Exporting

Exporting chopsticks to Japan

People Involved:

Ian J. Ward: Export merchant, owner and founder of Ward, Bedas Canadian Ltd. As his company was starting to face lots of difficulties, he started to develop a deep research to find new markets and business opportunities. Thus, he found that the Chopsticks market had a potential demand and he decided to develop a whole new manufacturing plant tomeet this demand. But the task was not easy as many aspects where making the project complex.

Chopsticks Consumers: one the results of Ward’s research was that chopsticks market was growing because of tendencies as more people eating out and doing it more often in countries such as Japan. As these types of consumers are not very friendly to the idea of eating with reusable chopsticks, Wardsaw an opportunity to satisfy a market which also didn’t have much competition with large-scale manufacturing.

Private Lenders: They were very skeptical and slow to provide loans for the sake of financing Wards idea. The reasons for this situation were among others, that for investors it was hard to believe that an American company would compete successfully in producing low-cost items against aspecialist such as Japan.

Local Officials: as the state of Minnesota was facing a decline of the mining industry, regional unemployment had been raising rapidly in the state peaking up to 22 percent. Thus, local officials were very interested in attracting new industries independent from mining activities, such as Ward’s project of manufacturing chopsticks. In contrast, the location was alsoattractive to Ward because it filled up all the criteria including access to resources, workforce and easy transportation.

Rudy Perpich: Governor of Minnesota and principal proposer of the idea to support Ward’s Company. The governor was boosting Minnesota business on the international scene and he was excited about Ward’s plans, as it would call for the creation of over 100 jobs in the state.Potential employees/workforce: As one of Ward’s criteria was the easy access of efficient labor force, Hibbing, Minnesota resulted to be an excellent labor pool. When Lakewood Forest Products advertised its first 30 jobs, more than 3000 people showed up to apply. For the people working on the manufacturing plant, training was very important to reach fine-tuning of machinery use, and improveChopsticks quality.

Japanese Customers: due to the high demand of disposable chopsticks from them, Ward had no major difficulties in selling his product. As customers were struggling to obtain sufficient supplies, he was able to presell the first five years of production quite quickly. This approach is of paramount importance as it gives the company security and confidence to keep the business,focusing on keeping costs low and high quality.

Organizations Involved:

Ward, Bedas Canadian Ltd.: selling Canadian lumber and salmon to countries in the Persian Gulf, this company grew up to open four different offices worldwide. However, because of the war, long-term trading relationships started to disappear and at the same time international lumber market started to collapse. Thus, thissituation made the company go into a survivalist mode in which it sent employees to look for new markets and business opportunities. Chopsticks markets appear then and the whole company needed to change to enter this specific market.

Iron Range Resources Rehabilitation Board: this organization was in charge of approving the financing efforts for certain projects. For this purpose, IRRB developedstrategies as selling 3.4 million in industrial revenue bonds for Ward’s project. Together with jobs and subsidies, enterprise zone credits, and tax increment financing benefits, the initial public support of the project added up to 30 percent of its start-up costs.

Lakewood Forest Products: To meet the chopsticks market, Ward started to look for a perfect location to manufacture the product....