Paulson Manufacturing – Eye Protection GearFor European markets

Roy Paulson,President and CEO,

Paulson Manufacturing

International Business NewsSeptember 2019

Also in this issue:Practical tips on exporting to Europe / Travel - Hungary / Big Iron Show/Country Profile – N. Macedonia

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Pg. 2: Savino Del Bene

Pg. 3: Letter

Pg. 4-5: Paulson Manufacturing Pg. 6: Paulson’s Tips / First National Bank

Pg. 7: Budapest, Hungary

Pg. 8: EXPRESS NEWS

Pg. 9: Fargo’s Big Iron / Kansas Global

Pg. 10 : Budapest, continued

Pg. 11-13 : N. Macedonia, cont’d / Transimpex

Pg. 14: North Macedonia, continued

Paulson ManufacturingTwo Central European countries

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The subject of my column was intended to underscore the significance of export success in Central European markets.

But as I began researching the subject among small to medium-sized enterprises (SMEs), I soon learned that penetrating Central European markets was typically an extension of SME work in major European markets.

Paulson Manufacturing, featured in our September edition (pg. 4), is a good example. As Roy Paulson pointed out to me, selling into many of the Central European markets came about through inquiries from them and somewhat of a by-product of his systematic program based in Germany.

Paulson operates a distribution center in Frankfurt. His sales reps there are multi-lingual and work nearly all European markets. In addition, some of his Central European sales come through his work with larger European OEMs. Of course, there are many intricacies involved, and those you can read about in his story.

Foremost on the minds of many SMEs at this point, are the tariffs and threats of increased tariffs that affect SME sales margins. Although some bear the tariffs with little if no price increases, others are passing them on to their customers, while seeking alternative sources of component manufacturing. The situation has hit exports in the gut with no sign of relief.

In Europe, the manufacturing sector is just awful, according to the Wall Street Journal. Blamed are the uncertainty of the trade wars, the outlook for the auto industry and Brexit.

Our advice continues to be that of pressing your Republican senators, in particular, to actualize conciliation; and the Trump administration in general.

FB

page 3September 2019

Paulson Manufacturing is based in Temecula, CA. Its primary products are transpar-ent face and eye protection equipment and gear. It began with Mr. Paulson’s father, who had an idea for a goggle while using infantry goggles when he served in the Pacific during

World War II.

According to Mr. Paulson, former President of the National Association of District Export Councils, he eventually re-focused the firm’s very broad and diverse product line and narrowed it to the safety aspects of face protection.

The company developed a complete line of custom-crafted transparent arc fault face shields, goggles and accessories to provide worker protection in high-risk situations. Arc faults are a type of electri-cal explosions, which are instantaneous, violent and very costly.

“I wanted to be able to stand anywhere in the world and be the best that we could be in face protection,” said Mr. Paulson. I had decided that if we could satisfy this critical product demand here in the US, why not supply our products anywhere in the world?”

That decision led him to a bold step for a small company. He established his own distribution center in Frankfurt, Germany. Unlike many distri-bution centers (DCs), this operation employs 17 or more highly trained salespeople who sell through-out the world. Some are electrical engineers, and most speak multiple languages. For example, he has one Spanish salesman there who does most of the Latin American sales in addition to supporting Spain and Portugal.

“What’s different about our DC, if you will, is that we actually sell into it from our manufacturing facility here in the US,” he continued. “We initiate invoices with the price, duties, VAT, and anything else required and ship containers to our Frankfurt

Paulson Manufacturing eyes success in many European countries

Roy Paulson,President and CEO,

Paulson Manufacturing

IBNewsmagTM

September 2019page 4

facility.” The company’s people there then sell di-rectly to Paulson customers in Europe and in other countries. Its sales are tracked from the California plant as well as the Frankfurt operation.

The company has customers throughout western and central Europe, with strongest sales in Britain, Germany, France and Poland. Because many of the central European countries have smaller econo-mies, they primarily buy on an irregular basis. China continues to be a major buyer with Paulson’s product technology to stimulate sales and help avoid reverse engineering.

Paulson Mfg. often ships blanket orders, say 1,000 pieces at a time, for its customers throughout Europe. Then the customer buys only what they need from the 1,000 on a regular basis. And, the shipment typically goes out the very next day. “This ties up our capital,” he said, “but it provides inven-tory containment for the customer and as a result, maintains our preferred customer relationships.”

“We also had to investigate the safety requirements in other countries needed for our protection gear,” Mr. Paulson explained. Many European countries required similar standards found in the US. In cases when sold to foreign police departments for crime control, the company must apply for a Bureau of Industry and Security (BIS) license from the US De-partment of Commerce.

Paulson has strong competition throughout Europe and relies on advanced technology to maintain sales momentum. “We don’t sell on price alone,” he claimed. “Our customers buy from us because of product quality, training, timely shipping and customer service.”

Training often takes place around industry trade shows. “In fact, we will not sell to a distributor or customer unless we and they sign off on that training,” he offered. In the case of any subsequent mishap, the company has written proof that the seller has undergone stringent product training.

“Here in the US, we sell to large OEMs,” he ex-

plained. “For these customers we produce a com-pletely customized product line with their own branding based on their particular requirements.” This approach allows Paulson to maintain its solid customer relationships.

The company decided that if this approach worked in the US, why not employ it in other countries. The result is that it now sells in a similar way to Euro-pean OEMs. These OEM customers distributePaulson products to other countries, multiplying company sales.

Another aspect of the Paulson strategy is to con-tinually develop new products. “When we go to a trade show, we only show new products,” Mr. Paulson explained, “and begin discontinuing older products to help advance our sales and stave off competition.” The company employs 160 people in its California facility, employing engineers, shipping specialists and other needed services.

Returning to the subject of intellectual property protection, Mr. Paulson pointed out that in some central European markets, he has faced piracy despite its international patents. “For example, we saw that a certain manufacturer was selling very similar products to police departments in Turkey.” It was only by close examination that Mr. Paulson recognized that it was not his own.

While a majority of product originates in the US, Mr. Paulson does import some materials needed for his specialized material formulations. “While trade war tariffs have not affected us to this point,” he observed, “the continual adding of tariffs may yet affected our business. I have embraced a very complicated lifestyle with this business, but that is what keeps us ahead of the game.”

For more information on Paulson Manufacturing, visit www.paulsonmfg.com

IBN

page 5September 2019

Think outsidethe box.

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Paulson Manufacturing Frankfurt warehouse

Roy Paulson Tips for Doing Business in Central Europe

1. Develop an export plan, if you don’t have one you are just an opportunistic exporter and you will not be trusted.2. Visit you customers and don’t be in a rush like every other American. You need to establish a relationship to be able to sell internationally.3. Work on the long-term and accept that the entire process is going to take time.4. Be willing to listen to their needs and respond to them. 5. Get some help. The US Commercial Service is a good resource.6. Enjoy the adventure, International Business is an exciting project.

IBNewsmagTM

September 2019page 6

BHS Global - Battery Handling Systems

“Straddling the Danube River, with the Buda Hills to the west and the Great Plain to the east, Budapest is a gem of a city.” –Lonely Planet

Summer 2019 turned out to be a particularly strong season for the tourism industry, according to the CEO of the Hungarian Tourism Agency, Zoltán Guller. This increased interest in Hungary as one of the world’s top 15 tourism destinations is multi-faceted and includes factors such as affordability, relative safety, strength of economy, cultural offer-ings, ease of accessibility in the middle of Europe, landscape diversity, its presence as one of the most beautiful capital cities in the world, and the 2018 launch of its first international tourism campaign, “Spice of Europe”.

A historic jewel in the heart of Central Europe, Budapest, is actually made up of three unified cities, with Buda and Óbuda on the west bank of the Danube and Pest on the east bank. If you’re wondering what there is to do in this capital city, wonder no more. This top ten list of not-to-be-missed experiences clearly supports why a visit to this beautiful city should warrant a spot on your bucket list.

1. Enjoy a relaxing day at some of the world’s most famous baths. If you’re in need of physical

healing, the Széchenyi Baths Complex should be your first stop. Not only is this the largest “me-dicinal” bath complex in Europe, the mineral-rich waters are believed to help patients with degen-erative joint illnesses and other medical issues. If you’re simply in search of luxurious relaxation, a visit to the grandest spa in the city, the Gellert Bath and Spa Center, is in order.

2. Take a ride on the Buda Castle Hill Funicular. First opened in 1870, this is the second oldest funicular of its kind in the world and is the perfect way to take in spectacular panoramic views out across the Danube. While you’re there, check out the amazing castle!

3. Experience local nightlife. Budapest is famous for its “ruin pubs”, which are each unique in style, though all can be described as shabby-chic eclec-tic. Try more than one to get a good feel for the area. Also, for a spectacular view, visit the Aria Hotel Budapest’s famous rooftop bar, High Note Skybar.

4. Satisfy your hunger at one of the city’s six, 2019 Michelin Star rated restaurants. Hungarians take their gastronomy seriously and some of the best meals in Central Europe can be consumed

Hungary for Adventure in Budapest

Hungary, continued on page 10

Pest District - Various river cruise ships docked in town

page 7September 2019

Korea TimesSouth Korea will drop Japan from its “whitelist” of trusted trade partners by the end of September to counter Tokyo`s export restrictions on high-tech materials and removal of South Korea from its own whitelist.

Doosan Bobcat purchased an idle John Deere factory in India last year and will start producing backhoe loaders in October.

Buenos Aires TimesA Chinese customs delegation inspected plants along the Parana River. The officials will take about 30 days to produce a report that could pave the way for Argentina to export soy meal.

US approves US$ 400 million in financing Argentina`s road network. The money will be used to rehabilitate and expand an existing toll road and funding of new bypasses.

A new Central Bank survey predicts 55% inflation in 2019.

YPF S.A,, a government owned oil company is pur-suing a US$ 5B LNG (liquefied natural gas) export terminal project.

Santiago TimesBecause of a downturn in the mining industry, Chile announced a US$ 600 million stimulus package.

Chile declared an agricultural emergency as extreme drought hit Santiago and outskirts.

Straits TimesPresident Halimah Yacob of Singapore and Presi-dent Rodrigo Duerte of The Philippines met in Manila to discuss strengthening economic ties in such areas as infrastructure development, human capital and innovation.

Bangkok PostAs a result of the ongoing US-China trade war, the Thai government is providing tax incentives, special investment zones etc. to attract companies.

It is also planning investment attraction missions to China, Japan, Taiwan and South Korea.

South China Morning Post (Taiwan)Taiwan reports that it will buy more than US$3 billion worth of US farm products.

In a bid to drive home the message that Taiwan is a reliable US partner at a time of deep and growing distrust between Beijing and Washing-ton, Taipei has announced plans to buy US$3.6 billion worth of American farm products, including soybeans, corn, wheat and meat products. This follows the imposition by Beijing of up to 25 per cent tariffs on US grains in the tit-for-tat trade war involving the world’s two largest economies.

ReutersUS investment in Malaysia up sharply as trade row with China drags on.

Malaysia approved US investments worth US$ 5.62 billion in the first half of the year compared with $113 million in 2018, the government said on Wednesday, a possible sign of a diversion of US business as a trade row with China drags on.

US and Chinese companies alike are looking at moving some of their manufacturing out of China to escape tit-for-tat tariffs imposed on each other’s products.

Express News from Around the World

IBNewsmagTM

September 2019page 8

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The Big Iron Farm Show and Big Iron International Visitors Program (IVP) took place in Fargo, ND earlier this month. It attracted over 100 in-ternational visitors from more than 15 countries – including Russia, Romania, Ethiopia, Uruguay, Kenya, Liberia and Australia, who took part in show tours, one-on-one meet-ings, farm tours, educational ses-sions and VIP receptions. The focus was on machinery and education.

Big Iron international visitors are recruited through the U.S. Com-mercial Service’s (USCS) office in Fargo along with the North Dakota Trade Office (NDTO) and via the USCS branch locations throughout the world. The number of attend-ees doubled that of the 50 who attended in 2018.

Fargo’s Big Iron International Visitors Program attracted more than 100

The delegation from Uruguay helps celebrate Big Iron

page 9September 2019

in Budapest. Onyx, the highest rated locally, can be found in the heart of city center and offers an opulent dining room experience. Though pricey at between $110 and $190 per person for a six-course gourmet tasting meal, it is a bargain com-pared to most equally rated Western European restaurants.

5. A stroll down Andrássy Avenue will take you from Erzsébet Square in central Pest, out to the City Park and is a fantastic way to see and appre-ciate many of Budapest’s different architectural styles. Along this route, declared a World Heri-tage Site in 2002, you will pass several national embassies and the famous Hungarian National Opera House.

6. With so much to do, a visit to the Budapest City Park offers a unique experience for each person. Choose to visit attractions such as Buda-pest Municipal Zoo and Botanical Gardens, the Vajdahunyad Castle, or the Budapest Circus, all located inside the perimeter. Or choose to play a variety of sports, take a boat ride on the lake, enjoy a picnic or even glide along the ice covered lake on skates during the winter months.

7. Sample wines from Hungary’s 22 different regions at the historic Faust Cellars, located under the Buda Castle. A sommelier will offer lessons and even wine sampling notes to help you get the most from the tasting experience.

8. Visit the massive Hungarian Parliament Build-ing, built in the Gothic Revival style. To capture the fascinating structure in its entirety, make sure to view it from the other side of the Danube, as well.

9. Enjoy a day of shopping in central Budapest’s most famous marketplace, Great Market Hall, and Ecseri Flea Market, located on the outskirts of town. The shopping is reasonably priced and plentiful. Find anything from designer goods to jewelry and local handicrafts and everything in between.

10. A number of luxury river cruise lines operate vessels along the Danube and passengers can often embark or disembark the ships in Buda-pest. These magical journeys introduce you to many fascinating port towns and cities while maximizing your relaxation and total experience by needing to unpack only once, sightseeing from morning to night, and traveling overnight while you sleep. While all Danube River cruises are fantastic, it is best to consult an experienced travel professional to help you select the ship and sailing to best meet your needs.

Whether visiting Central Europe on business or considering Hungary as a vacation destination, Budapest will impress, entertain, and feed your hunger for exceptional gastronomy!

Lisa is pleased to offer her services and will even offer a discount to IBNewsmag readers who wish to travel to Hungary or other destinations.

Hungary, continued from page 7

By Lisa Osborne BlalockFootloose Travel & Tourslisa@footloosetravelandtours.com

Széchenyi Baths Complex

IBNewsmagTM

September 2019page 10

General• Handshakes are a commonly accepted greeting.• Dress conservatively- suit and tie for men and dresses or skirt and blouse for women.• Taking photographs of any military installation, government buildings is prohibited.• Phone coverage is generally good.

Business• North Macedonia is ranked 10 among 190 economies in the ease of doing business - World Bank - 2018.• Things generally move slowly.• The country has an educated workforce.• They speak Macedonian, which is closely related to Bulgarian and Serbo-Croatian.• English, German and French are spoken in most businesses. • Business protocol is fairly informal.• Many businesses are integrated into the German production chain.

PROFILE:North Macedonia

A Few Practical Tips for Doing Businessin North Macedonia Overview

• Its official name is the Republic of North Macedonia.• The country is a mountainous region with deep basins and valleys, three lakes and bisected by the Vardar River. • N Macedonia has warm dry summers and autumns with relatively cold winters with heavy snowfall.• The country is landlocked. • There is a wide variety of wildlife including wild boars and lynx. • Majority of people belong to the Orthodox Christian Church. • Turks and great majority of both Albanians and Roma (gypsies) are Muslims. Note: Some Roma consider “gypsy” to be a slur.

Location• Southeastern Europe north of Greece. • Bordering countries are Albania, Bulgaria, Greece and Kosovo Serbia.

page 11September 2019

Brief History• In the distant past, the land area now known as North Macedonia was controlled by the Greeks, Romans, Bulgarians, Byzantines, Serbs and Ottoman Turks. • North Macedonia gained its independence from Yugoslavia in 1991 with the name of Macedonia. • Over objections from Greece including trying to block them from UN entrance (Greece has a province named Macedonia.), they changed their name to North Macedonia even though its citizens continue to be called Macedonians, not North Macedonians.• Size: Slightly larger than Vermont.• Population Distribution: Fairly even distribution throughout most of the country. • Urbanization is increasing.• Population: 2.1M (July, 2018 est.).• Population Growth: 0.19% (2018 est.).• Literacy Rate: 97.8% (2019 United Nations data).• Government: Parliamentary republic. • It has a pro-western Capital City: Skopje (population - 506, 926 (2019 est.).

EconomyNorth Macedonia has low taxes and free invest-ment zones which has helped attract foreign in-vestment. Corruption and weak application of laws remain significant problems. Its economy is closely linked to Europe (exports, imports and foreign investment). The business base is small but diverse. They are working on a nationwide natural gas pipeline and distribution network. Their popu-lation is well educated and speaks multiple lan-guages. North Macedonia has a prudent monetary policy which pegs their currency to the Euro. Many foreign auto parts manufacturers have factories in North Macedonia including Johnson Controls, Lear Corporation, Visteon Corporation, and Johnson Matthey.

In addition, Greek companies have purchased many formerly government- owned companies. Several other US and European companies are investors as well.

• GDP: $11.4 B (2017 est.)• GDP Growth Rate: 0.02% (2017 est.)• Unemployment Rate: 19.4 % (2018)• Exchange Rate: 1 US Dollar = 55.5576

Skopje riverfront at sunset

July 2017page 12 September 2019page 12

Macedonian Denars (MKD) - (9/17/19) • Labor Force: 950,800 (2017 est.) • Labor Force Makeup: Agriculture - 16.2%; - Industry - 22.4%; - Services - 54.5% (2017 est.) • Major Industries: Agriculture (tobacco, fruits, vegetables, wheat, rice and corn), food processing, beverages, textiles, chemicals, iron and steel, cement, energy, pharmaceuti- cals, automotive parts, mining (brown coal)

International TradeTotal Exports: $4.601B (2017 est.)

• Major Exports: foodstuffs, beverages, tobacco, textiles, miscellaneous manufactured products, iron, steel, automo- tive parts• Major Export Partners: Germany - 46.7%, Bulgaria - 6.1%, Serbia - 4.4%, Belgium - 4.1% (2017)

Total Imports: $6.63B (2017 est.)• Major Imports: machinery and equipment, automobiles, chemicals, fuels, food products• Major Import Partners: Germany - 11.9%, UK - 10%, Greece - 8%, Serbia - 7.1%, China - 5.9%, Italy - 5.55, Turkey - 4.5%, Bulgaria - 4.3% (2017)

Sampling of English Language News Sites

• Skopje Diem - general news - www.skopjediem.com • Makfax News Agency - general news - www.makfax.com.mk • Macedonian News Agency - general news - www.micnews.com.mk

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Sampling of North Macedonia Companies

• Aktiva Engineering - design engineering, construction, metal fabrication etc. - www.activa.mk - Stip• Alkaloid AD Skopje - pharmaceuticals, chemicals etc. - www.alkaloid.com.mk - Skopje• Alpha Bank - commercial bank - www.aplphabank.com.mk -

Skopje• Don Market - supermarket chain - www.don.com.mk - Ohrid• FAS Sanos - buses and special vehicles - www.sanos.com.mk - Skopje• Granit - large construction company - www.granit.com.mk - Skopje

International Business News

page 13September 2019

Samuels Fortress at Ohrid in North Macedonia

• Makedonski-Shumi - publicly owned forestry company - www.mkdsumi.com.mk - Skopje• Makpetrol - distribution of oil and oil products - www.makpetrol.com.mk - Skopje• OKTA - refining and distribution of petroleum - www.okta-elpe.com/en - Skopje• Teteks - home furnishings manufacturing and retail - www.teteks.com.mk - Tetovo• Tutunski Kombinat Prilep - tobacco - www.tkprilep.com.mk - Prilep• FC Rabotnicki - brewery - www.fkrabotnicki.com - Skopje

Public Holidays-2019• January 1 - New Year’s Day• January 7 - Orthodox Christmas Day• April 29 - Orthodox Easter Monday• May 1 - Labor Day• May 24 - St. Cyril and St. Methodius Day• June 4 - Ramazan Bajram• August 2 - Ilinden Day• September 8 - Independence Day• September 9 - Independence Holiday• October 11 - Revolution Day• October 23 - Day of Macedonian Revolution• December 8 - Saint Clement of Ohrid Day • December 9- Saint Clement of Ohrid Holiday

July 2017page 14 September 2019page 14