Exporting pays off - pointers to home manufacturing companies on how to start their export business

Business America, August 24, 1992

The director of marketing of a New England manufacturer of log homes offers tips to homebuilders on how to export homes. The firm is off to a good start in Israel and Japan and is exploring additional foreign markets. We select our export success stories not because we endorse any particular firm or its business plan and activities, but because we believe their experiences will instruct other companies to improve their performance. We welcome your export success story. Write or call Business America, Room 3414, U.S. Department Of Commerce, Wash., D.C. 20230; tel. (202) 377-3251.

Finding the U.S. domestic housing market slow, New England Log Homes, Inc., headquartered in Hamden, Conn., has begun exporting homes.

Peter M. Hart, the company's senior vice president and director of marketing, said, "Home builders and manufacturers of home elements who want to break out of the housing doldrums, should consider building and exporting residences to areas of the world experiencing a housing crisis."

New England Log Homes ships all components of the single-story buildings except foundations and electrical and plumbing hookups. Shell components are manufactured in plants in Great Barrington, Mass., and Marysville, Calif.; design and engineering operations are performed in Connecticut. All other elements, such as doors, flooring, and insulation, are purchased from other manufacturers.

In Israel, 100 of the company's duplexes have already been erected by an Israeli construction company to help house the large influx of immigrants from the ex-Soviet nations. The Israeli government has an option to buy up to 1,200 of the firm's homes. The company also has shipped 20 homes to Japan, where it reports considerable interest in the log home concept. It expects the market to grow now that it has a sales representative in Japan.

New England Log Homes has received inquiries from other countries, according to Hart. A distributor is now building a home in Wales that he expects to stimulate some good-sized orders.

Hart provides several tips for housebuilders who wish to export:

* Do market research. Find out which countries have housing shortages and have funds to pay; a good source is the country desk officers in the U.S. Department of Commerce's International Trade Administration (the firm is a client of ITA's district office in Hartford, Conn.). Other contacts: the American Building Products Export/Import Council, Suite 1200, 1090 Vermont Ave., NW., Washington, D.C. 20005; the Building Systems Council of the National Association of Home Builders, 15th and M Sts., NW., Washington, D.C. 20005; and state development commissions that often have export divisions.

* Once a country has been selected, make contacts with its governmental authorities to get detailed information about housing needs and all the ramifications of supplying them.

* Get information on local codes and the exact types of housing. Watch out for circumstances, climatic conditions, and cost limitations that may require changes in the design that you normally supply.

* Join with a partner in the selected country--a reputable and financially stable building contractor. Not only will he help you win bids, but he can provide advice on local tastes and traditions and other requirements.

* Learn all you can about crating, shipping and exporting of home components. Find a reliable freight forwarder.

Doing Business in NIS Will Be Discussed in Chicago

A conference on financing exports and investments to Eastern Europe and the Newly Independent States (NIS), concentrating primarily on funding programs of the World Bank and the European Bank for Reconstruction and Development, will be held in Chicago, Oct. 8-9. The conference is being presented by ITC Consultants and cosponsored by the Commerce Department's Chicago District Office.

The World Bank and EBRD are playing leading financial roles in the development of free-market economies in Eastern Europe and the NIS. The roles of these multilateral institutions in private financing present tremendous opportunities for U.S. companies interested in doing business in the region.

Those U.S. companies eager to provide modem goods and equipment, technical assistance, and/or consulting services to the NIS can all benefit from tapping into the billions of dollars in financing that will be available through these two banks over the next three years.

Many West European companies have already succeeded in getting business in the NIS through World Bank and EBRD funds. These West Europeans are getting involved because of their knowledge of financing opportunities and their ability to take advantage of them.

U.S. companies that wish to tap into World Bank and EBRD funds must understand the procurement procedures, keep abreast of upcoming projects, and, of course, put in the winning bid on projects. At the World Bank and EBRD Conference in October, high-level representatives from both multilateral institutions will be on hand to discuss their respective programs and advise U.S. companies on how to obtain funds.