An Optimistic Outlook

Diversity of industries helps trade amid economic uncertainties.

Georgia was on a lot of people’s minds in 2022 as companies and countries jockeyed to find the best markets for their goods and the best sources for their supplies. The result was a record $196 billion in the state’s total trade, up 18% from 2021. The total includes exports and imports and involved transactions in 221 countries and territories – a sign of the ingenuity that companies and state government put into reaching new markets.

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Enforcement Arm: Rhett Willis, president and CEO of Savannah- headquartered D.J. Powers, at Georgia Ports Authority; photo Frank Fortune.

Exports from Georgia exceeded $47 billion in 2022. Exports of Georgia’s top commodities rose in 2022 compared to 2021, except for motor vehicles which dropped due to supply chain problems. The leading exports were civilian aircraft and parts, motor vehicles, chemical woodpulp, engines and gas turbines, poultry, cotton, medical instruments, kraft paper and paperboard, data processing equipment and telephones.

Canada, as usual, was Georgia’s top export market. Mexico came in second, switching third place with China. The rest of the top 10 were Germany, Singapore, India (which leapfrogged from eighth place to sixth), Japan, the Netherlands, the United Kingdom and the United Arab Emirates, which edged out South Korea.

China, however, continued to dominate on the import side, shipping almost $149 billion of goods to Georgia – a 20.3% increase from 2021. Imports from Vietnam, India and Thailand continued their upward trend.

“Overall, I’m really bullish for the state,” says Mary Waters, deputy commissioner for trade in the Georgia Department of Economic Development (GDEcD).

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Building Relationship: Mary Waters, deputy commissioner for trade in the Georgia Department of Economic Development, addresses the Southeast-U.S.-Canadian Provinces Conference in 2022, above and conference participants converse, below

She cites three reasons for her optimism: the diversity of Georgia’s industrial base; its long-standing partnerships, especially with the consular corps, that continue to build momentum; and the proactive stance of Georgia companies toward foreign trade. “They are not standing on the sidelines; they understand the need to be seeking international customers.”

She believes the diversity of Georgia’s industries enables trade to withstand economic uncertainties and the vagaries of geopolitics. “We have strong relationships across the world that companies can lean on. Much of what we consider success is long-term trends, not one- or two-year events,” Waters says. “On the export side we may not set records every year, but our companies are globally minded to be looking to global markets to diversify their revenue stream.”

Exporting Goods and Services

Waters says components of Georgia’s exports like durable goods have returned to pre-pandemic levels and are above where they were in 2019. However, service exports like international travel and the number of international students who come to study at Georgia’s colleges and universities are still lagging pre-COVID levels, she says.

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(Right) Supply Chain: Vehicles are unloaded from a RoRo vessel at the Georgia Ports Authority’s Colonel’s Island Terminal; photo contributed.

Atlanta-based Chick-fil-A’s plans to invest $1 billion to open restaurants in Europe and Asia by 2026 will bolster Georgia’s services exports. It plans locations in five international markets by 2030, in addition to its existing restaurants in Canada and Puerto Rico, CEO Andrew Cathy told The Wall Street Journal. Cathy said an international presence is necessary as the family-owned business charts its future.

Another rapidly growing service export is fintech. The Technology Association of Georgia (TAG) estimates that Georgia’s 210 fintech companies, employing 42,000 people, supported $300 billion in global payments transactions in 2022.

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Supply Chain: Georgia Ports Authority’s Colonel’s Island Terminal and Gulfstream; photo contributed.

Waters credits the many small and medium-sized (SME) businesses that have ventured into world markets for much of Georgia’s export success. According to the U.S. International Trade Administration (ITA), 87% of the 10,374 Georgia companies that exported products in 2020 were SMEs.

What makes it all work? Georgia, the federal government and even the private sector have deployed an army of resources to encourage and help small businesses find buyers in the big world out there.

Home base for the effort is Georgia’s DEcD. In addition to state officials and staff, the department’s work is enhanced by a network of international representatives under contract with the department in 12 regions: Brazil, Canada, Chile, China, Colombia, Europe, Israel, Japan, Korea, Mexico, Peru and the United Kingdom. These markets accounted for 52% of Georgia’s exports and 57% of total trade in 2022.

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Proactive Plan: Small Business Development Center Director Darrel Hulsey; photo contributed.

The state also offers programs to help prospective exporters find out what is needed to take on foreign markets, determine their readiness and get their ducks in a row before dipping into unknown waters. The University of Georgia Small Business Development Center’s (SBDC) International Trade Center offers these services to established businesses, and its consulting services are free.

In addition, the SBDC’s flagship Export Georgia program, in collaboration with UGA’s Terry College of Business and other partners, offers companies a four-month, one-day-a-month crash course in exporting. Companies are also linked to Terry interns who can help them with research and other matters. The cost is $650 per company, and when completed, they leave with a proactive export plan, says SBDC Director Darrel Hulsey.

Hulsey says supply chain challenges, while not completely resolved, are improving, and costs are coming down. Despite the turmoil in the banking sector, banks are still offering loans, as are nontraditional financial institutions that are willing to consider factors like accounts receivable, based on the financial strength of the borrower.

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Growing Business: John Woodward, the Metro Atlanta Chamber’s vice president for global commerce; photo contributed.

Federal agencies like the U.S. Small Business Administration (SBA), ExIm Bank (Export-Import Bank) and U.S. Commercial Service are also active in promoting exports from Georgia, whether through educational programs or funding. In particular, ExIm Bank offers financial assistance in the form of loans, loan guarantees and insurance. From 2021 through April 2023, ExIm helped 50 Georgia companies – many of them small and medium-sized – export goods valued at $847 million by providing $364 million to support insured shipments, guaranteed credit or disbursed loans.

The private sector has also stepped up to help small companies reach foreign markets. The Metro Atlanta Chamber’s annual Metro Export Challenge, launched in 2016, has, to date, made available $730,000 in grants for export development to 129 Challenge winners from the 29-county metro area who meet certain criteria. Minority, women and veteran-owned businesses are a particular focus.

“When an Atlanta-based company grows internationally, it is also growing its business in Metro Atlanta,” says John Woodward, the Chamber’s vice president for global commerce.

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Check presentation for pitch day event for the chamber’s annual Metro Export Challenge; photos contributed.

Women are also the focus of a one-day hybrid event, Women Export University. Sponsored by UPS and the Atlanta Mayor’s Office of International & Immigrant Affairs-Welcoming Atlanta, it aims to encourage women-owned businesses to export, in partnership with the Russell Innovation Center for Entrepreneurs, a business generator that serves Black entrepreneurs in Metro Atlanta.

Under a strategic partnership between Amazon and the U.S. International Trade Administration focused on small and medium-sized businesses, ITA will offer guidance, information and resources for exporters, while Amazon will train them to use the internet to reach customers in 21 countries where Amazon Global Selling is available.

“Public-private partnerships, just like this, are an important part of promoting U.S. small businesses and growing the U.S. economy,” Brian Huseman, vice president of public policy at Amazon stated in a press release. “Together, we can empower more U.S. entrepreneurs to find new customers for their products and grow their business online.”

Small Companies, Big Success

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Developing Treatments: John Mitchell, CEO of Athens Research and Technology; photo Brett Szczepanski.

Two years into his job as CEO of Athens Research and Technology (ART), John Mitchell is still impressed by the variety of resources Georgia offers companies.

“We get more help and support in this state than anywhere else I have worked,” he says. “Our international sales went up 39% in 12 months, and that’s because of both local and state resources.”

Named small company Exporter of the Year for 2022 by GDEcD, ART purifies critical proteins, from both human and animal sources, for use by researchers to better understand disease and develop new treatments, Mitchell explains. Proteins are found in blood and plasma, which may contain hundreds of proteins. Researchers seek particular proteins which ART is able to identify, extract and purify at scale.

The company was founded in 1986 by noted UGA biochemist James Travis and three local pathologists. It began shipping internationally almost before it was established, Mitchell says. It has 22 employees (soon to be 28) and now ships directly to some 30 countries and has distributors in others. Mitchell credits the more than 1,500 research papers over the past 10 years that have named ART as their source of proteins for helping to spread the word about the company.

Another small company that has found success globally is Kennesaw-based Valtorc International, a major supplier in the industrial control and valve market. Founded in 1980, Valtorc supplies a wide range of industries including chemical, pharmaceutical, food, oil and gas from its 40,000-square-foot facility. Valves cost anywhere from $10 to $100,000 apiece, depending on their use.

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The Team at ART fulfilling custom protein orders for clients (above and below); photos contributed.

When Valtorc decided to test world markets for its products, it sent out email ads to potential customers – a strategy that worked. It now exports its valves to 70 countries, and global trade has become an important part of its business, President AJ Bental says. Valtorc won a 2022 Globe Award from GDEcD for its exports.

“It takes a while to get established, to build distribution networks and the customer base, but now we have requests from every part of the world,” Bental says.

The company has 20 employees. “It doesn’t take a lot because we are very streamlined. We use a lot of machinery and robotics,” he says.

Bental sees opportunities for the company to do work for the military and for space companies like Blue Origin and SpaceX, as well as the electric vehicle market. Bental says Valtorc recently completed a big project in Tesla’s Texas Gigafactory.

“We are the No. 1 valve company that has been awarded a contract by Tesla. We are spec’d in [specified] and once that happens, that is the only brand they want,” says Bental.

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Award-Winning Company: Valtorc International President AJ Bental; photo Ben Rollins.

Agriculture Exports Soar

As always, agriculture and forestry were big contributors to Georgia’s export success. According to GDEcD, they totaled $5.8 billion in 2022, up 21% from 2021 and the highest value since 2014 – propelled largely by a 71% rise in cotton and a 26% rise in poultry sales. Georgia’s biggest markets were China, Canada, Mexico, Pakistan and Turkey.

The abundance of Georgia’s farm products has also created opportunities for companies to trade them globally. One of them is Woodstock-based Trans Globe LLC, which was named the SBA’s Georgia District Office 2023 Exporter of the Year. The agency praised founder Diaa Ghaly for “your ability to quickly grow your exporting footprint to 42 countries on multiple continents and become an ambassador for U.S. partners and agribusiness processors in five years.”

Ghaly came to Atlanta with an extensive background in agribusiness trading in his native country, Egypt. He already had an MBA from Georgia State University under his belt, one factor in his decision to settle in Georgia, coupled with its diversity and opportunities. He attributes his success to word of mouth, ensuring product quality and customer service.

The company’s lines of business are animal feed, food and forestry, especially Southern yellow pine. Within each category, there is a wide range of products.

“We try to work with farmers, producers and processors all over the world and link them to end-users,” Ghaly says. “We believe in offering value to both customers and producers. We try to be a one-stop shop for our customers. They can find everything they need in our product range.”

According to Ghaly, Trans Globe can also assist farmers and producers with access to financing and supply chain integration, including storage and transportation. The company offers help in becoming more efficient and solving problems, and it provides technical support free of charge. “We want to differentiate ourselves in the market,” Ghaly says.

Once the deals have been struck and transactions concluded, it is time to turn to a sometimes overlooked business community – the freight forwarders and customs brokers who are the cogs in the world’s trading system that keep it going. Rhett Willis, president and CEO of Savannah-headquartered DJ Powers, is one of them. Customs brokers clear inbound cargo for importation. Freight forwarders handle outbound, he explains.

DJ Powers does both. The company has eight offices in the U.S. and one in Rotterdam, as well as representative offices in Shanghai, Ningbo and Shenzhen, China. It was recently acquired by Canada’s Russell A. Farrow Ltd., which Willis says gives each company access to the other’s resources and clients.

Willis’ job means keeping up with complex and often changing regulatory requirements, the rules governing free trade agreements, tariffs and anti-dumping requirements.

“You need a licensed customs broker to import goods,” Willis notes. “We are the enforcement arm for U.S. customs to make sure our clients are following the rules, submitting the proper paperwork, and the classifications for customs are correct.”

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Agribusiness Ambassador: Diaa Ghaly, founder of Woodstock-based Trans Globe LLC; photo Kevin Garrett

On the export side, businesses need to take note of export regulations. “The government needs to know what you ship, where you ship and to whom you ship,” Willis says.

The final stage in the export process is transporting finished products out of the state. The Ports of Savannah and Brunswick are the gateways to the world for many of them. In FY 2021, furniture was the top import commodity for Savannah, with imports growing from India, Indonesia and Taiwan. Top exports included forest products, kaolin clay and automotive cargo. In FY 2023, Georgia ports’ share of U.S. container trade rose to 11.4% of the U.S. total.

Hartsfield-Jackson Atlanta International Airport, ranked the USA’s 13th busiest air cargo airport by Airports Council International, is another asset for Georgia. It experienced an almost 5% increase in international outbound freight between 2021 and 2022 though imports were down.

The uncertain state of the world economy could affect Georgia’s trade in the coming year. But its underpinnings and resiliency are strong and will very likely remain so.

Categories: Economic Development Around The State, Features