When Fash Asvadi launched the website for his Nicholasville, Ky.-based business, Pizzaovens.com, in 1999, his intent was to serve a world of pizza-makers with no geographic limits. Despite the challenges of language barriers and bureaucratic red tape in international transactions, Asvadi has seen his niche company’s slice of the global market increase.
In the early years, international clients represented less than 3 percent of total sales for Pizzaovens.com, which sells new and refurbished commercial pizza equipment. Today, exports account for almost 30 percent of the company’s business, and from Asvadi’s perspective, the exporting opportunities are just warming up. The South American market, in particular, is growing, he said, and he may be looking to add another employee to his current staff of 11 to accommodate it.
“We are just beginning to scratch the surface,” he said.
And Pizzaovens.com is not alone. Kentucky merchandise exports hit a record high of $12.1 billion in the first half of 2013, increasing 13 percent over the same period in 2012, according to the U.S. Department of Commerce’s International Trade Administration (ITA).
“I’m just thrilled that Kentucky is on the upswing,” said Sara Melton Moreno, director of the U.S. Export Assistance Center in Lexington. “And we’re on track to have record exports again.”
Several of Kentucky’s top export destination countries showed substantial increases in key industries for the state. Kentucky exports to Saudi Arabia alone increased by 684 percent, to $389 million. Transportation equipment accounted for 85.1 percent of those exports, or roughly $331 million.
Kentucky’s total exports to Germany in the first half of 2013 increased by 39 percent, with transportation equipment accounting for 28.6 percent of those exports. Other export destinations that showed significant gains included Hong Kong (33 percent), China (31 percent) and Austria (24 percent). Beyond transportation equipment, Kentucky’s key merchandise export categories included chemicals, machinery manufactures, computer and electronic products, and primary metal manufactures.
Moreno works with large and small Kentucky businesses looking for exporting guidance and assistance in connecting with international buyers. Some want to incorporate exporting into their strategic plans for long-term business growth, while others are looking for simple logistical advice to fill an international order from the company’s website. Either way, Moreno said, her office is available to help.
“If it has to do with exporting, we are going to be there and be supportive,” Moreno said.
Asvadi said Lexington’s Export Assistance Center has been particularly useful in helping to legitimize Pizzaovens.com’s presence in the global market, especially for customers wary of investing large sums with an unknown small business located in another hemisphere.
"I think the biggest hurdle, as far as being a small business goes, is trying to prove that you are a legitimate entity," Asvadi said.
Increasingly, Kentucky businesses are growing more comfortable with the idea of conducting business internationally, Moreno said, but they are still not looking to overextend. Most are content to enter one or two new markets at first, adding more under a manageable timeframe.
“In a lot of ways, they are becoming less conservative, but they are still being careful,” Moreno said.
In addition, the commercialization of research and development efforts at the state’s leading universities has shown promise for the state’s export potential in fields such as biotechnology, Moreno said.
“Kentucky is starting to see some new and interesting businesses spring up,” Moreno said. “It is very interesting to see them emerge and almost off the bat become global players.”
On the national level, United States merchandise exports hit a record $781 billion in the first six months of 2013, according to the ITA. Kentucky was one of 17 states that set record highs during that time period. Kentucky’s increase of roughly $1.4 billion was the fourth highest in dollar terms, behind Texas ($4.3 billion), Washington ($3.8 billion), and New York ($3.1 billion).
But despite the recent record gains for the state, there is still a great deal of untapped opportunity in the global market for Kentucky companies, Moreno said.
“There’s a lot of business to be done out there,” said Moreno, who noted that 95 percent of the world’s consumers live outside the United States.
And for those that prefer to concentrate on domestic markets, Moreno said it is important to remember that other companies increasingly are erasing those boundaries.
“Their competition from overseas is already here,” Moreno said.
Companies interested in obtaining more information about exporting can contact the Lexington office of the U.S. Export Assistance Center at (859)225-7001 or check online at www.export.gov/Kentucky.