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Global markets key to manufacturing growth

Area companies that sell products internationally may have an easier time pulling out of the recession because many developing markets are consuming goods and components faster than more established markets in the United States.

“The Chinese, for instance, have a red hot economy,” said James Nelson, vice president of the Illinois Manufacturers' Association. “Their GDP is generally about 9 percent while ours is between 0.5 and 1 percent.”

So companies that sell products in China can take part in that economic boom, as long as they can get their goods to market at a reasonable cost and still make a profit, Nelson said.

Area companies realize China and other countries are key to growth.

Dresser Inc., a manufacturer of highly-engineered products for the natural gas and oil industries, recently said from its Elk Grove Village manufacturing facility that it received a large order to supply anti-surge valves for China's West-East natural gas pipeline.

Dresser sells products to companies and countries around the world. It has a sales presence in more than 150 countries and manufactures products both domestically and strategically worldwide.

Global product manager Greg Giernoth estimates 60 percent of sales at Dresser are domestic and 40 percent international.

“Within Dresser, there are about 10 different product lines, manufactured in plants in five different states,” Giernoth said. “Other products from other facilities have been sold to China before, but this is the first Chinese sale out of the Elk Grove plant.”

In fact, Dresser has even recruited a team of Chinese nationals with the necessary expertise to apply and support their oil and gas pipeline products.

“We follow the oil and gas industry and right now China is the big boom country,” he said. “Fortunately, for high-performance products, the Chinese prefer to buy items made in the European Union or the United States.”

Giernoth said sales overseas, as well as the resilient nature of the natural gas industry, have helped mitigate the effect of the current economic downturn on Dresser. The company saw minimal staff reductions and business is picking up very slowly.

Janice Christiansen, president of JC Schultz/The FlagSource in Batavia, is also looking abroad to expand the custom banner portion of her business.

“The president is encouraging businesses to look to overseas markets and the Illinois Department of Commerce and Economic Opportunity offers help, so we are exploring the idea of setting up distributorships overseas,” she said.

And the effort helps her business plan.

“People want flags made in the country of origin, so we wouldn't be making foreign flags,” Christiansen said. “We would produce banners and flags for companies and events.”

To facilitate the expansion, the company recently purchased a new 60-foot embroidery machine.

Thanks to the weakened dollar, the conditions for exports are good, said Ron Bullock, chairman and owner of Bison Gear and Engineering in St. Charles. In fact, his company's production levels are coming close to where they were in 2008, and Bison Gear is hiring again.

“Fifteen to 20 percent of the jobs at Bison Gear are related either directly or indirectly to export sales,” Bullock said. “So it is important that we make progress on trade agreements and improve our policies related to exports.”

The United States now makes up only 30 percent of the world's total economic activity, so there are more markets abroad than there are domestically, Bullock said.

“We are now in a global economy in which other countries like China are buying more and more gears, and we are taking advantage of those opportunities.”

Global competition forces companies to innovate, and since Bison Gear has continued to invest in its U.S. operations, the company has become more agile and able to protect its home markets, Bullock said.

JC Schultz/The FlagSource in Batavia recently purchased new equipment to help grow its company abroad. Courtesy JC Schultz