For Douglas Manufacturing, a Pell City manufacturer of conveyer components, international trade is critically important to its business.
“International trade in particular is a vital portion of our total sales volume,” company president Paul Ross said. “International sales is growing at a faster pace than domestic sales. The more sales we get the more products we can manufacture and the more people we can hire. It is a critical component of our overall sales strategy.”
As World Trade Week is celebrated, Douglas Manufacturing is just one example of Alabama’s growing affinity for trade. In just two years, Alabama’s two-way trade growth increased from $41.2 billion in 2015 to $42.7 billion in 2016 before peaking at $45.34 billion in 2017, according to the Alabama Department of Commerce. Douglas Manufacturing recently was a part of a trade mission to South America with the Alabama Department of Commerce. During the trade mission, Ross attended several business meetings specifically tailored to his company and potential customers who might be interested in its product.
“It was a huge success,” Ross said. “We were lined up with perfect [customer] matches and we will hopefully meet with them in the future to establish long-term business relationships.”
Douglas Manufacturing’s primary export markets are North America, Central America, South America and the Caribbean.
Across the state, total exports reached a record-breaking $21.7 billion in 2017, up 6.27 percent over 2016. Birmingham recorded exports as 7 percent of its GDP and 23,060 jobs were export-supported; $4.1 billion in real exports was tabulated, and petroleum and coal products, iron and steel products and freight and port services ranked as the top three industries by real exports.
“Exports help us because they help create work, jobs and income for our company and employees,” said Mike Keel, president of McWane’s international group. McWane casts ductile iron products including pipe, valves, hydrants, fittings and plumbing products, manufactures fire extinguishers, fire suppression systems, steel pressure vessels and builds network switches and monitoring equipment. “It is very important. While our core business is virtually always in the United States, for growth and additional revenue and income, exports enable us to have more workers and better-paid workers.”
To promote this type of foreign direct investment, the Birmingham Business Alliance (BBA) is joining the state-led delegation to SelectUSA in Washington, D.C., next month and will attend SEUS Canada in Mobile to promote exchanges between the Southeastern United States and Canada.
Here are some facts about foreign direct investment and exports:
- In 2017, seven foreign-based companies announced 900 jobs and $323.2 million in capital investment in Birmingham, representing 29 percent and 56 percent of announcements, respectively.
- Birmingham is home to 81 companies representing 20 countries; the top three countries represented are Germany with 18 companies, Japan with 14 and Canada with 13.
- Foreign-based companies that invest in the United States typically pay higher wages, up to as high as 25 percent more than their United States-based counterparts.
- Alabama’s top export partners include Canada, China, Germany, Mexico and Japan.
- Automotive exports represent over half of the state’s exports.