-12 percent of production in recent years.


The company sells bulk fabric to furniture manufacturers. "We go to shows overseas" and have foreign sales representatives, said Jim Harowicz, chief financial officer. "Mike (Horvath) helps us out" on trade show visits.


The Brookings report listed paper products as the region's top export category. One of the largest producers in the nation, Procter & Gamble in Mehoopany, contributed to the total.


"We've shipped paper products for a long time to Canada," said Alex Fried, a spokesman for the plant. That's because the Wyoming County plant is the closest P&G facility to Canada, as well as much of the eastern United States.


Given the expense of shipping light but bulky products like Pampers diapers and Bounty towels long distances, Procter & Gamble's approach is to produce them close to their final market.


So while testing a more distant new market they may ship from the Mehoopany plant, but if the company decides there's strong demand, "at that point we're going to put a plant on the ground," Fried said.


Import help, too

There are incentives for companies that import into the Wilkes-Barre/Scranton region. Close to 900 acres in Mericle Development's CenterPoint Commerce and Trade Park is designated as Foreign Trade Zone. That allows companies to reduce and postpone the payment of duties on components originating outside the United States. If the finished product is exported, no duties are collected.


While the advantage exists, Mericle spokesman Jim Cummings said he was not aware of any park occupants using it.



Ron Bartizek, Times Leader business editor, may be reached at rbartizek@timesleader.com or 570-970-7157.

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