Wichita Area Ranked Third In Nation For Export Growth: What’s Next Under Trump Trade Policy?

Feb 27, 2017

Companies and small businesses in the Wichita area and south-central Kansas are leading the nation when it comes to global exports. At a time when the majority of the 100 largest metro areas in the U.S. experienced a decline, the region ranks third for its export growth.

Trade experts say two very strong headwinds have made international business difficult the past few years: a strong U.S. dollar and a slowdown of the global economy.

Yet, despite these conditions, Wichita and south-central Kansas companies were still able to export their products and become the No. 3 exporter in the nation.

Karyn Page has served as president and CEO of Kansas Global Trade Services for about 13 years.
Credit Deborah Shaar / KMUW

"We actually improved, in a positive way, our exports year over year," says Karyn Page, president of Kansas Global Trade Services. "And we did that in a more positive way than almost every other city in the nation."

As head of the Wichita-based company, Page helps Kansas companies grow by creating export opportunities.

The Kansas Department of Commerce reports that exports totaled $10.69 billion in 2015, the most recent data available. Compared to previous years, exports decreased by $1.36 billion, representing an 11.3 percent drop.

Most of the top 10 exported commodities in Kansas declined, but two areas showed a strong performance: The largest gains were seen in the special classification provisions category, which includes products such as repaired goods (up 35.7 percent), and aircraft and parts category (up 8.2 percent).

Page says south-central Kansas exports increased by nearly 7 percent in 2015, the third highest growth rate among the nation’s top 100 metropolitan areas.

"We’re manufacturers and producers, and we build products the world needs and the world wants, and we do it in a quality way and in a competitive way," Page says.

Research from the Brookings Institution, a nonprofit public policy organization, shows exports contribute to nearly 20 percent of Wichita’s gross domestic product (GDP).

When businesses expand to international markets, they grow and become more competitive in all their markets. They often create new jobs too.

Page says that’s why the region’s economy is tied to export performance.

"Whether we realize it or not—we are dependent on exports and the more our companies export, the better off we’re going to be locally," Page says.

Kansas Global Trade Services is partnering with dozens of economic development and trade agencies, universities, cities and counties to implement a five-year export plan for south-central Kansas.

They’re setting up an export assistance program, working with small and medium-sized businesses to increase exports and supporting aviation supply chain companies.

"What we’re focusing on this year, with the export plan in the third year, is really education focused," Page says. "We’re going to have more robust training available than we did in previous years in the export plan—sort of a building on each year as we go."

RedGuard builds blast-resistant buildings and portable storage and offices at its south Wichita production center.
Credit Deborah Shaar / KMUW

Wichita-based RedGuard is one company on track for expanding its global exports. It builds blast-resistant buildings and portable storage structures.

Company president Darren Hillman says the buildings are used as field offices, sleeping units and restrooms at construction sites, oil refineries and military bases.

RedGuard’s safety shelters are built with thick steel walls and customized interiors for protection and security at any threat level. Hillman says he’s seeing increasing demand for the blast-resistant buildings around the world.

"I think we’ll exceed what we think is coming our way," Hillman says. "But we are used to growth and we know how to grow, so we’ll grow at the right pace."

RedGuard started in 1998 as A Box 4 U, and was a strictly portable storage company that used shipping containers because they were plentiful and had a universal design across the globe. The company grew significantly when it began building blast-resistant buildings in 2005. It rebranded as RedGuard in 2014.

RedGuard started exporting its buildings five years ago. The first international business opportunity came in Canada through their network of oil and gas industry customers.

Ross Draney works in new market exploration and development for RedGuard.
Credit Deborah Shaar / KMUW

Ross Draney works on RedGuard’s new market development.

"We have more than a hundred buildings up there now in Canada and continue to grow that market year over year," Draney says.

The company expanded its export business to several Middle Eastern countries after it established a joint venture partnership to do the manufacturing process overseas.

"What it allows us to do is keep the design and the engineering and the things that we are really good at here in Wichita, while still working on those international projects," Draney says. "If we didn’t have the manufacturing capability overseas, we really wouldn’t have the opportunity to win and to get that business."

The company is looking to increase its global reach and continue to grow the military and security side of the business.

Hillman says they’re bidding on more projects than they have in the past six to eight months.

"I feel good about 2017," Hillman says. "We have a pretty good pipeline of stuff that we’re quoting, and if we get a fraction of what we’re quoting right now, it will be a good year for us."

RedGuard uses shipping containers as the base for its portable office and storage structures.
Credit Deborah Shaar / KMUW

The five-year regional export plan is helping small businesses like RedGuard increase exports and enter new markets by offering export accelerator grants and training.

It’s one of the strategies they think will help boost export growth in the region.

Kansas Global Trade Services’ Karyn Page says putting the plan to work has generated $6.8 million in new exports from south-central Kansas.

"We put together what looks to be a robust ecosystem," Page says. "So much so that we are getting inquiries from outside of this area about how they can access the tools that we put together through the export plan for their companies."

Currently, Canada and Mexico are the top markets for Kansas’ exports.

What remains to be seen is how national trade policies will affect export performance in the region.

President Donald Trump is considering renegotiating portions of the long-standing North American Free Trade Agreement (NAFTA) with Mexico and Canada. He withdrew the United States from moving forward with the Trans-Pacific Partnership, or TPP, in January.

Page says when companies face uncertainty with trade policy, it makes doing business overseas difficult.

"If they’re confused about how to behave within the NAFTA economy or how to behave in the global economy, then what they will be forced to do is maybe do nothing which would be terrible for the U.S. economy and the Kansas economy," Page says.

She’s watching policy developments closely these days and says it’s better to wait and see what’s really happening before becoming too reactionary.

"Trade policy takes time to not only craft, but to dismantle," Page says.

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Follow Deborah Shaar on Twitter @deborahshaar.

 

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