Journal of the Minnesota Precision Manufacturing Association

Manufacturing | Mat ters
Manufacturing & the International Economy
ONE COMPANY’S STORY
by Dan McElroy
Despite the economic challenges that
small businesses in Minnesota are facing
as a result of the recession, some such as
LaValley Industries in Bemidji, Minn.,
are thriving and lending a hand where it’s
needed most.
Jason LaValley, president of
LaValley Industries and designer of the
DECKHAND®, a versatile pipe-handling
device, offered modified equipment to
assist with the recovery in Chile from
February’s massive earthquake.
Handling large pieces of pipe of all
sizes and weights can be a dangerous
business. Workers in the directional
drilling industry—deckhands—can be
knocked about and injured in falls.
Jason’s concern about workplace
injuries led to his development of the
DECKHAND® prototype, built out of
his own pocket. The new DECKHAND®
provides total operator control and frees
up the human deckhands to clean the
work site, fix broken parts and work on
other tasks.
New business opportunities in Chile
may await LaValley Industries, stemming
from Jason’s participation in Governor
Pawlenty’s trade mission to South
America last December. Oil and gas field
machinery and services rank among
the best prospects in the Americas for
exporters, and Jason met with Komatsu
Chile, which manufactures and sells
construction and mining equipment,
utilities, and industrial machinery. And
while nothing is firmed up yet, he’s
looking for a DeckHand® distributor
in South America.
Our Northwest Regional Small
Business Development Center (SBDC)
helped Jason and his father, Roger,
launch the business. The SBDC has
assisted with loan packages, accounting
advice, marketing and management
expertise, and connected Jason with
other business assistance resources.
Currently, the SBDC is helping Jason
obtain additional investor equity.
Our export markets are showing signs of
recovery, and exports increased in seven of
our state’s twenty largest markets.
Clearly, the entrepreneurial Jason has
a product in demand in the international
economy. We also think his success can
be attributed to his ability to leverage
the many programs and services offered
by the Department of Employment and
Economic Development (DEED), from
the Minnesota Trade Office to labor
market information to Minnesota SBDCs.
State Exports in 2009
What do annual export numbers tell
us about 2009, and what do they portend
for the future of small manufacturers
such as LaValley Industries?
Minnesota manufactured exports
were $14.6 billion in 2009, declining
15.5 percent in the midst of an economic
downturn. Nationally, U.S. exports fell
18.3 percent for the same period.
Minnesota ranked 20th largest in value
among all states, unchanged from 2008.
Our export markets are showing
signs of recovery, and exports increased
in seven of our state’s 20 largest markets.
The 6.3 percent drop in the fourth quarter
of 2009—much smaller than in previous
quarters—is a harbinger of a brighter
outlook for 2010. We look forward to
increased economic activity from LaValley
Industries and others appearing in annual
export statistics this year.
In 2009, Minnesota exports increased
to the following seven top 20 trading
markets: China ($1.3 billion, up 1 percent),
Ireland ($897 million, up 1 percent),
Australia ($423 million, up 5 percent),
Singapore ($386 million, up 1 percent),
Malaysia ($285 million, up 72 percent),
Taiwan ($279 million, up 1 percent) and
Thailand ($182 million, up 5 percent).
Five of the countries with increased
exports in 2009 were in Asia, pointing to
encouraging business prospects in 2010.
Asia was the state’s second-largest source
of exports by region, after North America.
Minnesota exports of computers and
electronics were valued at $3.4 billion.
Other manufacturing industry exports are:
machinery ($2.4 billion), miscellaneous,
including medical products ($1.9 billion),
and food ($1.2 billion).
Combining total manufactured exports
with preliminary estimates of Minnesota’s
exports from agricultural commodities
(about $3.5 billion) and services ($9.1
billion), the state’s total exports for 2009
were estimated at $27 billion.
Minnesota Trade Office
The Minnesota Trade Office, an office
of DEED, is focused on increasing state
export sales in foreign markets. The Trade
Office promotes international trade by
providing export information, export
education and training, and one-on-one
counseling to Minnesota companies that
wish to sell manufactured goods and
services in the international marketplace.
Remember you can find out more
details about DEED, our services and
programs at www.PositivelyMinnesota.
com. We’re using social media, too.
Follow us on Twitter at
www.twitter.com/PositivelyMN. PM
Dan McElroy is the
commissioner of the
Minnesota Department of
Employment and Economic
Development (DEED). He can
be reached at 651.259.7114.
30 | PRECISION MANUFACTURING July | August 2010