Doing Business in Eurasia

By Hannah Copenheaver

On March 22, we hosted a roundtable discussion with the Mid-Atlantic Russian Business Council/Mid-Atlantic Eurasia Business Council in Harrisburg that addressed emerging business opportunities in the greater Eurasian region. 

A panel of experts discussed a variety of topics, ranging from legal, regulatory standards, and taxation, that influence the way Eurasian counties conduct business in their respective markets. 

Here is a brief overview of the speakers and their key points:

Ulf Schneider, Founder and Managing Partner, SCHNEIDER GROUP
- Eurasian Economic Union has 182.5M people, 20M sq km, and 14% of world's land. Key concepts include the free movement of goods, services, capital and people.
- Russia continues to be the largest country in the Eurasia region, with 146 million people and $1236 billion (USD) in GDP in 2015. Their GDP is ranked at #13 in the world. 
- According to the "Doing Business Report" (2016), Ukraine presents the most challenges in the region, especially in the categories construction permits, paying taxes and paying across boarders. 
- Kazakhstan presents new opportunities, as they recently joined the World Trade Organization (WTO) in 2015.
- In conclusion, Eurasia has a "diverse mix of different countries"click here to download the presentation

Siarhei Nahorny, Senior Counselor, Trade & Economic Affairs, Embassy of Belarus in the U.S.
- Belarus has 10 million people with $63 billion (USD) in GDP in 2015.
- The country is located in the "heart" of Eurasia, bordering Poland, Lithuania, Latvia, Russia and Ukraine.
- Belarus has 400 enterprises with US capital investments. The US invested $90M in the country last year alone.

Elena Liaskovskai, Director, International Tax Desk – Central & Eastern Europe & Russia, PwC
- Forming a LLC is the most frequent way for a US company to set up an entity in Russiaclick here to download the presentation

Jonathan Nelms, Partner, Baker & McKenzie

- One of the largest problems in the region continues to be corruption
- Jonathan reviewed the Foreign Corrupt Practices Act and its prohibited offenses, including anti-bribery, falsifying books and record keeping, and incorrect internal auditing controls.
- Some common red flags include over invoicing, unusual credits, requesting payment to a third country, extravagant gifts, among many others. Don't do it!
click here to download the presentation

James Thomas, Assistant Vice President, Sales & Marketing, ASTM International
- Suggested forming an MOU with the local partner company to signify that you are committed to the new relationship

Tina Weyant (WTC), Elena Liaskovskai (PwC), Siarhei Nahorny (Belarus Embassy), James Thomas (ASTM), Ulf Schneider (Schneider Group), Jonathan Nelms (Baker McKenzie), Val Kogan (MARBC), Lydia Sarson (German American Chamber), Hannah Copenheaver (WTC)

New York Toy Fair: A Must on The Trade Show Checklist

By WTC Guest Blogger Jessica Toutsis, RoomMates Décor

Last month thousands of vendors and buyers attended the New York Toy Fair to explore thousands of toys, games and youth entertainment products within a record-breaking 415,000 net square feet of exhibit space.

Not familiar with the New York Toy Fair? Produced by the Toy Industry Association™, Inc. (TIA), Toy Fair strives to work with businesses involved in creating and producing toys of all kinds to kids both young and old. A central meeting location for those all over the world, Toy Fair sheds insight on key trends in the industry and innovative consumer products that will hit the market in the year ahead.

For one business, RoomMates Decor, Toy Fair is a great opportunity to generate partnerships with international distributors of various countries to sell peel & stick wall decals where distribution in that country does not yet exist. Also a successful sounding board for countries’ retailers to be put in touch with distributors and establish facetime to discuss strategy and supply, Toy Fair benefits each type of attendee - vendor, retailer and distributor in one common space. 

With so many toys all in one place, it’s guaranteed to be an exciting trade show! If you weren’t able to attend this year, this is one trade show you don’t want to miss! Registration for Toy Fair 2017, taking place February 18 – 21, opens this fall. For more information, visit www.toyfairny.com.

Adam Say, International Sales Director and WTC Board Member, at the Toy Fair

 Jessica Toutsis is the Digital Marketing Manager for RoomMates Décor, headquartered in York, PA, and writes on trade show experiences for the World Trade Center blog. 

The Numbers of Trade: Why Exporting Adds Up

by: Hannah Copenheaver

This year for MANTEC's Business Growth Conference, Tina ran a breakout session called "The Numbers of Trade: Why Exporting Adds Up". In case you missed it, here is the run down of what happened during the session and why, in fact, exporting does "add up".

THE "NUMBERS OF TRADE" GAME

First, we wanted to get the room interacting. Often times, conference sessions can be a "death by PowerPoint" scenario... anyone who has ever presented is guilty of that, me included. When our attendees walked in, the first thing that they saw at their seats was a normal looking brown paper bag with a little notecard stapled on it that resembled a commercial invoice. Most were curious to know what was in the bag. Before we dove in to find out, we went around the room and had each attendee introduce themselves. This was a devised plan for the game because in order for the game to work, one must first get to know the other people in the room, just like you would get to know your potential customers before conducting business. 

Next, we found out what was in the bag! We opened the bag, inspected what was inside, and then assigned a personal dollar value to each item. We noted the values of each item on the commercial invoice notecard and added them up at the bottom of the bag. 

Here was my random assortment of goodies and what I personally valued each item:

• Travel-sized men's deodorant: $0 (no value, as I am female)
• Black licorice: $0 (yuck)
• Two pieces of candy: $0.50
• Peach teabag: $1 (I like this better than Green tea)
• Green teabag: $0.50
• Deck of cards: $0.50 (I have some at home already)
• Small box of Craisins: $0.50
• Andes mint chocolate bite: $0.25
• A snack sized bag of Nutter Butters: $1 
• Total = $4.25

Then, we all went around the room and traded items for goodies that meant more to us; goodies that we valued at a greater amount. I really like applesauce, so I was on the hunt for that. It is also cold season, so I wanted to make sure to trade something for a pack of tissues. I could have chosen to trade with the people sitting next to me (think: Canada and Mexico) or I could have walked to the opposite side of the room to trade with people far away (think: China and India). Some also did a 2 for 1 deal. Here are some pictures of our attendees conducting business. 

I think I did pretty well. I traded away things that had little or no value to me for things that I really wanted. I also kept a few things. Here is what I walked away with at the end of the game:

• Travel-sized women's deodorant: $1.50 (yes!)
• Travel-sized pack of tissues: $1
• Hazelnut coffee K-Cup: $2 (Someone who received this in their bag did not have a Keurig coffee maker)
• Two women's razors: $2
• Applesauce cup: $2
• Four pieces of assorted candy: $1
• Two Andes mint chocolate bites: $0.50 (I kept one and traded for a second one)
• Peach teabag: $1 (I kept this one)
• New Total = $11.00

As you can see, I was able to get things that I didn't have before by making a trade with other people. My value total also increased. We found that everyone in the room increased in their personal value totals by over 20%.  The majority of our participants increased their value between 50 - 75%, a few were over 100%,  and three "super traders" managed to increase the value of their bag by over 200% - like me. This is why trade matters! 

WHY EXPORTING ADDS UP

During Tina's presentation, she mentioned some very compelling reasons to export. Not only does exporting increase your overall sales, it also spreads your risk out, helps offset seasonal products, spurs your innovation, and diversifies your customer base. 

If that is not enough, here is the data to back up why exporting is beneficial to companies:

• 10% more value per worker
• 8.5% lower rate of failure than non-exporters
• 8% greater sales
• 6% higher wages
• 4% more capital
• Higher annual growth rates

The opportunities are also there for companies:

• 98% of exporters are small-medium sized enterprises
• 95% of consumers are outside the United States
• 70% of the purchasing power is outside the United States
• 58% of exporters export just to one country
• And there are 17 Free Trade Agreements to date

Right here in southcentral Pennsylvania, so many of our companies are exporting very successfully. In fact, in 2013 we were able to get amazing county-level data from Brookings Institute that showcased exactly how much the eight counties of our region exported in 2012 (click here to read our previous blog post):

• Goods and services exports totaled $14.5 billion, placing second to the Greater Philadelphia region
• This is over 20% of the State’s total exports from this year
• Included over 100 different types of products and services
• Sustained more than 60,000 jobs in the region

If you are curious to find out more, simply contact our office! We would love to share our knowledge with you. 

Click here to view the PDF file of this presentation 

Nuremberg: An Interactive Booth Is Key

By WTC Guest Blogger Jessica Toutsis, RoomMates Décor

Tradeshows require months of preparation including booth design, scheduling appointments with key customers, transporting all product and materials to the show, plus setting up the booth at the show. It is worth it, especially when you attend the world’s biggest toy fair in Germany and arrive back to tell your team “this was one of the best shows we’ve ever had.”

RoomMates Decor’s International Director of Sales, Adam Say, can certainly attest to that! RoomMates, the largest producer of Peel & Stick Decor and Wall Decals, sells to 75 countries around the world, and through Nuremberg was able to make contact with countries where distribution did not yet exist. Say, among many others at the show, connected with potential distributors, as well as licensing companies to discuss hot new products in the international markets.

“It was a great show to see the trends because all of the big toy manufacturers are there. We were also able to connect with new retailers and put them in touch with distributors around the world,” said Say.

One of the most memorable discussions Say revealed was discussion around the booth! “People talked a lot about how creative the booth was.” Say described that the booth featured true to size wall decals that popped out of the wall, which attracted the attention of buyers and even those who wouldn’t normally be interested in the product. Customers were encouraged to experience RoomMates wall decals firsthand by peeling and re-sticking them to the booth walls. 

A good booth display is key for attracting attendee’s attention, especially at a show like Nuremberg where interactivity and creativity are highlighted throughout the show floor. It’s tricky selecting which characters and products to feature in the booth when there are so many strong contenders. The characters that received the most attention? For RoomMates, the new Batman wall decals, Superman wall decals and Shopkins wall decals were very popular at the show, while Star Wars wall decals and Frozen wall decals continued to show strength in customer demand.

In addition to RoomMates, robots, dinosaurs, and puzzles were popular themes around the show floor as well as games for both kids and adults. Take a 70 second “virtual walk” around and discover more products and innovative toys on the market!

Jessica Toutsis is the Digital Marketing Manager for RoomMates Décor, headquartered in York, PA, and writes on trade show experiences for the World Trade Center blog. 

State of the Ports Address 2016

Posted by Emily Johnson, Intern

Last Thursday, we hosted our second annual State of the Ports Address. We had Dominic O’Brien from the Philadelphia Regional Port Authority and Marie Byers from the Harrisburg International Airport speak at the event.

The Philadelphia Regional Port Authority (PRPA) is located in the fifth largest metropolitan area in the United States. Something that you might not know is that the Philadelphia port is a global leader in food imports, which is due to their vast temperature controlled storage capacity. Additionally, the port has less congestion compared to other east coast ports, with a quick ship and truck turn times with multiple rail connections in the area. There are over 250 distribution centers that lie within the PRPA’s immediate hinterland. This year marks PRPA’s 6^th year of consecutive growth! 

The Philadelphia Port has exciting new updates to their port. They have been working on a channeling deepening project to allow for bigger ships to enter, which is influenced by the Panama Canal expansion. This is 80% complete and expected to be completed by 2017. They are doing upgrades on their Tioga Marine Terminal, Southport Marine Terminal Complex, and multiple other piers that they own. This will accommodate for bringing in more cargo to the port, which creates more jobs and more trade in the region. They also recently created a partnership with Sealand, which created a direct shipping line to Mexico. This new shipping line takes only six days for cargo to travel from Philadelphia to Veracruz. 

 

The Harrisburg International Airport (HIA) serves the central Pennsylvania region with residents who purchase nearly $1 million departing airline tickets annually. Something that you might not know is that the airport is actually a self-sustaining entity that does not rely on any state or federal subsidies to operate. Given this, HIA continues to provide growth to the central PA region, creating nearly $1 billion in economic activity. 

For passenger flights, Air Canada, Allegiant, American, Delta and United currently offers nonstop service to 11 destinations with connections worldwide. In 2015, an average of 3,290 passengers used the airport each day to fly domestically and 250 people used the airport each day fly internationally. The top five international destinations for 2015 included Toronto, Cancun, San Juan, London, and Shanghai. New this year, the airport is offering direct flights to Punta Gorda, Florida, and an all-inclusive vacation package to the Bahamas.

HIA ranks 76^th in the nation for cargo shipments, which is higher than airports such as San Jose, Oklahoma City, and Norfolk. At HIA, there is a FedEx hub for cargo coming from Williamsport and Scranton. UPS also recently built a “Hub in a Box” at HIA that created approximately 100 jobs and an expected $168,000 in new revenue each year. December 2015 was a record month for the airport with 5,722 tons of cargo flown to and from the region.

Although there have been some new challenges in the airport industry from mergers, low fuel prices, and less flights, the Harrisburg International Airport continues to make expansion and customer service their top priorities to deliver an altogether better flying experience. Looking to the future, Shaner Hotel Holdings will be developing a new hotel at the airport that will have 120 rooms, meeting spaces, a restaurant, and bar. This is to be open by 2017.  

Overall, the State of the Ports Address showed us how important logistics is to boosting trade in our region. It informed attendees of new growth that will help the local economy grow. For more details, please click here to download the Philadelphia Regional Port Authority presentation and click here to download the Harrisburg International Airport presentation.

For additional pictures from the event, click here to visit our Facebook album.