Pennsylvania Gov. Corbett leads trade group to Brazil
April 8, 2013 8:00 AM
Sao Paulo, population 11 million, is the first stop on governor's trade mission to South America.
By Karen Langley Pittsburgh Post-Gazette
SAO PAULO, Brazil -- Seeking untapped markets and fresh investment, a delegation of Pennsylvania officials and business leaders flew south this weekend to the largest city in South America, where the group prepared for meeting after meeting with counterparts here and then, across the continent, in Chile.
Through sessions with executives and dignitaries in both countries, Gov. Tom Corbett and representatives of businesses and development groups will try to guide new investments to Pennsylvania and pave the way for exports. Mr. Corbett, on his second overseas mission after a trip last year to France and Germany, is scheduled to visit the governors of Sao Paulo and, northeast along the coast, Rio de Janeiro, before meeting next week with President Sebastian Pinera of Chile.
Before an initial reception with the delegation, Mr. Corbett mingled in the lobby of the delegation's hotel off the Avenida Paulista, an iconic avenue in this city whose population nears that of Pennsylvania. Sipping a Corona and wearing a golf shirt on the day before the mission begins in earnest, the governor said he expects to develop relationships that could lead to economic growth at home.
"We're competing with the other states in the country," he said. "If we stayed at home and didn't come here -- tried to do it by phone or just did it with our trade representative here -- then they'd think we weren't really that interested."
When "the governor shows up, they know we're very interested," he continued. "That's a sign of respect."
Pennsylvania governors for years have led economic missions abroad. Ed Rendell traveled to Spain and the United Kingdom to promote investment in the state. Mark Schweiker went to Australia and Japan. Tom Ridge headed missions to a host of countries, including Chile and Brazil, as well as Israel, Japan and several European nations.
"The state sort of gives an umbrella of legitimacy," said C. Alan Walker, secretary of the Department of Community & Economic Development. "It's the way most business is done in those parts of the world.
"When you have the governor of the state of Pennsylvania traveling with you, it gives your delegation real legitimacy they wouldn't have if they were traveling on their own."
On this mission, as in Mr. Corbett's first, the expenses of the state delegation -- which includes Cabinet secretaries, staff and first lady Susan Corbett -- will be paid by Team Pennsylvania Foundation, a nonprofit that works with government and businesses to promote economic growth. As state budget pressures continue, administration officials say donations are the best way to pay for missions dedicated to helping business.
The mission Mr. Corbett led last year to Europe generated potential trade and actual investment, according to the DCED. The seven companies, fewer than the 18 participating this year, reported that the trip generated 35 leads and seven agreements now under consideration.
Efforts to attract investment already materialized in one case, with Hydrotechnik, a German manufacturer, signing a lease in Sewickley. The project will yield 15 jobs, according to the state. All told, the delegation met with 335 investment prospects, which generated at least 16 new leads and 10 active projects.
In Brazil to make the case for investments in the greater Pittsburgh region is Dennis Yablonsky, chief executive officer of the Allegheny Conference on Community Development. As DCED secretary in the mid-2000s, Mr. Yablonsky participated in trade missions to Europe, India, China and Korea.
Now he is preparing to meet Brazilian business leaders -- in areas such as energy, manufacturing and health care -- to argue that the Pittsburgh area's location, workforce, relatively low costs, research institutions and quality of living make it the right place to locate U.S. operations.
A manufacturer of equipment to extract natural gas or treat wastewater, for instance, could decide to open shop in Pittsburgh.
"My goal really would be to come out of here with some commitments to some visits or commitments for some phone conversations to take the next step in evaluating the region," Mr. Yablonsky said. "Two years from now, if we end up with two foreign direct investment projects from this mission, that would be a success."
While the Allegheny Conference focuses on the southwest, Corbett administration officials will be selling Pennsylvania as a whole as a better destination than other U.S. states.
"I think the typical South American looks at the U.S. market as one market, and what we're trying to show is, well, in reality in a way you have to look at the country on a state-by-state basis," said Mr. Walker, the DCED secretary. "We're not down there marketing the United States. We're down there specifically marketing Pennsylvania and what's manufactured or produced here."
Trade missions regularly depart Pennsylvania, though the governor only occasionally lends them his status. Jim Glessner, the chairman and past CEO of TrackAbout, a Moon company that provides Internet-based asset tracking software, said a recent mission to South Africa, Australia and New Zealand proved highly productive. Mr. Glessner said he found representatives in Australia and South Africa to market TrackAbout's product to businesses there.
"We expect to get many more new customers now that we have established these relationships with agents in these countries," he said.
After being carried into international markets by large customers -- its product has been translated into Czech, Portuguese and Turkish -- TrackAbout wanted to make its own inroads overseas. Mr. Glessner said the trade mission was the right approach.
"If you did it on your own, you would spin so many wheels and make so many mistakes," he said. "It's expensive to travel that far and stay in those hotels and pay for the taxis, but you would never be able to organize that less expensively for yourself and have it deliver nearly the same level of results."
Five Western Pennsylvania companies have reported approximately $400,000 in export sales as a result of state-organized trade missions to Australia, Saudi Arabia, South Africa and France and Germany in the past two years, according to the Office of International Business Development, within DCED.
One Carnegie company, NeuralWare, in 2010 reported sales of their intelligence software to King Fahd University of Petroleum & Minerals in Saudi Arabia following a Pennsylvania trade mission there in 2008 and a follow-up trip in 2009.
Companies assisted by the state's export program reported more than $831 million in sales of goods and services last year to overseas customers, according to DCED. Exports facilitated by the Center for Trade Development at DCED helped support 6,897 jobs and generate more than $62.4 million in state and local tax revenue, an agency spokesman said.
In Sao Paulo, the trade mission kicks off this morning with a briefing by the U.S. consulate on how to do business in Brazil. Then the group has through Thursday afternoon -- when they fly to Chile -- to start doing so.