Export growth boosts economic future of metro Milwaukee

Milwaukee was once known as “The Machine Tool Shop of the World” because of its strong industrial output. Companies such as Falk, A.O. Smith, Briggs & Stratton and Allis Chalmers were symbolic of the region’s robust factory capacity that exported products throughout the world.

Although Wisconsin’s manufacturing economy was severely culled by the Great Recession, much of the state’s industrial capacity has returned, and Milwaukee companies are spearheading the recovery. Exporting is a huge part of that.

Peter Beitzel, vice president of infrastructure and international business with the Metropolitan Milwaukee Association of Commerce, said the southeastern corner of the state is particularly poised to benefit from rising export activity.

“Milwaukee is well-positioned. We never lost our manufacturing base and (international demand) is coming back,” Beitzel said. “Appetite for U.S. products is increasing, and there is a respect for the quality of U.S.-made goods.”

Read more about how the state’s exporting activity is boosting the businesses of several packagers, logistics and distributing companies in the cover story of the latest issue of BizTimes Milwaukee.

Manufacturers based in metro Milwaukee have seen significant growth in exporting.

South Milwaukee-based Bucyrus International Inc. and Milwaukee-based Joy Global Inc., are both producers of some of the largest mining equipment in the world, and routinely ship mining shovels, drag lines and related pieces to customers in Canada, Russia, China, Africa, South America and other parts of the world.

In their most recent quarterly earnings reports, both companies noted the continued international demand for their mining equipment. Bucyrus noted increases in sales of hydraulic excavators, off-highway haul trucks, underground mining equipment and surface mining equipment in markets such as Australia, Canada, Brazil, China, Mongolia and India.

Joy Global’s most recent quarterly earnings report said it had underground mining equipment orders in Australia, and surface orders from Canada, South America, Australia and India.

Milwaukee-based Rexnord LLC’s most recent quarterly earnings report said it had $420 million in net sales, a 15 percent increase from the same quarter in 2010. About 30 percent of the company’s sales are outside of the U.S., the statement said.

Cudahy-based Ladish Co. had $9.4 million in first quarter 2011 earnings, up from $5.3 million in the first quarter of 2010. Quarterly sales rose to $114.1 million from $98.9 million one year ago. According to the company’s quarterly earnings report, about 43 percent of its 2010 sales were export related. Its largest export market is England.

While some of Milwaukee’s largest industrial manufacturers have been exporting for multiple decades, some of its smaller manufacturers are still dipping their toes into international waters.

Perlick Co., a Milwaukee-based manufacturer of bar and beverage dispensing systems, is also looking to expand its export sales. The company has sold into the Canadian markets for many years, but is working to penetrate overseas markets, said Jeff Wimberly, vice president of sales and marketing.

In January, Wimberly’s responsibilities were increased and he was tasked with responsibility for international sales. Since that time, he’s been working to identify additional growth markets for Perlick.

“The issue we’ve been working on is where else to go and how to do it,” he said.

The company has attended several trade shows in Germany, and England and France to present opportunities for Perlick’s under-the-counter refrigeration systems, Wimberly said. Perlick is also developing marketing plans for its refrigeration equipment for the Australian and New Zealand markets.

“There is a significant demand for outdoor refrigeration (in those markets),” Wimberly said. “There are a lot of companies on the low end, but they can’t handle the temperature extremes. We know we will meet the performance demands, but we still have some work to do on the electrical side.”

The company expects to have products available in the Australian and New Zealand markets in the next eight to 12 months. The English and French markets will take more time, Wimberly said.

“Refrigeration there is an untapped market for us, but we have no on the ground reps and that will be key,” he said. “It will take a bit more time there.”

Year to date, Perlick’s export sales have risen 20 to 25 percent.

“We’ve been making some great strides in India,” Wimberly said. “We are expecting (international sales) to become bigger and more important for us over the next three to five years. We will be putting in more effort from a sales and engineering perspective than we ever have before.”

Milwaukee Gear Company, a Glendale-based manufacturer of industrial gears for the energy and gas, mining, wind power, construction and related markets, is now exploring new export opportunities, said Rick Fullington, president and CEO.

“We (recently) sent a sales guy to China to visit customers there to get a better sense of what’s going on and what some of the opportunities are,” he said. “Certainly, they’d like companies like us to come and start a facility and bring knowledge and technology to their country.”

Milwaukee Gear has no plans to establish a facility in China or any other market outside of the U.S., Fullington said. The company, which operates a 190,000-square-foot facility in Glendale with about 230 employees, is now exporting a significant amount of its product to foreign markets, largely through its OEM customers.

“Most of the customers we deal with are U.S.-based,” Fullington said. “They take our product, assemble it into theirs and then it gets shipped worldwide.”

Several of Milwaukee Gear’s customers have operations in Asia, and the company now ships some of its product there for them.

More than 50 percent of Milwaukee Gear’s products made for the oil and gas markets are being used domestically, Fullington said. The company estimates that more than 50 percent of its non oil and gas products are being exported today.

While the company wants to grow its export-related sales, it is also being careful to protect its intellectual property and domestic production.

“We’re making a larger, high-quality product that is not a commodity,” Fullington said. “We’ve got a couple hundred people here and we’re busy. How do we take those valuable resources and help grow them here and ship overseas? That’s a difficult hurdle to overcome. And from a technology transfer standpoint, how do we safeguard that in the long term? We’re continuing to look at that and try to understand it.”

 

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