Greater Cincinnati Northern Kentucky Climate for ... · Both inbound and outbound look for access to customers “Inbound” refers to European companies who situate operations or

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Clark Schaefer Hackett is a Top 60 certified public accounting firm providing comprehensive assurance, tax, and consulting services through six offices in Ohio. For 75 years, our accountants have served as the primary trusted advisors to the businesses, organizations, and individuals that form the backbone of the region’s economy.

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For permission to cite please contact Anne Cappel, European-American Chamber of Commerce, [email protected] or Chad Person, Director of Marketing, Clark Schaefer Hackett, [email protected].

The European-American Chamber of Commerce and Clark Schaefer Hackett thank the individuals who completed the survey. We also gratefully acknowledge the work of Keri Grubbs, Digital Marketing Strategist, Elena Parthenakis and Jessica Brown, Industry Marketing Specialists.

Advisors to this project include Dennis McLaughlin, Shareholder at Clark Schaefer Hackett and board member of the EACC, and Sean McGrory, Shareholder at Clark Schaefer Hackett.

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January 28, 2014

Dear Colleague:

It is our pleasure to share with you this first-ever assessment of the Greater Cincinnati regional climate for transatlantic business development and opportunities. This report, based on survey responses, is a starting point for discussions about how we, as a region, can collaborate to strengthen transatlantic business opportunities between Europe and the Greater Cincinnati/Northern Kentucky region.

The findings here confirm what we have learned in our discussions with the European-American Chamber of Commerce members and others. For European companies, Greater Cincinnati is a great place to do business and expand their footprint in North America. For companies based here, Europe presents growth opportunities beyond those within the United States.

This first report is a baseline. We plan to continue the surveys to track improvements in the climate for transatlantic business development and to identify further areas of focus as Agenda 360 and other regional efforts, including ours, work to enhance the Greater Cincinnati economy.

Thank you for your attention and your engagement in our shared goals to maintain Greater Cincinnati’s leadership in transatlantic business development.

Sincerely,

Anne Cappel Dennis McLaughlin, CPA, ABV, CVAExecutive Director Shareholder-in-ChargeThe European-American Manufacturing Industry GroupChamber of Commerce (EACC) Clark Schaefer Hackett Board Member, EACC

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ContentsSummary & Key Findings 3

The rationale for better understanding of transatlantic business opportunities 4

This is the first study of a series 4

Vast majority recommend Cincinnati 5

The transatlantic market predicts growth 6

Both inbound and outbound look for access to customers 8

Has Cincinnati met your expectations? 9

“Inbound” companies seek better air travel, skilled labor 9

“Outbound” companies want better air travel; language skills for managers; and assistance with risk assessment 10

Concerns 12

The loss of flights 12

Access to skilled labor 12

Other challenges 13

European-American Chamber of Commerce-Cincinnati 14

General comments about EACC 14

Specific instances of EACC assistance 15

Suggestions for additional EACC activity 15

Other thoughts 16

Free Trade Negotiations 16

General statements seeking “Fair” Trade 16

Specific suggestions or concerns 17

Conclusion 17

Methods 18

Appendix A: Additional Graphs 20

Appendix B: Why firms develop transatlantic trade 23

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Summary & Key FindingsThis first-ever survey of why European firms select the Cincinnati region for their North American business development – and why regional firms expand to encompass business in Europe. This is part of an overall strategy to expand business opportunities in this region for international firms and for exports to Europe.

Nine in ten companies recommend Cincinnati as a location for others engaged in transatlantic business development. This is an overwhelming endorsement for the Greater Cincinnati region as a location to reach U.S./North American markets and for export by regional firms to European customers.

Among all companies engaged in transatlantic business opportunities half anticipate growth in the Greater Cincinnati region in the coming three to five years.

European companies select Cincinnati because of its easy access to customers.

Regional companies expand to Europe to gain access to European customers.

Companies here engaged in transatlantic business opportunities find that Cincinnati meets business and quality-of-life expectations, with the exception of the air travel concerns and for one-third of companies, access to skilled labor.

Both directions for transatlantic trade consider improvement in access to air travel essential for business success. Some European companies doing business in the Greater Cincinnati region seek greater access to skilled labor.

Survey participants know about and praise the EACC. Several offered suggestions for additional services, including language instruction. A key element for six in ten of the regional companies doing business in Europe is greater assistance assessing risk and opportunity for expansion in Europe.

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The rationale for better understanding of transatlantic business opportunitiesAgenda 360 for Cincinnati calls for additional business growth in this region, including efforts to leverage new and existing economic clusters; creating a world-class health center; and protecting air service1. The EACC has a potentially vital role in this effort.

Among the possible strategies for Agenda 360 is to leverage our region’s existing strengths in transatlantic business development in order to attract and retain European investments and to support further growth for Greater Cincinnati companies through European expansion.

Our region is already strong in transatlantic business development. The Cincinnati USA Partnership for Economic Development stated in 2011 that 250 European companies have operations in the Greater Cincinnati area, offering 30,000 jobs and 290 facilities.2 There are an additional 150 or so companies from other parts of the world that also have operations in Cincinnati.3 Through this exploration of what brings international companies to Cincinnati and what propels existing companies here to expand into Europe, we will add additional capacity to drive forward the regional, collaborative goals for continued economic growth.

This is the first study of a series This report, Regional Climate for Transatlantic Business Development, is being released at the EACC Transatlantic Outlook on January 28, 2014. Our goals for the summit – and therefore for this study – are:

• To develop more transatlantic business opportunities for companies in Greater Cincinnati and to attract more European companies to this region.

• Identify impediments to expansion that can be addressed through leadership, policy, or investment.

• Provide quantitative and qualitative information about “inbound” and “outbound” international business within the Greater Cincinnati region that will help achieve the first two goals.

• Provide a gap analysis to assist the European-American Chamber of Commerce of Cincinnati to create programs and platforms that respond to what business executives identify as critical needs to continue to grow in this area.

• Inform policy makers, decision-makers and media about transatlantic business opportunities and its vital role in the Greater Cincinnati economy.

__________________

1 http://www.agenda360.org/agenda360.aspx?menu_id=303&id=134132 http://www.cincinnatiusa.org/economic-development-news/economic-development-reports/european-investment-companies.pdf3 http://www.cincinnatiusa.org/uploadedFiles/Econ/Documents/L012906_Txt_REV_8_1_13_Lo-Res.pdf

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Vast majority recommend CincinnatiCombined, 89 percent of respondents engaged in transatlantic business development in the Greater Cincinnati region have or would recommend Cincinnati to others.

Figure 1: Responses to “Would you recommend the Greater Cincinnati region to another company as a good place for business opportunities between Europe and the United States?”

Survey responses included these as reasons why Cincinnati is great.

The infrastructure of supplier companies is going very well. Local support of a German business is great!

Local government has been very supportive to the company.

U.S. raw material market information is great for our trend analysis and forecasting.

The EACC has been a great resource for us as we expand into Europe.

I already have. 39%

Of course. 50%

I might. 9%

No way. 2%

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The transatlantic market predicts growthNearly half (49 percent) of regional companies engaged in transatlantic business development anticipate growth in the Greater Cincinnati region in the coming three to five years. Another quarter (24 percent) project growth elsewhere in the U.S.

Figure 2: Where do you expect your company will grow by 2018?

Cincinnati region 49%

Other region in U.S. 24%

Will grow but not in U.S.

27%

Nearly eight in ten (78 percent) plan to add management staff in the Cincinnati region and 39 percent project increasing manufacturing in this region.

Figure 3: Where do you project manufacturing growth by 2018?

Cincinnati region 39%

Other region in U.S. 35%


26%

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__________________

4 For one example, see McKinsey Global Institute. 2012. Manufacturing the Future: The Next Era of Global Growth and Innovation. Accessed June 2013. http://www.mckinsey.com/insights/manufacturing/the_future_of_manufacturing

Sales and distribution, however, are projected to increase mostly outside of the U.S., strengthening this region’s net impact from exports.

Figure 4: Where do you anticipate expansion of sales? Of distribution?

14% 14%

25% 18%

61% 68%

Sales Distribution

Where do you anticipate expansion of:


Other region in U.S.

Cincinnati region

These projections of growth indicate strong potential for future transatlantic engagement in the Greater Cincinnati region. The combination suggests that management employment and manufacturing will increase in this region, with sales to other regions of the U.S. and abroad.

Other research has shown that elements critical to continued international business growth include services and resources available to companies. These range from direct business services such as legal counsel, accounting, and banking to essential aspects of doing business, such as access to transportation networks, the skills of people living in the region, and even the quality of life for families.4

The next sections of this report cover some of these features.

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Both inbound and outbound look for access to customers“Inbound” refers to European companies who situate operations or offices in Cincinnati to do business in North America. “Outbound” refers to companies in the U.S. that have sales, operations, or offices in Europe.

In this project, the decision to engage in transatlantic business development puts top priority on reaching customers. This is true for European companies that locate in the Cincinnati region and for U.S.-based companies that expand into Europe. Additional considerations also play a role.

For European companies establishing operations in the Greater Cincinnati region, priorities fall into five categories.

• Access to customers, including location near a key customer or location centrally in the U.S.

• Ease of travel within the U.S. and Europe, which were each critical to 28 percent of respondents.

• Access to talent, including skilled labor force, management talent, and qualified resources such as accounting and legal counsel.

• Access to other businesses, such as distributors, suppliers, business networks or being part of a “cluster” of like-companies.

• Cincinnati’s “welcome mat” including the quality of life in the region, services for expatriate families and the region’s overall reputation.

Companies in Greater Cincinnati/Northern Kentucky have three groups of reasons for doing business with Europe, with access to customers leading the way.

• Access to customers in Europe, key client or customer, plus strategic analysis of market opportunities and being part of a business network.

• Access to talent, including local leadership resources to assist in the decision-making, plus language skills to facilitate market entry. This group also includes access to qualified resources in the Cincinnati region for banking, legal counsel, and so on, as well as access to skilled labor and management talent in Europe.

• Other factors, which include access to distributors and suppliers, ease of travel to Europe, and regional assistance to help families prepare for the expatriate experience.

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Has Cincinnati met your expectations?

Cincinnati has over-delivered. We had no real expectations, as we just purchased a company in Cincinnati, but now we are really happy to be here.

Yes, it is a great area to live and do business. The business network is very valuable and a great help in different areas.

Yes, we have continued to grow our business within the United States and strengthened our export business as well.

Yes, skilled workforce at reasonable wages in the automotive industry.

“Inbound” companies seek better air travel, skilled laborFor nearly 70 percent that needed air travel to the U.S. or air travel to Europe, the Cincinnati/Covington Airport is no longer meeting their needs. A third (35%) of respondents also find that the region does not meet their needs for skilled labor.

Table 1: Location decision factors by whether region does not or does meet needs

Factor Inadequate for business needs

Region meets business needs

Reliable options for business travel to Europe 68% 32%

Reliable options for business travel within U.S. 67% 33%

Skilled labor force available in the region 31% 69%

Ease of access to U.S. customers* 23% 77%

Location near distributors 17% 83%

Management executive talent in the region 15% 85%

Resources to help expatriate families transition 9% 91%

A “cluster” of related companies that benefit from being near each other

8% 92%

Ease of access to suppliers 8% 92%

Cincinnati’s high quality of life 6% 94%

Being near a key client or customer 6% 94%

Qualified resources (accounting, legal, banking) 100%

An accessible international business network 100%

* Correlates with region’s inadequate services currently for air travel. Shading indicates groupings of factors based on similar percentages.

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“Outbound” companies want better air travel; language skills for managers; and assistance with risk assessmentIn each of seven different topic areas, companies identified the elements most important for business success in the next three to five years. A majority of “outbound” companies selected transatlantic flights, language instruction, and assistance with risk assessment.

Table 2: Top-rated areas where “Outbound” companies assign top rank

Percentage Ranking as #1 in its group

Average for this item*

Item ranked “first” in group**

70% 1.3Transatlantic flights from Cincinnati/Covington airport {Group: Air travel}

60% 1.4Language instruction for U.S. managers to be assigned to Europe {Group: Acclimatization}

60% 2.0Assessing risk and opportunity for expansion in Europe {Group: European market knowledge}

50% 1.7 Sales abroad, not in North America {Group: Sales}

50% 1.7Access to expertise about establishing a sales/distribution model in Europe to build sustainability {Group: Analytics for growth}

40% 1.7 Business taxes and fees {Group: Taxation}

40% 2.1Access to legal expertise for working in U.S. and Europe {Group: Qualified resources}

* Reflects distribution of other ranks. A higher average means more ranks of 2 compared with another item ranked #1.** Each group had two to four items. Ten individuals completed this portion of the survey.Shading indicates groupings of factors based on similar percentages of respondents indicating the item as #1 in its group.

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“Outbound” survey participants reported various degrees of success in their transatlantic business development.

We do significant business in Europe and while there are variances, for the most part we have found it to be similar to everywhere else that we work.

We work through distributors abroad, whereas we have a direct sales model domestically. The indirect model works well in Europe because of the language and cultural diversity. However, by working indirectly, we sacrifice some customer intimacy.

Doing business in Europe has been both rewarding and challenging for our company. I believe, however, that if we hadn’t expanded into Europe, our growth opportunities in North America as well as Europe would have suffered.

Some “Outbound” participants expressed frustration with working with European markets.

Purely price buyers with little regard for value added. Slow to pay.

Finding local resources in Europe with an American work ethic and commitment to customer service has been our biggest challenge. Expats are too expensive and often do not have the required language or cultural skills.

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For the most part, our expectations have been met, but the changes to the Delta hub have been a challenge for us.

Yes, overall it has been a good place to develop our North American headquarters. The only improvement would be to the airport and availability to more international flights and lower fares.

Yes, although decline in international flights has hurt the location. Meetings are being shifted to our second office in Chicago from headquarters in Cincinnati due to difficulty of getting to Cincinnati from Europe.

Cincinnati has met our expectations except for travel options to Europe and within the U.S. The former Delta hub was a key element in our decision to locate in Cincinnati. We are very disappointed in the level of service currently available.

The lack of CVG being a hub and direct connection to Europe has hurt us.

Travel is the key issue. Other than that, we’re happy here.

Access to labor is a major concern for the company. We …are finding it hard to find skilled service employees. However, these individuals do not have to be based in Cincinnati. In fact, looking outside of the area has yielded a better group of potential employees than in this area.

Finding technical operational people is very difficult.

Finding skilled and motivated employees for key positions is very hard.

Concerns The loss of flights

71 percent of “inbound” and 70 percent of “outbound” respondents indicated air travel as important to their business success. In open-ended questions, the loss of flights from CVG appeared repeatedly as a concern.

Access to skilled labor

Approximately one-third (35 percent) of “inbound” companies mentioned access to skilled labor as an area of concern. This is a higher share than the 17 percent of respondents concerned about access to skilled labor in Clark Schaefer Hackett’s annual manufacturing survey, released in fall 2013.

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Many parts are hard to get here in the region for a reasonable price. Finding supplier who provides good quality for a reasonable price in fabrication or machining is almost impossible.

Finding management talent with international experience is a challenge.

Other challenges

For some companies, there are additional challenges as well. These are isolated examples among participants.

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European-American Chamber of Commerce-CincinnatiA majority of survey participants know about and attend European-American Chamber of Commerce (EACC) workshops. However, fewer participants know about other EACC services, including linkages with European trade agencies, currency or banking solutions, and consulting services.

Figure 5: Participants’ use of or awareness of EACC services Number of respondents. N = 36

20 18

9 12

5

14 16

22 20

24

2 2 5 4

7

Workshops Summits Links to European

trade agencies

and funders

Currency and banking

solutions

Consulting services

Title

Did not know about

Have heard of, do not use

Know about and use

Many survey participants offered accolades for the EACC.

General comments about EACC

Support of EACC has been great.

The EACC has been a great resource for us as we expand into Europe.

Cooperation with EACC has been productive.

Excellent roundtables.

Good general information source.

Platform for networking.

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Specific instances of EACC assistance

The EACC is a great source for advice and help to point into the correct direction, if services are needed, or just to connect with companies with similar structure for information exchange.

I have interacted with some of your members from the legal and banking communities.

EACC introduced us to a French accounting specialist in Chicago and we continue to use them.

Helped organize the resources to form the U.S. subsidiary.

EACC is important for networking, job opportunities, and growth opportunities with other companies.

EACC put me in direct contact with someone in Finland for business development in Russia.

The most valuable aspects have been the country briefings to learn about the advantages and disadvantages of certain country markets to global operations.

The general networking has been helpful to talk with others about their international experiences and operations.

Company tours to hear presentations about how specific successful companies handle international business and business issues.

Suggestions for additional EACC activity

We are in the early stages of doing business in Europe. Our challenges include language issues, contract issues for the European culture, pricing issues, regulatory issues (among our products, we sell cleaning chemicals and the regulations on chemicals in Europe are changing).

How restrictive will be the environmental regulation like REACH and other initiatives coming out of the ECHA? Will they continue to favor native producers to the point where it becomes difficult for U.S. producers to compete?

A job market for mechanics would be good. Organizing a job fair with universities or colleges.

Growth of the Over the Rhine area could be an important factor to attract young talent and let Cincinnati become one of the most vibrant downtowns.

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Other thoughts

In response to “What else should we at EACC know about the resources you need to be successful and grow in this region? What did we overlook?”

General statements seeking Fair Trade

Fair means fair. The U.S. should not be out-negotiated on every treaty. All types of taxes, fees, duties should be combined in to one cost of doing business formula to define fair!

Free trade agreement would help our sales considerably in U.S.

Free trade means more business can be conducted, and that means more tax revenue - Austrian school of economics.

Open markets create opportunities.

Offering opportunities for spouses of expats; getting access to recent graduates who would be open to working internationally.

Would be nice to have more proactive external support in the region by GE, CFM, etc.

Educational resources to support people development efforts. BS/MS degrees, Associates degrees.

Highly ranked school systems in order for families of employees to grow in the region.

Improved infrastructure; roads and bridges. Improved air transportation services.

Communication, how effective EACC can be in social media, events, etc.

Free Trade NegotiationsThe survey asked participants for their input about what they would you like EACC to take to Washington and Brussels.

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Specific suggestions or concerns

Ease of exchange of needed specialists.

Eliminate tariff, ease paperwork on exports to EU.

Intellectual property protection is a large concern for us.

Less regulation of businesses.

There should be a common agreement about how to handle material flow from a European to a U.S. Company and vice versa, especially finance-wise. It should be possible to work internally without having sales price issues and paying a lot of taxes.

U.S. immigration rules are complex and costly to comply with. Ease in movement of skilled workers between U.S. and Europe will help both continents.

We need an even hand when it comes to REACH regulation. Equal enforcement for all companies involved even when it is detrimental to EU entities.

ConclusionResponses in this first assessment demonstrate a very supportive climate in Greater Cincinnati/Northern Kentucky for transatlantic business development. The study also provides examples and data to help address few areas of concern, which are areas of concern for the region broadly: air travel and access to a skilled labor force.

Overwhelmingly, this report affirms that European companies doing business in this region find the location excellent, have access to customers and to suppliers, and receive the services they need to succeed.

American firms working with or selling product to Europe find transatlantic business development to be a pathway to growth. They value supports for language training and risk assessment as part of their strategic planning.

Based on these findings and discussions at the EACC Transatlantic Outlook summit, EACC, its member firms, and partner institutions will delineate the best next steps for further enhancing transatlantic business development.

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<$10 Million

11%

$11 - $25 million

19%

$26 - $50 million

11% $51 to $200 million

19%

>$200 million 40%

MethodsThis survey was distributed to EACC members, CSH clients, selected members of Cincinnati USA, and the U.S. Commercial Service. There is no count of the total number of recipients.

Responses came from 32 companies that identified themselves as “inbound” and 12 that identified themselves as “outbound.”

On average, respondents were doing business in 2.6 European countries or regions and on at least one other continent other than North America and Europe. The most frequent response for European countries was Germany (23 of 36 that answered that question) and the most frequent response for other countries was Asia (also 23 of 36).

Figure 6: Percentage of respondents doing business in:

42%

39%

64%

44%

19%

28%

22%

0% 10% 20% 30% 40% 50% 60% 70%

France

Benelux

Germany

UK

Spain or Portugal

Poland/ Eastern Europe

Scandinavia/Baltic

Figure 7: Market size (total, international, all units)

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Figure 8: Ownership

Figure 9: Nature of operation in Cincinnati

Figure 10: Respondents by NAICS code

3%

3%

3%

3%

3%

5%

5%

5%

5%

8%

57%

Retail Trade

Agriculture, Forestry, Fishing and Hunting

Construction

Information

Mining, Quarrying, and Oil and Gas Extraction

Transportation and Warehousing

Professional, Scientific, and Technical Services

Other Services (except Public Administration)

Finance and Insurance

Wholesale Trade

Manufacturing

Private 69%

Public 25%

Other 6%

Private 69%

Public 25%

Other 6%

Plant19%

3%Sales6%

Office, US HQ58%

Plant19%

Distribution3%

Sales6% International

HQ14%

20

8 6 4 2

5 10 12

7

13 12 14

18

Part of Business Cluster

Near suppliers Business network

Near distributors

Title We didn't include this in our decision.

We considered but wasn't critical.

This was critical.

22 16 14

6

4 12

3

11 3

Ease of access to U.S. customers

Being near a key client or customer

Central in US

Title

We didn't include this in our decision.


This was critical.

Appendix A: Additional Graphs

Figure 11: Importance of location near customers: Inbound Number of respondents. Total = 32. Does not include “Don’t Know” responses.

Figure 12: Importance of location by other businesses: Inbound Number of respondents. Total = 32. Does not include “Don’t Know” responses.

Figure 13: Importance of travel factors for transatlantic companies: Inbound Number of respondents. Total = 32. Does not include “Don’t Know” responses.

13 13

10 11

2 1

5 5

Travel in U.S. Travel to Europe

Title We didn't include this in our decision.

Factor against region, but other factors overcame it.


This was critical.

We considered but wasn't

13 13

10 11

2 1 5 5

Travel in U.S. Travel to Europe

Title




This was critical.

21

10

6 4 4

1

2 7 7

1

4

1 1

Access to European customers

Be near key client

or customer

Strategic analysis

of market opportunities

Part of international

business network

Title



This was critical.

Figure 14: Importance of human resources factors for transatlantic companies: Inbound Number of respondents. Total = 32. Does not include “Don’t Know” responses.

Figure 15: Importance of Cincinnati “Welcome Mat” for transatlantic companies: Inbound Number of respondents. Total = 32. Does not include “Don’t Know” responses.

Figure 16: Importance of access to European customers: Outbound Number of respondents. Total = 12. Does not include “Don’t Know” responses.

12 10 8

10 13 13

7 5 8

Skilled labor Qualified resources (accounting,

legal, banking)

Management talent

Title



This was critical. 12 10 8

10 13 13

7 5 8

Skilled labor Qualified resources (accounting,

legal, banking)

Management talent

Title



This was critical.

6 3 1

16

10 8

2

7

16 16

Quality of Life Expat Assistance Reputation

Title




This was critical.

22

4 3

2 2 2

2

3 4 4

3

1 2

1

3 5 5

3

6

Title




This was critical. 4 3 2 2 2

2 3 4 4 3

1 2

1

3 5 5 3 6

Qualified resources

in Cincinnati

Language knowledge to facilitate

market entry

Access to skilled

labor in Europe

Leadership talent

to help plan

Management talent

available in Europe

Title




This was critical.

4

5

1 1

Travel to Europe




This was critical.

1 1 1 1

5 4 4 2

1 1 2

5 6 5 6

Access to suppliers

Access to distributors

Ease of travel to Europe

Help for families locating abroad

Title




This was critical.

Figure 17: Importance of other factors: Outbound Number of respondents. Total = 12. Does not include “Don’t Know” responses.

Figure 18: Importance of travel factors: Outbound Number of respondents. Total = 12. Does not include “Don’t Know” responses.

Figure 19: Importance of local resources: Outbound Number of respondents. Total = 12. Does not include “Don’t Know” responses.

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Appendix B: Why firms develop transatlantic trade

What brought your company to the Greater Cincinnati region? [“Inbound’]

Acquisition

Corporate acquisition and location of manufacturing facilities.

Acquisition of a company already based in Cincinnati.

My company was already established in the UK and they bought a U.S. company to expand here. U.S. company was based here in Cincinnati.

European mother company acquired a plant in Greater Cincinnati as part of another deal.

A result of global merger activity, of which we were a tiny part.

Cincinnati itself – not necessarily business related

The environment - liked the cost of living and values.

We were founded here by local residents.

The CEO had a home here and moved the HQ here for that reason.

We came over in 1978 and the reason we came to Kentucky is horse country So, no business reason but a personal reason. Still one of the best choices we ever made. It is great for business too.

Specific circumstances, location of first sales rep.

Location vis-à-vis customers or business processes

Setup of cost-attractive operation in the middle of the U.S. automotive industry.

We are within a 1-2 day shipping point from nearly 80% of our customers. It is also a pro-business region with a lot of incentives and a very good international feel. At the time, it was a well-established international hub for travel back and forth to Europe for our team members.

Real reason why we picked Cincinnati as the place for our North American HQ is properly a little different than most international companies. The primary reason we picked Cincinnati is because we have family in West Chester, OH. Another point that also counted in this decision was that our biggest competitors are located here as well. Also with the nature of our business, Cincinnati was very centrally located to where we can reach 75% of the customer segment we are targeting within an 8-hour driving radius.

Goal was to grow U.S. market share. Explored cooperation with a competitor in Maysville, KY, that did not materialize, but Maysville was deemed to be a perfect location due to great work ethic, available labor, available transportation, location in the heart of the Midwest, and the center of U.S. manufacturing.

Great support for business development. A direct flight to Germany every day. (No longer valid). A central location within the USA. Many local European companies.

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Location vis-à-vis customers or business processes (continued)

Mid-west location ideal for U.S. Distribution.

We always wanted to open up a facility (sales and warehouse) in the U.S. Thanks to a trip for business owners organized by another German based company in KY, we got to know the region, the people and most valuable information to base our decision on.

Cincinnati was a center for machine tool work and naturally our Swiss company found a distributor in the Cincinnati region.

We relocated here to be closer to customers and the company’s network of production facilities.

12 years ago - a major Delta hub. Stable workforce. Offices ‘cost efficient.’ Greater Cincinnati area large enough to offer diversity. Recent years ‘evolution’ very positive.

[Firm] was looking for a place to grow its manufacturing and service organization beyond being just a distribution and sales office. I performed a study on-behalf of the company when I was hired in 2009. We found Northern Kentucky a great place. The area offered a major airport hub, central to the U.S. and our customer base, and a well-established infrastructure of like-minded companies.

Our goal was to expand to the U.S. and originally started in Dallas/Fort Worth area due to our US partner. We relocated to the Cincinnati/Northern KY area a year later to be closer to our two major customers at the time (located in Hebron and Frankfort). It also had direct flights to Frankfort, which was an important thing for us at the time (not so much now). We also find this location very central for serving all our customers (now located in the Midwest, Southeast, etc.).

Market Opportunity

Opportunity - after the only high grade iron ore mine in the U.S. closed in 2001. Our group has always looked upon North America as a potentially growing market for our mineral products.

Providing services in the CPG/retail industry, it was a natural choice to establish a subsidiary in the Greater Cincinnati Area and grow our business in the long term.

German expansion into the U.S. market.

To support U.S. customers, develop business, and provide for possible U.S. manufacturing.

Partnerships

We are currently working with clients in the Greater Cincinnati region and plan to expand our operations to the area in the future.

Our company was founded resulting from work completed for P&G in mid-1990s.

My company was created with a joint venture 40 years ago. JV headquarters is in Cincinnati.

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Other : Inbound – continued

Trying to find a connection/network of contacts in Russia.

We are a Dutch-based company that was looking for a manufacturing presence in the United States. The tax incentive provided by the State of Ohio was attractive and an optimal manufacturing site had become available in the Cincinnati area.

What circumstance or opportunities inspired your company to look to Europe? : Outbound

Acquisition

Acquisition of a business already operating in Europe - employees and customers.

We bought a company that was headquartered in North America.

Client/Customer Drivers

Clients took us there.

Our multinational customers requested that we have a local manufacturing presence. We started for them and built the business on that base through strategic investment.

Our customers have operations there and their formulations required our products.

Our current customers were asking us to provide service to them in Europe.

Customer opportunities many years ago.

Our existing opportunities with the US military.

Market opportunities

Products we make provide solutions around the world - so Europeans can use our products to improve their lives.

Large market of developed countries and continuing development of Eastern European countries.

Our existing opportunities with the US military.

We finance large industrial machinery for global companies. EU companies buying in U.S. as well as U.S. companies exporting to EU require specialized finance expertise for non-governmental backed export and import finance. I represent both US and EU machinery builders.

Global need for large original equipment manufacturers (OEM).

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© Clark Schaefer Hackett 2014

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