Utah’s Exports Keep Rising

It took less than four years for Lee Taylor to see sales of his radio-controlled hobby vehicles zoom from $8 million to nearly $16 million.

By Lesley Mitchell
The Salt Lake Tribune

But Taylor isn’t surprised at the growth of his West Valley-based HRP Distributing Inc. In addition to strong domestic sales, HRP has cultivated sales in Australia, New Zealand, France, Italy, the United Kingdom, Spain and Israel.

HRP, which recently was crowned Small Business Exporter of the Year by the U.S. Small Business Administration, is among a growing number of small Utah companies that have developed lucrative export markets. In fact, Utah’s exports in recent years have been fueled by small and medium-size companies in all industries that have carved a successful niche selling internationally.

"From a logistics standpoint, the Internet has made it much easier for small companies to export their products," said Franz Kolb, director of Europe for Utah’s International Business Development office. "That is why we’re seeing so many of these small companies succeed in other markets."

Utah’s overall exports topped $4.5 billion last year, up nearly 30 percent from $3.5 billion in 2001. Utah’s exports account for about 0.66 percent of the nation’s exports, up from 0.51 percent in 2001.

But that tiny share of the nation’s exports makes it easy to underemphasize the importance of exporting to Utah’s economy, said Earl Fry, professor of political science at Brigham Young University and author of "Mapping Globalization Along the Wasatch Front," a study presented last year to the Pacific Council on International Policy in Los Angeles.

While researching the impact exports have on the state’s economy, Fry discovered that more than 100,000 Utahns — more than 10 percent of the state’s work force — are employed in international trade-related jobs.

"We knew the coastal communities had a fairly significant number of jobs relating to exporting but 100,000 jobs is significant for a landlocked state in the Rocky Mountains," Fry said.

Where are Utah companies sending their products? Switzerland remained the state’s top trading partner in 2002, buying $1.3 billion worth of goods from Utah, according to data from the U.S. Census Bureau’s Foreign Trade Division. United Kingdom was the second-largest export market for Utah last year, buying $710.2 million in products from the state, followed by Canada ($513.3 million); Japan ($427.1 million); and Singapore ($263.6 million).

State foreign trade representatives say Utah’s exports are understated to some degree in relation to other states because some products from Utah are first sent to Texas, Arizona or California before they are shipped to Mexico or Latin America. In many cases, those states, not Utah, receive credit for the value of those exports.

Also, Utah’s software companies, because of the way export data is compiled, get credit for much less than what they actually sell to other countries.

While the value of a wide variety of exported products increased last year, none rose in value as much as gold, which increased by more than 97 percent to nearly $1.8 billion. Gold last year comprised a whopping 40 percent of the total value of Utah’s exports.

Kennecott Utah Copper is the primary gold producer in Utah, if not the only producer, said Louis Cononelos, spokesman.

But gold comprises only about 15 percent of Kennecott’s overall revenue. The company produced 400,000 ounces of gold last year valued at about $320 per ounce, for a total value of $128 million. That amount, however, represents only about 7 percent of the nearly $1.8 billion in gold exported from Utah last year.

The rest of the gold probably was shipped from other states such as Nevada to a West Valley City refining facility operated by British firm Johnson Matthey Inc. The company declined numerous requests for an interview, probably due to security concerns.

Aside from gold, other important exported products are motor vehicle parts, technology products, food, aircraft parts, minerals and medical equipment and devices.

Beauty and skin care preparations are another important and growing export segment to Utah.

The state has a number of companies that market personal care products, including Utah County’s Nu Skin Enterprises, which generates revenue of nearly $900 million in more than 30 countries selling, among other things, cosmetics, lotions and hair-care products.

Usana Health Sciences Inc. of Salt Lake City, which sells nutritional and personal-care products, exports to eight countries in addition to several Caribbean islands, and expects to begin selling nutritional and personal-care products in Korea later this year and Mexico next year. More than half of the company’s sales are in other countries.

Fry of BYU said the types of products exported from Utah, once primarily focused on natural resources, have been diversifying over time. That diversification helps the state and its exporters better weather economic downturns.

HRP Distributing Inc. is one of those companies.

"With the economy the way it is right now, we haven’t done too bad," Taylor says.

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http://www.sltrib.com/2003/May/05182003/business/business.asp