International Trade and Diplomacy Office (ITDO

OVERVIEW

We are growing Utah’s economy through: 1. Foreign Direct Investment (FDI): facilitating FDI opportunities in Utah through the promotion of Utah’s dedicated workforce and vibrant economy to foreign investors . 2 . Global Market Development: assisting Utah businesses to secure international business contacts and increase goods and service exports . 3 . Diplomacy: facilitating diplomacy meetings for the state and leveraging diplomatic contacts to develop and expand foreign markets for Utah .

Foreign Direct Investment

Utah has a stable and business friendly climate . It consistently receives recognition for its low operating costs, high economic growth and excellent governance . Innovation, industry, education and good governance culminate in Utah to create a diverse and thriving economy that is now home to multiple world-class corporations . The continued importance of the U .S . market to global firms will continue to facilitate inward investment opportunities into the various States . Utah’s unique advantages provide excellent opportunities to bring many of those global companies here .

Currently, there are 189 foreign firms from 29 countries doing business in Utah . Together, they employ over 36,000 Utahns across various industries . The top five countries for the number of foreign firms doing business in Utah represent 63 percent of the total foreign direct investment within Utah . These countries and the number of establishments in Utah are: Canada (37), the United Kingdom (25), Japan (20), Germany (19), and France (18) .

In the past year, our international trade strategy has continued to support export expansion while placing greater emphasis on increasing foreign direct investment in Utah . International Trade and Diplomacy Office (ITDO) has trade representatives in the European Union, China, Mexico and Israel . We continue to leverage diplomatic ties and connections with international site selectors to attract new companies to Utah .

FY2015 international inward investment highlights include Oemeta, a German-based industrial machining company, which announced they will build a high-tech manufacturing plant in Salt Lake County . Over the next 7 years, the company is expected to create 58 new jobs, add approximately $560,000 in new tax revenues and invest $5 million in capital .

Israel-based Micronet Enertec Technologies Inc . acquired Utah-based Beijer Electronics Inc ., makers of MRM/FM rugged tablets . The $6 .5 million acquisition included $4 .85 million of bank funding and $1 .65 million though Micronet’s own independent resources .

“This acquisition is a major step forward for us,” said David Lucatz, CEO of Micronet Enertec . “It provides a solid marketing and operating base in the U .S, our largest market . Overnight, it dramatically expands our U .S client base . We expect it to be accretive to earnings immediately . ”

The recent rejuvenation of Salt Lake City’s foreign trade zone (FTZ) provides significant opportunities for both Utah companies and foreign firms by providing relief from tariffs and duties on international sales . Companies may establish foreign trade subzones within a 60-mile radius of the port of entry . Red Wing Shoe Company activated their foreign trade subzone in June, in efforts to improve their international supply chain operations, increase efficiency and create additional employment opportunities in Utah .

Export Development

More than 70 percent of the world’s purchasing power (and 95 percent of the world’s population) is located outside of the United States, making the export of Utah’s high-quality, innovative goods critical for long-term growth . On average, businesses that export experience faster sales, increased job creation and higher employee wages over non-exporting businesses . Additionally, businesses that export are more stable and able to weather economic downturns more successfully as they sell to a diverse portfolio of global markets . Exporting adds value to Utah’s economy; one traded manufactured job supports three jobs in the local economy . Currently, Utah businesses that export employ more than 320,000 Utahns .

25 Utah Annual Exports

Billions of Dollars

20

15

10

5 $19.0

$10.3

$4.6 $13.8

$5.8 $6.4 $19.3

$16.1

$6.8 $7.6 $12.3

$8.0

0

2009 2010 2011

Total Exports 2012 2013

Value-add Exports 2014

*The decline in total exports from 2012-14 can be attributed to common business cycle fluctuations in commodity markets. More specifically, the value of precious metals (i.e. gold) decreased significantly during 20132014. Precious metals removed, Utah’s value-added exports increased by 17.6% from 2012 and 2014.

Governor Herbert set the goal to increase Utah’s total exports by $1 .4 billion by 2019, with a particular emphasis on value-added exports . That will bring Utah’s total value-added exports to $9 billion . At the end of 2014, value-added exports reached $8 billion, 17 .6 percent growth since 2012 . GOED focused on reaching the Governor’s goal through export promotion activities on value-added goods and services in efforts to help Utah companies expand into international markets . These activities include trade missions, trade shows, and assisting companies arrange independent trips which help Utah businesses across the state secure international business contacts, partners, and distributors that will lead to sales . In partnership with World Trade Center Utah and the U .S . Commercial Service, the State organized the following FY2015 events to help Utah companies find potential distribution partners/buyers to increase sales, as well as promote Utah’s business climate to foreign direct investment candidates .

FY2015 Trade Missions:

• China (Beijing, Shanghai) • Brazil (Rio de Janerio, São Paulo) • Japan (Tokyo, Osaka) • Western Europe (Amsterdam, Brussels, Saarbrucken, Paris)

Fifty-eight Utah businesses and organizations participated in all, and Governor Herbert personally led the missions to Western Europe and Brazil .

Governor Herbert meets with the Governor of Rio de Janeiro, Luiz Fernando de Souza (Pezão) during Brazil Trade Mission.

Justin Harding, Chief of Staff, meets with Chuck and Michelle Taylor of SyberJet Aircraft in the Utah Booth at Paris Air Show 2015.

FY2015 International Trade Shows:

• Arab Health - United Arab Emirates (Medical Devices/Healthcare) • CeBIT - Germany (IT & Software Development) • Paris Air Show - France (Aerospace)

The state, in cooperation with the U .S . Small Business Administration, initiated a strategy to host Utah booths at leading international trade shows to help smaller companies have a presence, find partners or buyers, and boost their visibility within the industry . The three shows above provided opportunities for the 10 small Utah companies that attended .

Diplomacy

The International Trade and Diplomacy Office also facilitates diplomacy for the state and leverages diplomatic contacts to develop and expand foreign markets for Utah . ITDO hosts many foreign trade visitors and business representatives each year . The State benefits from international promotion of Utah’s business community and attraction of international investment in Utah by developing partnerships and alliances through diplomatic relations . During fiscal

year 2015, ITDO hosted 62 delegations including heads of state, ambassadors, and other diplomats from the following countries:

ITDO in collaboration with various partners, such as the Salt Lake Chamber and the World Trade Center of Utah launched the Utah Global Forum in September 2014 . The Utah Global Forum is a first of the kind for the State; the event drew business leaders together to discuss global business expansion and foreign direct investment to the state . This first-ever event drew approximately 450 participants and is expected to grow in future years .

Please visit business.utah.gov/international for additional information about the International Trade and Diplomacy Office or you may contact:

Brett Heimburger,

Director, International Trade and Diplomacy Office bheimburger@utah.gov or 801-538-8651