The region's businesses find an eager appetite for reaching the world with exports.
by Michael Puente
When Todd Cannon left the Air Force in 1999, still in his early 20s, he wasn't quite sure what he was going to do. He returned to his native Rolling Prairie, Indiana, to think things through.
“I thought I was going to have to leave Indiana to be successful in business. There wasn't much going on here,” Cannon tells Northwest Indiana Business Quarterly.
Four years after returning home, Cannon began working in the packaging business by opening up his own company APACKS, based in La Porte.
“The first few years, I went around this region basically knocking on doors, learning the market around the Midwest and Chicagoland. I sold machines for other manufactures and imported some machines from other countries to sell into this market,” Cannon says. “By 2006, I was kind of seeing the need in the market to manufacture machines myself because the customer wanted a machine that would perform up to their expectations and be more reliable than some of the machines imported from other markets. So, I kind of went out on a limb and started manufacturing machines out of my garage.”
It didn't take long for Cannon to outgrow his garage, so he began renting a larger space. But even that got too small very fast.
“In 2008 is when we bought some property, a building, and added on to the building. I began to hire engineers, service technicians and inside parts and services and sales,” Cannon says. “We kind of went through a fast growth phase that started in 2008 and it continues today.”
What's fueling APACKS growth is looking beyond the region for customers.
“Immediately after we began manufacturing our own products is when the exports took off,” Cannon says. “We don't import anything anymore. We manufacture in house or we integrate with other U.S. manufactures.”
With 25 employees, Cannon says he owes a lot of the company's success to PMMI, the Association for Packaging and Processing Technologies, which guided him in marketing his products overseas.
“They told me about what's going on in Mexico, Brazil and all these other emerging markets,” Cannon, 39, says. “That's where I really got my education.”
Cannon says while exports are less than 20 percent of his company's annual revenue, he believes that will change in the coming years.
“In the next five years, our revenue will be based on 60 percent of our revenue based on what the market intelligence is telling me and what other manufactures are seeing right now, too,” Cannon says. “I've been to Russia, Germany, Ukraine, Ireland and I've been to China five times to meet people to connect with. We have people on the ground who can communicate and sit down with a potential prospect.”
Cannon is one of a growing number of companies in Northwest Indiana that are looking overseas for new markets. He says places like China no longer scare him.
“They love Americans. When I went to China, they treated me like a king. They really did. They rolled out the red carpet,” Cannon says. “Right now, while we're not doing a lot in China, that's my next target. That will be a place where we will have offices, we will have people in China supporting our machines that are built in the U.S. but delivered and installed into the Chinese market.”
According to the U.S. Census Bureau, Canada is the number one country Indiana exports its goods to, 32 percent. The rest of the Top 10 include in order: Mexico, Japan, France, Germany, China, United Kingdom, Italy, Netherlands and Ireland.
What are the top products? Pharmaceuticals or other medical related fields, parts for motor vehicles, civilian aircrafts, engines and parts, and printed books, according to the U.S. Census Bureau.
That's why there's a renewed push by local leaders to get business owners to see the value in at least exploring the possibility of exporting to other countries.
“Our group just feels that Northwest Indiana has a very vital role in the global economy but doesn't realize it,” says Keith Kirkpatrick, vice president of membership for the Northwest Indiana World Trade Alliance and president of his own KPM Group Inc.
Kirkpatrick says Northwest Indiana's proximity to Chicago gives it a very distinct advantage over other areas of the state.
Another advantage is the region's diversity in ethnic groups.
“We have people living in this area from all parts of the world–Mexico, Eastern Europe, and many others. And many are first generation,” says Kirkpatrick, who is also host of the PBS show “Lakeshore Focus” on WYIN Lakeshore Public Media.
In addition, Kirkpatrick said Northwest Indiana attracts a few thousand international students and faculty to colleges and universities throughout the area.
The NWI World Trade Alliance, which started in 2015, is currently surveying how many companies in Northwest Indiana are actually exporting products to other countries.
“We need to raise the profile of international trade in our region,” Kirkpatrick says. “By doing that we feel that we will open the door to other businesses participating in that global marketplace. We need to change the attitude. We need to capitalize on it, not run from it.”
Joseph Gomeztagle says he knows there are many small businesses in Northwest Indiana that are doing business overseas but that it's not well known. Gomeztagle is a professor in the School of Public and Environmental Affairs at Indiana University Northwest in Gary. He is also founder of the Midwest Business and Economic Research Group LLC.
“We have several firms who aren't heard as much as the big steel companies. Smaller companies need to know there is plenty of opportunity in the global marketplace,” Gomeztagle says.
Gomeztagle says Northwest Indiana firms are experts on green technologies, which can be useful in other parts of the world.
“Reducing carbon monoxide, reducing pollution, going green,” Gomeztagle says. “Developing countries, like China, can use that. There are a lot of opportunities that Northwest Indiana companies are providing to other countries yet we haven't recognized those small companies.”
Andrew Reinke, president of the Indianapolis-based Foreign Targets Inc., says one of the biggest misconceptions is that foreign customers don't want or value American-made products.
“The world is very accepting of American-made products,” says Reinke, who also works with the Indiana Small Business Development Center (ISBDC). About 14 percent of the near $18-trillion U.S. economy comes from exports.
“That's the biggest percentage in the history of the United States,” Reinke says. ‘That's kind of a good indicator that American made goods are sought after in the world.”
Through the ISBDC, Reinke develops seminars and other presentations to assist firms in how to get into the global market.
“Most people don't know what the regulations are. They may not know how much it would be to transport their product overseas or find a distributor,” Reinke says.
About 10 percent of Indiana's $318 billion Gross Domestic Product in 2015 came from exports. Reinke says compared to other states, Indiana businesses should be doing more sales overseas.
In Northwest Indiana, most think of petroleum products and steel as this region's main exports. But would you also think of firefighting equipment?
For four decades, Task Force Tips has been the industry standard for firefighting nozzles. The company was founded by Clyde McMillan in 1971 in Valparaiso. He was working with the Gary Fire Task Force when he came up with the idea of an automatic nozzle, which he drew on a napkin.
The company now employs 250 workers at its 168,000-square-foot headquarters in Valparaiso. The company is now run by McMillan's son, Stewart, who oversees its 4,000 combinations of products.
“I never thought the company would grow to be this big,” Stewart McMillan says. “About 40 percent of our sales come from outside the United States.”
McMillan says his products are being used in the Middle East, China, Japan and South America. The company's exporting began to develop in 1985 when he met a man from France at a trade show. The man eventually acted as an intermediary for Task Force Tips to enter the French market.
“People are afraid of exporting because of the complexities. It's not that difficult once they figure out how to handle it,” McMillan says.
McMillan also says Indiana firms need not worry about not speaking Chinese, French or Spanish to get their products overseas. “Remember, there are more Chinese people who speak English than there are Americans,” McMillan says. “We're very fortunate that English is the standard language. The language of business.”
Another advantage companies in Northwest Indiana have is O'Hare International Airport in Chicago. “O'Hare is sitting right here. I just went to Italy for a day to meet with a client,” McMillan says.
APACKS owner Todd Cannon agrees that Northwest Indiana's proximity to Chicago makes all the difference in the world.
“I think Northwest Indiana is the best place in the world. I really do,” Cannon says. “It doesn't matter where the customer is at. If I need to get on an airplane, or my service tech needs to get on an airplane or we need to get people out to do an instillation, we can be anywhere in the world within 24 hours since we're only 90 minutes away from O'Hare.”
In 2015, Cannon was awarded the Small Business Exporter of the Year for Manufacturing by the Northwest Indiana ISBDC at its 24th annual Entrepreneurial Excellence Awards (E-Day).
For more information on connecting to global markets, contact the Indiana Small Business Development Center at www.isbdc.org.