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byline: Joan Tupponce

State programs help HDT Global tap international markets

 

Defense and security entities around the world know the name HDT Global. The Ohio-based firm is a leader in the design and manufacture of products used by the military, governments and corporations. “If you have security or military forces, you need our products,” says company Vice President Brian Dearing. 

HDT provides everything from the HDT Storm, an ultra lightweight, air-deployable tactical vehicle to advanced prosthetic arm technologies for returning soldiers.

The company has four primary facilities in Virginia — two in the Fredericksburg area and two near Lexington, in Fairfield and Buena Vista.

“We will be consolidating Fairfield into the Buena Vista site this year,” says Dearing, noting that Fairfield employees (most of whom are in engineering and research and development) will move to Buena Vista, which manufactures military shelter products.

The company was formed in 2005 when Virginia-based Base-X and Ohio-based Hunter Manufacturing joined forces. It is now an aggregation of 10 companies. It adopted its HDT Global moniker in 2007 when it decided to expand into the international marketplace.

“It was more of an aspiration than a reality,” Dearing says of the company’s global dealings at the time. “We grew into the name. Now we truly are a global company.”
He credits part of the company’s success in the world market to the Virginia Economic Development Partnership’s VALET program, which helps companies expand into global markets. The company applied to the program in 2006 after it made the decision to start its international business.

“We decided to do international business in an applied fashion and not just wait for an occasional phone call,” Dearing says. “VALET was a natural progression of that decision. The program gave us structure and guidance. We would not be nearly as far ahead as we are without them.”

About 250 of the company’s 1,500 employees work in Virginia. “We have employees that live all over the state,” Dearing says, noting that a handful commute from Alexandria to Fredericksburg. “They like that reverse commute,” he says. Dearing notes that HDT likes being in the Lexington and Fredericksburg areas. “We have really good schools that turn out qualified people. We have great resources in terms of employees.”

The company currently sells to Australia, Japan, the United Kingdom, Canada and Chile as well as the U.S. One of the biggest proponents of homeland security is Japan, Dearing says. “The Japanese are more organized with regard to homeland security than the U.S. Japanese homeland security is run through the fire department, which is nationalized. It’s a federal asset.”

Dearing has learned a great deal about global selling over the last six years. “One of the early-on mistakes I made was that I wanted everybody to be a reseller. I didn’t want any agents or representatives,” he says. “It turned out that is not the right model for every market. You need a partner that is well connected and knows the system, particularly in the Middle East.”

Small- and medium-size companies need a partner in every country that “knows the lay of the land,” he adds, noting that companies that want to be global have to have a global mindset. “You have to look at the whole world as your market.”

When the company started its international dealings, Dearing traveled most of the time. “I have been to every continent except Antarctica,” he says. “When we started focusing on international, we were doing it on a shoestring. You had to do everything. Now we have a full international team, and I don’t travel as much.”

The company opened an office in Melbourne, Australia, a year-and-a-half ago after selling products to the Australian Department of Defense. Dearing enjoys working with Australians and appreciates the fact that the country has good relations with many other nations. “They are a wonderful people,” he says of Australians. “It’s an optimistic, forward looking culture. Melbourne is a great base of operations for the rest of Asia.”

There is no language barrier, and there is a transparency in business that’s similar to the U.S. “They have a great open and direct way of doing business,” he says. “When you have a very transparent market like we do in the U.S. where everybody has a fair chance, you have to be better. You have to have a really good product. That is what will carry you through in a transparent market. Your success is based on merit.”

The company wants to continue expanding, especially in the Middle East, and is working with VEDP’s new initiative “Going Global.” It focuses on helping Virginia defense-related businesses adversely affected by defense budget reductions increase export opportunities overseas. “This is a real credit to the way the state of Virginia looks at things,” Dearing says. “We are using it because we do have some significant international business. It will help us bolster that.” 

Economy in Melbourne, Australia

The capital of the state of Victoria, Melbourne is the second largest city in terms of population in Australia. Industry sectors range from advanced manufacturing and clean technology to biotechnology and research and development. The Fishermans Bend in the city of Port Melbourne houses several large manufacturing firms, including automaker Holden and Boeing Aerostructures Australia, which supplies certain components for the Boeing 777 and 787 Dreamliner. It is Boeing’s largest manufacturing plant outside of the U.S. Fishermans Bend also is home to several of the 27 biotechnology research institutes in the city. Biotech firms include CSL Limited, which produces plasma, vaccines and pharmaceuticals. GKN Aerospace and Aerostaff are two of several aerospace companies in the city. 

Economy in Rockbridge County

Rockbridge County has a diverse economy. Flooring manufacturer Mohawk, one of the county’s larger employers, represents the textile industry. Large employers also include Swedish-based Heatex America, which manufactures and sells heat exchangers, and Swedish-based Munters, a leader in humidity and climate control technologies. Other industry sectors represented are the plastics and tobacco industries and trucking, with economic generators White’s Travel Center and Lee Hi Travel Plaza, one of the oldest truck stops on the East Coast. Lexington’s two major employers are Washington and Lee University and Virginia Military Institute, which account for approximately 1,400 jobs. The city also is home to Devils  Backbone Outpost Brewery, which brews the company’s two flagship beers and is currently undergoing an expansion.

High Liner Foods expands in Newport News and abroad

The fish in an Arby’s fish sandwich may be harvested from international waters, but the breaded filet is made at the High Liner Foods plant in Newport News. “It’s the company’s most well-known product that comes out of that plant,” says Keith Decker, the company president and chief operating officer. High Liner also makes fish filets for McDonald’s, Burger King and Wendy’s, as well as bee-battered cod for Sam’s Club.

Founded in 1899, High Liner Foods Inc. is based in a small fishing community in Lunenburg, Nova Scotia. “It started as a fishing company producing salt fish,” says Decker.

High Liner went on to become one of the two largest fishing companies in Canada. “When the fisheries were shut down in eastern Canada in the early 1990s, High Liner went into the world market and created a name for itself as an importer and marketer of fish products,” Decker says.

In December 2011, the company acquired the U.S. subsidiary of Icelandic Seafood in Newport News for about $230 million. Icelandic was one of the largest suppliers of value-added seafood to the U.S. food service market, so the deal raised High Liner’s profile as a player in the industry.

Icelandic is one of four U.S. companies that High Liner has acquired in the past seven years. “Our sales have grown dramatically,” Decker says.  “Today we are the largest producer of frozen value-added seafood — battered, glazed and sauced — for retail chains and food service.”

The Newport News facility opened in 1997 and dealt primarily with food service accounts such as schools and chain restaurants in the U.S. “They were a very good competitor of ours,” Decker says. “It was a logical acquisition to add that portfolio into ours. From our perspective it was a great facility, probably the newest manufacturing plant in the U.S. for seafood.”

High Liner liked the fact that Newport News had a large workforce to draw from as well as access to port facilities. “It is also ideally located for trucking logistics across the U.S.,” Decker says.

The company has about 420 employees in Newport News and 1,500 companywide. The 250,000-square-foot Newport News plant, one of five company plants in North America, produces about 65 million pounds of seafood. High Liner is investing $6.6 million to modernize and expand the facility with new equipment and systems to increase production. Work is underway on the expansion, and the company has started hiring for 57 new positions. 

“Our vision is to be the leading supplier of frozen seafood in North America, and this expansion of our Newport News operation puts us a step closer to that goal,” Decker says, noting that all of the company’s sales are focused on North America.

High Liner processes more than 20 species of fish from more than 30 countries around the world, from tilapia and salmon to cod and shrimp. “We bring raw fish material through the Port of Norfolk and also by truck,” Decker says. 

The company sells to every major supermarket, restaurant and food service chain as well as club stores in North America. Its brands include Fisher Boy and Sea Cuisine as well as High Liner. “We have the leading market share in the food service sector, but we are not a leader on the retail side,” Decker says. “There are two or three companies more dominant on that side.”

High Liner gets seafood from around the world. Alaska is a source of salmon as is Russia, which also provides cod, haddock and pollock. Shrimp comes from Southeast Asia and Central America. “We also get product out of China and Scandinavian countries, such as Norway and Iceland,” Decker says.

The business has its challenges. Salmon runs, for example, may occur only eight weeks during the salmon season. “We have to take seasonal fishery and produce a product that is the same size, quality and price and deliver it 52 weeks a year to chain restaurants or supermarkets,” Decker says.

Because of the seasonality of salmon runs, High Liner has to make an educated guess as to how much salmon it will need for the year. “We are buying and committing to a year’s worth of inventory upfront,” Decker says. “It could be as much as 50 million pounds of product.”

By the end of this year, the company will purchase all its seafood from certified sustainable or responsible fisheries and aquaculture farms.

Because of its Icelandic acquisition, High Liner has strong purchasing ties with Reykjavik, Iceland, buying cod and haddock from local fisheries. “We import a lot of products from them,” Decker says. “They produce fantastic quality products that are well respected in the U.S. food service market.”

When he meets with businessmen in Reykjavik, Decker finds them to be more conservative than American businessmen. “They are more reserved,” he says. “As far as doing business with them, they are excellent businessmen. They have a lot of pride in their country. [It is] a great country to work in.”

Business meetings are similar to meetings in the U.S., he adds. “They all speak excellent English.” 

Economy in Newport News
Known for its shipbuilding industry, Newport News also is home to a fast growing technology sector. Other industries include health-care services, manufacturing and wholesale distribution. Large employers include Huntington Ingalls Industries Inc. (the parent company of Newport News Shipbuilding), Riverside Health System, Ferguson Enterprises/Wolseley North America, the Department of Defense and Canon Virginia Inc. Canon is investing $27 million to expand its operation in the city. The city also has several proposed developments in the works, including the $250 million Tech Center development that includes commercial and research enterprises as well as residential housing. The center is a partnership between the city and construction company W.M. Jordan, developer S.J. Collins Enterprises, Jefferson Lab and the Virginia Tech Foundation. Also underway is a $48.2 million, 22-acre mixed-use project in the city’s Southeast Community. Brooks Crossing is being designed as a project that will help renovate this part of the city and so far has attracted a new police precinct and a 30,000-square-foot commercial building. Construction is scheduled to begin this spring.


Economy in Reykjavik
The capital and largest city in Iceland, Reykjavik is a major player in the economic growth of the country. Industries include geothermal energy, seafood, biotech, medical equipment and information technology. Large employers include retail giant Hagar, the marine energy management and research company Marorka, clothing manufacturer 66°North and airlines Air Iceland and Icelandair. In 2011, the city built The Harpa concert hall and conference center, making it more attractive in the meeting planning industry.

Assessing the danger

Organizers of the Dominion Riverrock concert in Richmond in May found they had more than crowds and weather to contend with after someone threw a bottle at reggae singer Frederick “Toots” Hibbert, injuring the 70-year-old performer. In June, Hibbert’s attorneys filed a lawsuit in Richmond Circuit Court asking for $1 million in compensatory damages and $20 million in punitive damages.

This type of incident is just one of the risks that companies must consider when getting commercial liability insurance for an event. “The safest way to protect yourself is to know exactly what it is that you are insuring and who will be coming,” says Chris Burns, CEO of USI Insurance Services in Norfolk. “Typically people don’t think it through.”

Companies hosting events need to think about issues ranging from security risks to vendors. “You need to know who the vendors are and if they are insured. A lot of problems we see come from uninsured vendors,” Burns says, adding that alcoholic beverages are served at many events. “The key focus from the client and agent standpoint is making sure we know who is taking the liquor liability piece.”

R.C. Moore, chairman of TB&R insurance in Richmond, works with a client that holds one of the largest events in Virginia. The organization’s main concern was security, a growing risk for large event organizers since the April bombing at the Boston Marathon. “They wanted to make sure they had adequate coverage,” Moore says, adding that the insurance industry doesn’t currently have a specific product for an occurrence such as the bombing in Boston.

Insurance companies typically use traditional liability coverage in combination with federally backed terrorism coverage for events that draw large crowds. “The [terrorism] coverage is triggered by the secretary of state,” Moore says. “That allows the insurance companies to be reimbursed for acts of terrorism. That, however, was not used in Boston.”

Coverage for events is just one of the topics trending in commercial insurance today. “The biggest overall trend is that the risks our clients are facing are much broader than they have been traditionally,” says Chris Schutt, managing director and Richmond office head for Marsh Inc., an international insurance brokerage and risk management company. “Companies have to identify their risks and establish risk management programs.”

One area of broader risk is cyber privacy liability, which poses a significant risk to all firms. The coverage protects a company’s reputation as well as any type of data breach.  “Many of the standard insurance policies were not designed to address these types of risks,” Schutt says. “Businesses should identify what type of cyber or privacy risks they have.”

This type of coverage is “one of the most important” coverages to have, says John Stanchina, president of Rutherfoord, a Marsh & McLennan Agency company with offices in Roanoke, Richmond, Alexandria and Hampton Roads. Over the last 10 years the coverage has improved. “The pricing has come down,” Stanchina says.

Other industry trends include coverage related to the weather and the economy. The slow economic recovery is generating more activity around the trade credit market. Many companies have to write off account receivables because they are having trouble collecting customer payments. “The trade credit market can insure against that credit risk,” Schutt says. “Accounts receivable are a key cash-flow component that can be protected in a simple and cost-effective manner with a well-designed trade credit program that helps protect against unexpected bad debts, helping to preserve cash flow and protect profitability.”

Regarding weather, the insurance industry is seeing more government involvement in handling claims after an event such as Superstorm Sandy, which devastated the New York and New Jersey coastline in October 2012. “The government is getting involved more and dictating how claims will be handled,” says Burns. “In New York and New Jersey the government had some stringent standards as to how carriers were to handle claims. We hadn’t seen that before.”

The damage from Sandy that occurred in Virginia is not being adjusted as quickly and efficiently as New York and New Jersey “because the government was dictating how some of the claims would be handled,” Burns says. “That is a huge challenge from the carrier perspective for the industry if government is going to dictate how deductibles will be administered.”

Insuring coastal property is always a challenge. In the past, insurance carriers have looked at how far a business is from the bay or the ocean. Now they are adding distances from major and small tributaries as well as rivers and fingers of rivers. “It’s getting elongated as to what is coastal property,” Burns says. “They are doing a remapping of flood zones in a lot of areas.”

Businesses involved in the marine industry also are dealing with the aftermath of the Costa Concordia cruise ship disaster in Italy. The Concordia was the largest marine loss of all time with claims exceeding $1 billion. Thirty-two people lost their lives in the disaster. Some lawsuits are still pending. 

“That had an effect across all the carriers and reinsurance in the marine world,” says Burns. ”You will probably see additional rate increases in January that could cause a stiffening in the marine marketplace.”

Cargo is also becoming an issue for businesses that want to insure goods because of government sanctions on certain countries such as Iran. “The carrier won’t pay that claim based on sanctions,” Burns says. “You have to make sure you know where your containers are going.”
Because of these growing risks, Stanchina believes that more and more businesses are moving from the traditional insurance marketplace to captives, a form of self-insurance.

“This is less about year-to-year rate [changes] and more about control, flexibility and softening the curves,” Stanchina says. “In many cases a captive may not have the least expensive premium in a very soft market, but it will have the least expensive total cost of risk in most cases. It will eliminate the highs of a hard market. It takes some of the roller coaster effect out of the insurance marketplace.”

Markel expands its scope

Anthony Markel sees the recent acquisition of Bermuda-based Alterra Capital Holdings Ltd. as a good fit for Markel Corp. “Alterra’s book of reinsurance business and its technical talent were intriguing,” says Markel who is vice chairman of the Henrico County-based company founded by his grandfather. “They were in a space we didn’t occupy.”

The $3.3 billion Alterra deal, completed in May, was the largest in the company’s history. “We paid a fair price for it. We didn’t steal it,” Markel says. “We did a thorough due diligence.”

Mark Dwelle, director of insurance equity research at RBC Capital Markets in Richmond, believes the deal broadens the scope of Markel Corp. “It gives them a more global platform and deepens their market share in U.S. markets where they had a presence in U.S. specialty insurance,” he says. “It’s fair to say they added a lot of good people and a number of new products. They extended their reach in the U.S. and London.”

Markel Corp. began making acquisitions in 1980 when the company was valued at $7.5 million. Today’s value is more than $7 billion. The Alterra acquisition helps strengthen and diversify the company’s specialty insurance business, officials say. The deal has spawned two new businesses: Markel Global Reinsurance and Markel Global Insurance, which handles large commercial accounts.

With the exception of a few products such as marine coverage, Markel Corp. has “historically stayed with small to medium accounts,” Markel says.

Alterra’s large accounts, which included Fortune 1000 companies, made it very attractive to Markel Corp. “We were comfortable with Alterra’s toehold and strength,” Markel says. “It had some real meat on the bones and talent.”

Before the Alterra deal, Markel Corp. also only had a small book of reinsurance that it inherited in 2000 after acquiring Terra Nova Holdings Ltd. for more than $600 million. “That was a major deal for us at that time,” Markel says. After the acquisition, Terra Nova was rebranded as Markel International.

The Terra Nova deal also gave Markel Corp. entry to the international marketplace. Terra Nova had branches in the United Kingdom and operated in other foreign countries.

The Alterra acquisition expands Markel’s international presence, bringing into the fold three offices in South America and operations in the Far East in addition to its headquarters in Bermuda.

With the new addition, Markel Corp. has approximately $23 billion in combined assets and $6 billion in shareholders’ equity. “Historically Markel usually takes every acquisition and makes it better over some period of time,” Dwelle says. “Sometimes they work quickly; sometimes it takes longer. The first few quarters are the slowest period for earnings and benefits of the deal.”

Markel Corp. reported diluted earnings per share of $2.24 for the second quarter ended June, down from $8.42 in the same quarter last year. Those results, the first since the Alterra deal was finalized, reflected transactions costs and acquisition-related expenses. Operating revenues rose 48.8 percent to $1.03 billion.

“My initial thought is that it’s a good acquisition. Things are going as planned. Time will tell, though,” says Robert Farnam, senior vice president at Keefe, Bruyette & Woods in New York. “It’s fairly early.”

Business incubators ‘mentor companies through their childhood’

Brian Baker hears about plans for new business incubators on a regular basis. Baker, who is director for entrepreneurship at the University of Mary Washington’s Center for Economic Development, serves as president of the board of directors for the Virginia Business Incubation  Association. He estimates nearly 40 incubators operate in the commonwealth, supporting early-stage startups as well as established companies that need help sustaining their operations.

The incubator concept is gaining momentum as these companies “identify the need” for resources and support services that will help them grow, says Baker, who compares the incubation process to parenthood. “Incubators mentor companies through their childhood,” he says.

Far from a new concept — the first opened in New York in 1959 — business incubators didn’t see much growth until the 1980s. The National Business Incubation Association (NBIA) says about 1,250 incubation programs operate in the country today, up from about only a dozen in 1980. Baker believes this growth is being fueled in part by the fact that incubators offer “such an effective process” for companies.

Incubators provide businesses with a variety of services, ranging from helping them refine their business models to providing them with telephone answering service and office equipment. Many incubators also provide training through webinars and seminars as well as access to business experts.

Companies looking at an incubator as a way to support growth want to make sure the arrangement is a good match. For example, some incubators work with special interests, such as life sciences or cybersecurity, while others have a mixed client base. “You’ll have everything from someone who wants to launch an insurance agency, for instance, to someone who wants to do Web design,” Baker says of the mixed-client concept.

Incubator or accelerator
Some people use the terms “business incubators” and “business accelerators” interchangeably, but they represent different concepts.

An incubator normally serves a company that has been founded and is ready to start growing. Once the company has begun to gain traction, it typically moves out of the incubator into its own space. This process can take a few years.

Companies in an accelerator already have proven their sustainability and are looking for a fast-growth cycle and greater returns. “Generally an accelerator is a faster process and a shorter term of residency than an incubator program,” says Susan Henson, regional manager for the Mason Enterprise Center.

Some economic development offices see incubators as a grow-your-own strategy when it comes to improving the local economy. Most companies that graduate from incubation programs tend to locate their businesses in the same region and contribute to the region’s growth and vitality, the NBIA says.

The Mason Enterprise Center, a mixed-use incubator in Leesburg, started in 2011 as a way to enhance economic development by promoting and supporting entrepreneurship in the area. The center currently has 28 resident members and 24 virtual members that don’t have physical space in the facility but do get a business address and mailbox as well as the center’s services and eight hours of conference time.

One of the center’s most recent graduates was a government contractor specializing in information technology services. “They recently moved to larger office space within Leesburg after growing their company and hiring nine additional people,” says Henson.

Henson tries to populate the center with companies that have a scalable business model. “We are looking for companies that are established and generating some revenue or have a viable business concept that needs developing and have sufficient funds to take the company to the next level,” she says. “Growth is what we are looking for.”

VT KnowledgeWorks
Since its inception in 2004 VT KnowledgeWorks in Blacksburg has provided services and space to more than 150 emerging companies. It is known for helping its clients plan, launch and grow their companies. “The difference between us and classical incubators is that we do not evict stable companies from our building,” says executive director Jim Flowers. “Because we are part of a 1 million-square-foot corporate park [the Virginia Tech Corporate Research Center], we simply locate new clients in other buildings in the park.”

One of its most important services is helping aspiring entrepreneurs recognize which ideas can be successful and which are fatally flawed. “The best way to minimize business failures is to prevent the launch of businesses that have a low probability for success,” Flowers says.

Article image
Amanda Jarratt says businesses in Franklin’s incubator
must provide a timeline on how they plan to meet their goals.
Photo by Mark Rhodes

Client companies at the Franklin Business Incubator in Franklin must have a clear set of goals and demonstrate they have a clear understanding of the commitment needed to build a successful enterprise. “They have to provide a timeline on how they plan to achieve their goals,” says Amanda Jarratt, president and CEO of Franklin Southampton Economic Development Inc.

Currently, Franklin’s mixed-use incubator has 28 companies in its four-story building. Eight of the companies moved in last year. The incubator serves businesses involved in engineering, financial services, construction and technology as well as professional artists.

In 2012 the incubator’s business revenues totaled more than $9 million. “We’ve had amazing growth since our inception in 2005,” says Jarratt. “We were one of nine incubators from across the country featured in the Best Practices in Rural Business Incubation by the NBIA.”

Focus on science, engineering
The Dominion Resources Innovation Center in Ashland also has seen growth. The center has nine offices and two wet labs as well as a medical-instrument assembly area. All of its resident companies are involved in science or engineering.

Several member companies are headed by executives with doctorates and “basically need guidance on how to raise capital,” says William Daughtrey, the center’s entrepreneur-in-residence.

Most of the center’s members are developing knowledge-based products such as medical instruments. “All of the Ph.D.s had developed their product as part of their dissertation and are now commercializing their projects,” says Daughtrey.

Before accepting a company into the program, Daughtrey meets with its leaders to determine whether their business plan is viable.

“I had one CPA come to me with a great idea for a medical device, but he didn’t have a clue where he was going with it,” he says. “It doesn’t make sense for me to do the work they need to do if they don’t understand the industry.”

Virginia Beach company originated from a family vacation to the resort city

Anyone who is in the market for outdoor table tennis equipment, patio furniture or a tricycle for the kids has probably come in contact with the products of Virginia Beach-based Kettler International Inc. “Nationally our leading business is table tennis, followed by tricycles,” says Stephen Mannix, the company’s vice president of finance. “Locally in Tidewater our leading business is patio furniture.”

A sister company of Heinz Kettler GmbH in Ense-Parsit, Germany, Kettler International was founded by Heinz Kettler who wanted to establish a U.S. presence for his company. He learned about Virginia Beach on a family vacation and liked the area because of the availability of land, the business environment and the city’s proximity to the Port of Virginia.

“Virginia Beach also has a large workforce,” says Mannix. “It’s a good mix of people. Since our business in the U.S. includes Canada and Latin America, we are looking for knowledge and experiences beyond the region.”

Kettler started the company in 1981 with a wholesale operation and several stores in Virginia Beach, Norfolk and Newport News. He closed all of the company’s stores except one in Virginia Beach when he decided to concentrate on the wholesale end of the business.Kettler International’s Stephen Mannix shows off a tricycle amid the company’s offerings of patio furnishings.

The company currently has 35 employees in Virginia Beach as well as 140,000 square feet of warehouse space and 6,000 feet of office space. Products include table tennis equipment, patio furniture, bikes, toys and fitness equipment.

The company sells to specialty stores such as C.P. Dean in Richmond and Kinder Haus Toys in Arlington. Products also are sold through the company’s website, www.kettlerusa.com, and large online retailers such as Amazon. Smaller online retailers carry their products as well. 

The popularity of e-commerce has changed the company’s business model. “Now we have more direct contact with consumers,” Mannix says. “We always make it easy and quick for a person to find a local retailer.”

The company handles sales, marketing and warehousing along with parts and service for the Americas. Its sister company in Germany, now headed by the founder’s daughter, Karin Kettler, is focused on manufacturing and product development.

The Virginia Beach office sells to Canada and Latin American countries, including Colombia, Chile, Panama, Guatemala, the Dominican Republic and Mexico. “Mexico is our number one market in Latin America,” Mannix says, noting the company serves many of its customers through its Spanish-language site, www.kettlerlatinoamerica.com. “We are developing relationships in Chile, Colombia and Panama.”

The company also has a warehouse in Brighton, Ontario, that ships products to Canadian customers. “Everything is shipped out of Canada except patio furniture, which is shipped from Virginia Beach,” Mannix says. He adds that the company “built the website www.kettlercanada.com to support” its Canadian business.

The Toronto area is one of the company’s main sales areas in Canada. “Canada is a very large country but the population is very concentrated in Ontario and Quebec,” Mannix says. “Toronto is a great market for toys and table tennis. We have good retailers there.”

The company’s main sales area in the U.S. stretches from Washington, D.C., to New England. “We also do a good business in California and Texas,” Mannix says. “Also, a lot of our products that are geared toward the outdoors do well for us in coastal areas.”

Mannix finds that styles and tastes differ in regions of Canada. French-speaking Quebec is more Europe-oriented than other Canadian provinces, he says. “It’s also multi-lingual. Sometimes you will have folks that are not fluent in English.”

He believes that doing business in Canada is more personal than it is in the U.S. “Retailers know each other on a national basis, and they know their suppliers more than retailers in the U.S.,” he says. “For example, a retailer in Toronto may be very aware of a retailer in Vancouver. The marketplace is more intimate.”  

Economy in Toronto
Canada’s largest city, Toronto, is now the fourth largest municipality in North America, following Mexico City, New York and Los Angeles. The city has a large media presence that includes several Canadian networks such as CBC and CTV. It also is home to the Toronto Stock Exchange as well as the majority of Canada’s largest law practices and top 10 accounting firms. Film and television production helps boost the economy. In 2012 major productions topped $1 billion, a 6 percent increase over 2011. The city also is a hub for biotech and technology firms. Large companies based in the area include luxury hotel operators Four Seasons Hotel and Fairmont Hotels and Resorts.

What to see in Toronto
Toronto is known as a city of skyscrapers, with 63 tall buildings. That number is expected to grow 40 percent by 2016. One of the most prominent buildings on the city’s skyline is the CN Tower, named one of the Seven Wonders of the Modern World by the American Society of Civil Engineers. The building, looming 1,168 feet in the sky, includes the attraction The EdgeWalk at the CN Tower, where people can walk on the edge of the man-made wonder. Other points of interest include the St. Lawrence Market in the historic Old Town neighborhood and the Eaton Centre, with a similar design to the Galleria in Milan, Italy. The Toronto Zoo with over 5,000 animals and the Royal Ontario Museum are popular tourist stops as well. The city’s Broadway-like strip includes the Elgin and Winter Garden theatres.

Economy in Virginia Beach
With a population of more than 447,000, Virginia Beach is the 39th largest city in the U.S. Its main economic sectors range from agribusiness and construction to the military and tourism. One of the city’s big economic draws is the $206 million, 515,000-square-foot Virginia Beach Convention Center. The greater Virginia Beach area also has seven of the world’s top 10 defense-related companies and 11 major military installations, including Naval Air Station Oceana and NASA’s Langley Research Center. The Hampton Roads area has four Fortune 500 companies — transportation giant Norfolk-Southern, Dollar Tree Stores, Huntington Ingalls Industries and Smithfield Foods. The state recently announced that PRUFREX Innovative Power Products GmbH, which will supply ignition components for its U.S. customers, is investing $7.33 million to open its first U.S. manufacturing facility and U.S. headquarters in Virginia Beach.

What to see in Virginia Beach
Virginia Beach’s 35 miles of shoreline make it one of America’s favorite destinations. The boardwalk, originally made of wood in 1888, is now three miles long. Some favorite destinations include the Virginia Aquarium & Marine Science Center, the largest aquarium in the state, and First Landing State Park. The 8,500-acre reserve of Back Bay National Wildlife Refuge is made up of barrier islands, dunes and freshwater marshes and includes False Cape State Park. Both are home to wild horses and American bald eagles.  The Association for Research and Enlightenment attracts people interested in the late Edgar Cayce, known as the “Father of Holistic Medicine.”

Newport News company is in an expansive mood

Newport News-based Perfect Commerce is having a near perfect year, thanks to an expansion in operations. The software company added four data centers in Chicago, England, Australia and Germany as well as four operation centers in England, Germany, New Zealand, and India. It also launched satellite offices in Malaysia, the Philippines and China.

“In the first half of this year we brought on over 30 new customers and increased our user count in Europe and Asia-Pacific by over 50 percent,” says Hampton Wall, the company’s president and CEO. “The additions of the new data and operation centers come as a direct result of this growth and are necessary to support our ability to provide the high levels of service and customer care that Perfect is known for.”

The company provides procurement, sourcing and supplier network software and services. Its software is available in 12 languages.

When Wall and other investors bought the company in 2007, it had eight locations around the globe but was losing customers. Wall closed all five of the company’s U.S. offices and opened an office in Newport News that would serve as the company’s headquarters. He consolidated the three offices overseas into a European headquarters in Paris. “It took three years,” he says, noting that the company had a 99 percent renewal rate in 2010. “We were smaller, leaner and good at taking care of our customers. We were dependable and focused on customer care and retention.”

Perfect Commerce has a direct sales force and also works with partners/resellers around the globe. “You have to have local people who speak the local language and have a footprint in those countries,” Wall says, adding that part of the company’s growth can be attributed to the absorption of partnerships. “We absorbed partners in New Zealand, Australia and Germany.”

The company now has operations in seven countries — the U.S., England, New Zealand, Australia, Germany, France and India. Revenues rose 40 percent the first eight months of 2013 compared with the same time period in 2012.
Wall is already eyeing further expansions. “Asia is the next frontier,” he says. 


 

HCA deal helps Lumos expand to Richmond area

Central Virginia is new territory for Lumos Networks now that the Waynesboro-based telecommunications company signed a multiyear Ethernet network contract with HCA Virginia in Richmond. The company’s relationship with HCA dates back to 2004 when it began offering voice services to LewisGale Medical Center in Salem.

The contract will increase to 43 the number of HCA locations where Lumos provides fiber services.  “In another 25 locations we will be providing access,” says Joseph McCourt, executive vice president and chief revenue officer for Lumos Networks.

Talks between Lumos and HCA began in June 2012. The new 100-mile fiber network will connect 11 HCA Virginia facilities along with satellite offices and critical-care locations to HCA’s Richmond Data Center.

McCourt is excited about adding the Richmond area to the Lumos network. “Our discussion with HCA was one of the keys to coming to Richmond,” he says. “As a company that is in growth mode and expanding, it made sense to expand to Richmond. Having an anchor tenant like HCA made it an easy decision.”

Lumos plans to provide services to other companies in the area as well. “Our business doesn’t support just HCA,” he says, adding that Lumos is also talking to HCA about expanding its relationship out of the current footprint.

The company, which was part of Waynesboro-based NTELOS Holdings Corp. until 2011, provides communications infrastructure that helps businesses tap into cloud computing through broadband connections. The majority of the company’s customers are in Virginia, West Virginia and Pennsylvania. It also has customers in Kentucky, Ohio and Maryland. “That makes Lumos unique in the depth and breadth of network in a rural area,” McCourt says.

Customers include businesses involved in health care, higher education and finance as well as state and local governments. Several major national wireless carriers rely on Lumos to provide services to them so they can offer services to their customers.

Lumos’ business is growing every quarter. The majority of the company’s revenues are now coming from strategic data and “it’s our goal to continue that trend,” McCourt says.

College is expanding programs to meet demand

Troy Simpson welcomed 54 freshmen in August to the machining program at Danville Community College. That enrollment is more than twice the capacity for freshmen in last year’s program. “We still had students that couldn’t get in and are waitlisted,” says Simpson, associate professor of precision machining technology. 

The demand for program graduates continues to increase and until this school year the college had to turn away students each year because of limited capacity.  “There are more jobs than students to fill the jobs,” Simpson says. “We have employers calling every week looking for people with these skills.”

Earlier this year the General Assembly awarded the school $3.7 million for expansion of the machining and welding programs. The money is being used to renovate a 20,000-square-foot building that now houses several programs. Plus, it will cover construction of  a new, 7,500-square-foot building behind the current facility. The expansion also includes an additional $2.5 million in new technology and equipment that’s not part of the state award.

The machining program was able to increase capacity this semester because it moved into temporary renovated space, hired two additional instructors and added over $1 million in new equipment.

The expansion initiative was started by recently retired Danville Community College President Carlyle Ramsey. He wanted to double the number of students enrolled in the machining and welding programs. Before this school year, the school’s maximum capacity for the machining program was 52, including 26 freshman and 26 sophomores. The expansion will increase the program’s total capacity to 104.

The first phase of the expansion project is underway with the machining department relocating to temporary space until the renovations are complete. Three programs — welding, graphics and building trades — will move to the new building once that is completed. The full expansion will take approximately two years. “We will be the largest machining program in the community college system in Virginia,” Simpson says.

The college already has more than 120 students in the pipeline for the program. About 20 are high school students from Pittsylvania County who have earned college credits through dual enrollment. “That is unheard of,” Simpson says of the high number of students that want to enroll.

The earning potential for graduates of the program is high. Starting pay averages between $17 and $24 per hour, he adds. “There is a huge demand for people with highly technical skills. The jobs are there so the workforce has to be there.”

Simpson believes the expansion demonstrates that Southern Virginia understands the needs of the manufacturers. “This is a huge economic development opportunity,” he says. “We are positioning ourselves to provide the skills that future manufacturing companies are looking for.”

New class puts medical school at full capacity

The three-year-old Virginia Tech Carilion School of Medicine in Roanoke has reached a major milestone: full student capacity.

The school’s 168 students include the inaugural class, which will graduate next May. “This is very exciting,” says Dean Cynda Johnson. “We look back and I can’t believe we already have our full house. In retrospect it came very quickly.”

The 42 students who  started this school year will graduate in 2017. The number of students in the class is purposeful. “We have a problem-based, patient-centered curriculum with six groups of seven students each,” says Johnson. “Our students work with patient cases in their groups.”

Nearly 2,900 students applied to be part of this year’s entering class. The school accepted fewer than 2 percent. “We give offers to fewer than 100 students to get the class of 42,” says Johnson, noting that some students receiving offers choose to attend other medical schools.

Research is one of the mainstays of the medical school. This school year more than half — 24 — of the entering class members have exceptional research experience, including articles published in journals and in some cases patents from their research. “Many have advanced degrees, some have worked in research labs, and some have worked for the National Institutes of Health,” Johnson says.

The number of incoming students with exceptional research experience this year was almost double the number of last year’s class. The school believes that is one reason these students were looking for a research-focused school. “We want them to use research principles to enhance their practice skills,” Johnson says. “We want them to be scientists/physicians because we know that almost all go to medical school with the intention of practicing medicine. Research gives physicians another tool.”

The school’s faculty draws from Carilion Clinic and Virginia Tech. “We didn’t have to hire new people from the outside when we opened,” Johnson says, adding that after the 2014 class graduates, the school will have full accreditation, which will be retroactive to the first graduating class. The school currently has provisional accreditation. “We are on the home stretch,” Johnson says.