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State helping Jersey companies find big dollars in global economy

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Adsorptech CEO Jim Flaherty
Adsorptech CEO Jim Flaherty - ()

Jim Flaherty knew there were only two ways to save struggling Adsorptech when he signed on as president and CEO a few years ago.

One: Develop new products.

Two: Sell them worldwide.

Kickstarting the export process took one phone call — to Lt. Gov. Kim Guadagno, who willingly gave out her cell phone number at a small business event last year.

Guadagno connected Flaherty to the state's Business Action Center, which helped him identify viable international markets, navigate complicated compliance issues and get $4,000 in grants to finance trips to Turkey and Colombia.

While the company brought in absolutely nothing in export sales in 2012, this year they are looking at $1 million, Flaherty said.

"That to me is lightning speed," he said.

"It is not a simple road. I mean, there's enough twists and turns in there that make me dizzy," Flaherty added. "We didn't want to find out on our own, trip and get hurt. We wanted to do it right the first time."

Adsorptech, which specializes in gas-separating technologies, is among some 21,000 businesses in the state that are actively exporting, 92 percent of which are small companies. But the process is complicated and expensive, and despite the tremendous opportunities available in international markets, some businesses are hesitant to take the plunge.

That's where the state comes in, with programs dedicated to helping companies get into the game.

Those programs have helped 21st Century Group, a North Brunswick-based company that started exporting solar lighting technology in January, said CEO Jeff Stern. They have received orders from Burkina Faso and Zambia and landed a contract to send 50,000 solar street lights to Jamaica.

In the past 12 months, they have brought in $7 million in export sales.

NeoStrata Company, which specializes in skin care products, has been doing business internationally since 1990. But a $20,500 grant from the state helped them connect with distributors and customers in Istanbul and Paris, said Leigh Ann Catlin, vice president of international business development at NeoStrata.

It's a trend Tom Bracken, president and CEO of the state Chamber of Commerce, would like to see continue.

Bracken said exporting has become a much more attractive option in recent years as companies are still struggling to increase their overall top-line revenue.

"I think it's important for them to diversify into the international markets, and maybe that will give them other opportunities to grow by being introduced to complementary companies in those countries," Bracken said. "I think many are very interested, but they don't know what to do."

One resource is the state's Business Action Center and its Office of International Business Development and Protocol.

The agency is formalizing efforts to engage companies in the state with foreign countries that want and need products made in the Garden State. And it's trying to convince businesses here that those countries can be sources of revenue growth and long-term success.

Specifically, the office can help companies in the state seek out buyers and identify potential international markets. It also provides government advocacy work and helps companies decipher foreign customs procedures.

By making those daunting aspects of the exporting process easier to handle, the state is hoping more companies will get motivated to give exporting a go, said Lt. Gov. Kim Guadagno.

"For many businesses, 'going international' requires awareness and education about the process and the markets that are most suited for particular goods and services," Guadagno said in an email.

"Our international business advocates work to identify specific goals and provide step-by-step guidance," she added. "Our process is designed to minimize risk and create a positive outcome. Simply put, we help companies connect the dots."

And that can be a boon for local businesses, Bracken said.

About a year and a half ago, the Business Action Center brought together six of the largest oil companies in Canada, which needed about $1 billion in products.

So the state amassed 70 companies that could deliver those products. More than 50 walked away with significant export sales to the six Canadian companies, Bracken said.

"It's obviously a very healthy thing for New Jersey, a very healthy thing for the companies in New Jersey, and it's something that I think you probably say, 'Why didn't this happen before?'" he said. "And I think the answer is, the administrations prior to the Christie administration weren't that interested in paying attention to the small business, middle-market business sector."

So with an administration and its state agencies actively working to connect businesses in the state with opportunities overseas, what could be holding companies back?

Quite simply, it's intimidating.

Tom Smith, executive director of the New Jersey Tooling and Manufacturing Association, said fewer than 10 of the association's 100 or so members are currently exporting.

"A lot of our members are small and haven't considered much in the way of exporting," Smith said in a recent interview. "We're trying to encourage them to think outside the box."

Many companies are kept at bay by the additional paperwork and documentation required when businesses start to export. And as the economy improves, many companies are reluctant to try something new and turn their focus away from guaranteed profits.

But exporting is important and could be a key source of new revenue growth for companies in the state, Smith said. So he continues to let his members know about any workshops or programs that could help them make the leap in a less frightening way.

"The most we can do is get the word out to our members," he said. "They then have to take action."

And many companies who have taken their business beyond our borders are reporting it is well worth the risk.

Exporting is part of what brought Adsorptech back from the brink of bankruptcy, Flaherty said.

In North America, there are four major industrial gas companies that dominate, leaving smaller companies like his gasping for air.

Overseas, Flaherty has found an opening, through the company's new EcoGen product, which produces oxygen. Adsorptech's first two orders came from an oil refinery in Italy and a fish farm in Israel. Next, the company is planning to target Turkey and Colombia and continue expanding their international reach slowly, two countries at a time, to keep their growth sustainable.

"Talk about being outside my comfort zone, the whole company's comfort zone," he said. "It's quite a story. I love telling it."

E-mail to: maryj@njbiz.com
On Twitter: @mjohns422

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