By Michael Felberbaum
The Associated Press
© May 29, 2012
When Richard Diamonstein’s family started Paramount Sleep in the 1930s, selling mattresses made in Norfolk to far-away places was unthinkable.
Now the third-generation company with about 90 employees is turning to overseas markets like China to help expand the business. Diamonstein, president of the company’s commercial division, said doing so has allowed Paramount to create jobs despite the bad economy.
Paramount Sleep isn’t alone. Thousands of Virginia businesses are benefiting from international trade and making a large impact on the state’s economy.
Virginia exports increased nearly 6 percent in 2011 to $18.1 billion, ranking it as the 25th-largest exporting state in the U.S., according to documents from the Virginia Economic Development Partnership’s international trade office.
“There’s absolutely nothing but good that happens when a Virginia company makes something, sells it overseas and brings that money back,” said Paul H. Grossman Jr., director of international trade and investment for the office. “Exporting is being more and more recognized as integral to a healthy economy. We didn’t have that conversation 20 years ago. ... Now it’s absolutely critical.”
Virginia has about 6,600 companies in that are involved in international trade, both imports and exports. Of these companies, roughly 5,500 have fewer than 500 employees.
Exports of goods and services support about 300,000 private-sector jobs, and nearly one-sixth of all manufacturing workers in Virginia depend on shipping overseas for their jobs. Economic development officials also said jobs with companies that export pay about 15 percent more than jobs with companies that sell only domestically.
In 2011, manufactured goods accounted for about 80 percent of all Virginia merchandise exports, followed by agricultural exports, and mineral fuel and tobacco.
But some of what Virginia is manufacturing has changed from traditional items like textiles and furniture to more high-tech and industrial goods.
“Yes, we have lost textile manufacturing from Southside Virginia; yes, we have lost furniture manufacturing. Those are major industries, major job losses, and they’ve caught everybody’s attention, deservedly so,” Grossman said. “But what doesn’t catch everyone’s attention is the diversity of the products made in Virginia and the niche products that are made in Virginia.”
Grossman cited a Virginia company that makes high-tech capsules used in pharmaceutical testing and another, Steelmaster Buildings LLC in Virginia Beach, which makes steel buildings used for residential, industrial and commercial structures — like car ports and airplane hangars — around the world.
“Being able to go beyond our borders when the situation here was hard has been able to help us sustain our business,” said Emma Granada, Steelmaster’s international business development manager. “In the recession years ... companies were unfortunate to lay off people. Our company has not done that. It’s done the opposite.”
Steelmaster, which has about 50 employees, has seen its international sales increase from only 3 percent of its revenue seven years ago, to about 20 percent. The company with about 40,000 buildings in more than 45 countries was named as the 2012 Virginia Exporter of the Year by the U.S. Small Business Administration.
Virginia’s top commodity in 2011 was industrial machinery, which increased 5.5 percent to $2.56 billion last year. Electrical machinery was the second-largest export valued at about $2 billion, followed by mineral fuels, plastics, vehicles, parts for aircraft or spacecraft, and paper and paperboard.
Exports of tobacco, a long-time staple of the Virginia economic landscape, decreased nearly 40 percent last year to $209 million as international tobacco companies have shifted their use of U.S. leaf to a growing overseas market. It is the fourth consecutive year of declining tobacco exports in Virginia.
For the 15th consecutive year, Canada topped the list of destinations for Virginia exports, importing more than $2.9 billion worth of goods. China was second in 2011, importing more than $1.75 billion. Exports to the United Kingdom, which was third with nearly $1.09 billion, increased about 8 percent last year compared with 2010.
Among the top 10 destinations for Virginia exports, Singapore saw the largest decrease of about 60 percent, but exports to the country still totaled more than $416 million in 2011.
Virginia exports are rebounding after significant declines in 2008 and 2009 during the Great Recession, but Grossman said continued funding and support for programs are vital to sustaining and growing Virginia trade.
For Diamonstein’s mattress company, which earned a visit earlier this year from U.S. Commerce Secretary John Bryson, working with state officials helped him navigate the waters of international trade.
“The first customer is the most difficult since you have to figure it all out,” he said. “As we gain experience, we anticipate that that process will become more routine.”
Diamonstein also added he was “delightfully surprised that American-made products have a quality image overseas.”
President Barack Obama announced a plan in 2010 to double exports over the next five years, supporting 2 million American jobs.