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BEIJING — Norman Krug of Chapman, Neb., didn't need a trade mission to make his first international business deal 14 years ago.
Since then, however, he has promoted his popcorn company on three trips led by Nebraska governors, including Gov. Dave Heineman's current effort in China.
“You appreciate having the governor do this because it lends credibility to you,” Krug said Sunday.
Heineman arrived Sunday afternoon in Beijing to begin a three-city tour of China. The goal is to boost exports of Nebraska manufactured goods as well as attract Chinese investment to the state.
The Nebraska trade mission got off to a good start with a series of announcements Sunday and Monday in Beijing, which is 13 hours ahead of the U.S. Central time zone:
» Behlen Manufacturing Co. of Columbus, Neb., said it would partner with Beijing Uni-Construction Group to produce steel buildings at a new factory near Beijing. The factory will be three times as large as Behlen's first Beijing plant, which has been shuttered for about a year.
» The Beijing franchise of Omaha-based Right at Home, which provides care for senior citizens, will expand to other Chinese cities.
» Vireo Resources of Plattsmouth has lined up distributors in China to sell two health supplements that were developed by researchers at the University of Nebraska Medical Center. UNMC receives royalties from the sales of the product.
In all, about 45 people are on the trip, including Heineman and Nebraska first lady Sally Ganem, state economic development staff members and Nebraska businesspeople. Some Nebraska-based businesses with operations in China also have staffers hosting events.
The mission also includes stops in Xi'an and Shanghai, though some of the participants are going to just one or two of the cities, depending on where they have interests.
“I'm hoping that I can open some doors,” Heineman said. “Sometimes in foreign countries the introductory step is through the governor. My goal is to assist our business leaders.”
As it turns out, the first announcements of the trip didn't stem directly from the trade mission or even previous ones.
But participants say trade missions are valuable tools for helping a state's businesses make key contacts with potential customers. For example, Krug will meet in Beijing with a potential business partner lined up by U.S. Department of Commerce officials who are based in China.
In addition, in a world where business deals can hinge on whom you know, it's useful to be associated with your state's governor. That's particularly true in China, where businesses often are run by government agencies.
Heineman's visit can get the attention of government officials, who can make investment decisions or approve deals. After a previous trade trip in 2007, Heineman said, some Nebraska businesspeople told him it was the first time they had been able to meet with key Chinese officials.
Nebraska isn't alone in sending state leaders overseas to help promote business. Iowa has had two trade missions in the past 14 months, and a U.S. Department of Agriculture trade mission in March included representatives from six states, including South and North Dakota, Kansas, Oklahoma and Illinois.
Sunday in Beijing, Heineman attended Behlen's announcement of its new Chinese partner, the Beijing Uni-Construction Group Co., or BUCC.
Behlen started its China operation in 2002 by partnering with a company that was involved in real estate development. But that proved to be the wrong partner for long-term growth, said Behlen Chairman Tony Raimondo.
In China, he said, a steel supplier like Behlen doesn't get paid until the building is completed. That caused Behlen some cash-flow problems.
In addition, he said, Behlen's Beijing plant wasn't close to full capacity, with about $18 million to $20 million in annual business.
“We figured we're not going to make any pennies,” Raimondo said.
The plant was mothballed while Behlen and its original partner started looking for other options.
The solution, Raimondo said, is a new partnership with a construction company he described as the third-largest in Beijing. The new venture consolidates both companies' manufacturing equipment into a new factory that will be three times as large as the one Behlen closed. Now Raimondo is projecting sales of at least $60 million.
“Our weaknesses have been construction and marketing,” Raimondo said, “and BUCC brings that strength.”
Krug has been selling popcorn around the world for 14 years, ever since he and his wife, Sue, started their business, Preferred Popcorn.
His first sale, in fact, was to a buyer from Jakarta, Indonesia. And he hasn't looked back. Now 60 percent of Preferred Popcorn's sales are to customers in 55 countries, and he makes about six trips a year overseas.
The company has contracts with growers in six states, including about 50 in Nebraska, and its producer network stretches from Ogallala, Neb., to Louisville, Ky.
The Krugs joined the trade mission from South Korea, where they had gone for business meetings. In China they used the weekend for some shopping and sightseeing. But popcorn is never far from Norman Krug's mind.
As he passed a refreshment stand outside the Great Wall on a rainy morning, Krug noticed that the vendor was making popcorn.
So he slipped into the refreshment stand and peeked under the counter. He was hoping to see a bag of the unpopped kernels and read the brand name.
He couldn't find the bag or communicate with the puzzled vendor, so Krug gave up and bought T-shirts instead.
But he is certainly not giving up on selling more popcorn in China — already a top market for his company.
Consider this: There are about 900,000 popcorn servings in each of the shipping containers that Krug sends overseas. And while Krug doesn't want to get too specific, Preferred Popcorn ships more than 100 of those containers to China each year.
That means Krug may be sending more than 90 million servings of popcorn each year to the China market.
It sounds like a lot, and it is. Yet given that China has 1.3 billion residents, Krug is thinking bigger. He hopes this week's trade mission opens some new doors, but he knows that even traveling with the governor will not guarantee success.
“Still, in the end, you have to make a sale.”
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Video by MATT MILLER/THE WORLD-HERALD