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But was it worth it?

While Gov. Martin O’Malley’s recent trip showcased deals between Maryland companies and Asian businesses and governments, some question whether its expense and extent were justified.
“Could this have been accomplished with much less cost?” asked House Minority Leader Anthony J. O’Donnell (R-Dist. 29C) of Lusby.
In a report, O’Malley (D) refers to global competition, rather than local competition, as the “true competition” that states face in this economy.
“With many of Maryland’s top business leaders and educators among our delegation, we sent a strong message to companies in China, Korea and Vietnam that Maryland is the gateway to doing business in the U.S., particularly in the life sciences and high tech industries,” he said in a statement. “... I am confident that this mission will continue to open doors for new investments and help Maryland businesses navigate untapped opportunities to provide goods and services to some of the world’s fastest growing economies.”
But the Maryland Business for Responsive Government says it is concerned with a shifting focus from in-state business concerns to global ones.The group points to Moody’s Analytics ranking Maryland 32nd in the nation when it comes to economic outlook and Chief Executive Magazine ranking Maryland 37th when it comes to doing business.
"There is general agreement on the need for each state to participate in the global economy, and the Governor's Asian economic development trip is a step in that direction," Kimberly M. Burns, president of the group, wrote in a statement. "More importantly, with a special [legislative] session looming in the Fall is the need for fiscal responsibility, holding the line on taxes and improving our business climate here at home so we can compete both with neighboring states and in the global economy."
O’Donnell and Minority Whip Jeannie Haddaway-Riccio (R-Dist. 37B) of Newcomb also expressed concerns through a letter to O’Malley.
“This was a very large delegation. We want to understand the cost,” O’Donnell said. ”At a time when Marylanders are struggling to pay their bills, we want to know the actual cost of the trip, and we’ve asked for that to be chronicled.”
The letter mentions the governor’s office reporting the trip cost about $100,000. State officials have said they are working to come up with a total cost. At his news conference Tuesday, O’Malley said he did not have the cost.
O’Donnell’s letter requests an accounting for the individual costs for the 27 government-related staff, as well as unnamed staff members and the security detail. Although O’Donnell said he expects the private-sector executives paid their own way, the letter also calls for reporting any taxpayer dollars used to cover them.
Experts say O’Malley’s presence was instrumental in fostering deals, even if some were prearranged.
“Just because the deals may be cut before doesn’t mean he’s not cutting more deals while there,” said Peter Morici, a business professor at the University of Maryland, College Park.
“There’s time and effort that goes into attracting these businesses,” said Morici, who acknowledged that he is often openly critical of lavish government spending, but O’Malley’s trip doesn’t fall into that category. “The cost is really just airfare.”
He said Asian government and business officials typically place a great deal lot of importance on a government presence went it comes to economic development, so a governor’s presence has an impact.
For example, BlueWing Environmental Solutions & Technologies’ deal with Vietnam Natural Resources and Environmental Corp. was facilitated by O’Malley’s support, said Kevin E. Hedge, CEO of the Ellicott City company.
Most business deals in Vietnam go through its government, said Peter Gourlay, president and founder of the Maryland-Asia Environmental Partnership.
“Having the [Vietnamese] government sign an agreement is huge,” he said. “Vietnam is one of the most vulnerable [nations] to climate and environmental issues, and that directly impacts their exports. ... So the government is especially interested in BlueWing’s technology.”
Lin Hwang of J&R Seafood agreed that the governor’s presence lends credibility.
“Most emerging countries appreciate it very much,” Alexander M. Gordin said of a governor’s presence on a trade mission. Gordin is a trustee of the Princeton Council on World Affairs and international trade expert with the Broad Street Capital Group in New York.
The trade mission shortened Planned Systems International’s contract cycle by six months, saving the Columbia company thousands of dollars, CEO Terry Lin said. He said such contract negotiations can be especially difficult, so having a significant presence such as O’Malley’s was helpful.
Gordin said the governor’s presence sends a message that the U.S. sees global trade as especially important. He added that having the governor actually addressing the foreign groups also helps differentiate the state within the U.S. and helps other countries understand they are working with Maryland specifically.
“Maryland is in a great position to take advantage of this international post-world-recession,” Gordin said. “If the mission is followed through with actual activity, it will be very useful.”
He said such missions build long-term relationships and that nothing will ever replace face-to-face discussions when it comes to commerce.
“We can’t stop trying to attract businesses to Maryland just because things are tight,” Morici said. “We need to do this to compete. Other states are also attracting foreign investment.”
lrobbins@gazette.net

Ten days, 68 people, and thousands of dollars went into Gov. Martin O’Malley’s 10-day trade mission to Asia that wrapped up last week.

Thus far, the trip has resulted in agreements totaling $85 million in direct foreign investment in the state and numerous collaborative business deals that will be fleshed out over the coming months. O’Malley (D) and his delegation, including almost 30 executives, left Maryland May 31, with stops in China, Korea and Vietnam.

“It’s better than I expected,” Lin Hwang, vice president of J&R Seafood in Cambridge, said of the Chinese market. Hwang spoke during O’Malley’s new conference Tuesday.

J&R, which already trades with Korea and engages in limited trade with China, expects to increase its blue crab exports by 30 percent this year, due to potential deals made in China, Hwang said. He said J&R also is considering opening a Chinese office.

“The Chinese will eat any kind of seafood,” said Hwang, a Korean-American.

China is Maryland’s third largest export market, with $571.21 million in 2010, according to the Department of Business and Economic Development. Exports to South Korea, the state’s sixth largest market, generated $480.5 million. All told, Maryland exports increased 10.2 percent in 2010 from 2009, with Chinese exports increasing by 0.9 percent and Korean exports growing 133.0 percent.

“These state missions go back a long time,” said state business Secretary Christian S. Johansson. “They’re about using the bully pulpit office of the governor to make sure his presence is leveraged to engage new markets and market the state efficiently.”

Johansson said he hopes the sister-state relationships O’Malley forged with Vietnam’s Ninh Thuan Province during the trip yields results similar to the one Maryland made with China’s Anhui Province years ago during another trade mission.

“My only regret is that we didn’t go earlier,” O’Malley said, adding he would like to make similar trips to South Africa and India.

Among the successes O’Malley touted were the $40 million investment from Chinese biopharmaceutical company Tasly Group in a 443,000-square-foot facility and trading center at Shady Grove Life Sciences Center in Rockville and the $45 million in joint deals signed by Martek Biosciences of Columbia and RTKL in Baltimore.

Both companies have existing trade relationships with China, as did many of the companies represented on the mission.

Martek, now a division of Royal DSM of the Netherlands, employs nine people in its office in China. It has marketed its life’sDHA product for use in cooking oils to China’s Cofco for several years, said Martek spokeswoman Cassie France-Kelly. The recent deal is a renewal of that arrangement, and also includes Cofco’s launch of another cooking oil product with life’sDHA.

“China puts a huge premium on good nutrition and puts a premium on U.S.-made ingredients,” France-Kelly said, adding that China is a priority market for Martek.

Martek, which trades with 75 countries and generates $450 million in annual sales, will send executives back to Shanghai next month to support other business partners, she said.

RTKL, a Baltimore global design company, has two Chinese offices, and during the trade mission closed a deal on design consulting services for Beijing United Family Hospital. The deal for the free-standing rehabilitation hospital, which is unusual for the country, was signed with Chindex International, a Bethesda company that provides health care services in China, said Helen B. Jeffery, RTKL vice president for the project.

“It shows this is a Maryland company doing business with another Maryland company but in China,” she said.

She did not disclose project costs but said the hospital will provide more than 100 beds.

RTKL has 150 employees in China and had revenues of $210.5 million in 2010.

Columbia’s Planned Systems International also signed a memorandum of understanding to jointly invest with China’s SkyNet in a cloud computing center to enhance China’s electronic medical record services. The $45 million contract could result in 100 new jobs throughout Maryland and China, CEO Terry Lin said Tuesday.

International Land Systems in Silver Spring used the trip to negotiate the next phase of its current land registration project in Anhui Province, China.

Some parts of China have no modern property boundaries, said Christopher Barlow, sales and marketing director for International Land. He said the next phase could be worth $100 million.

“This helped solidify our relationship,” Barlow said.

Drew Greenblatt, CEO of Marlin Steel Wire in Baltimore, said he was particularly grateful to the mission for helping him connect with Vietnam, a market he has struggled to break into with his stainless steel manufacturing business.

Even after signing an agreement with Vietnam’s Inox Hoa Binh, a state-owned production and fabrication firm, Greenblatt stayed longer in the country to explore opportunities at Japanese- and U.S.-owned factories in Vietnam.

“We’re poised for some great things in Asia,” he said.

Companies are capitalizing on the proximity of these emerging foreign markets and cheap labor, but they lack the high quality and engineering that some U.S. companies can provide, Greenblatt said.

Greenblatt’s agreement will have Inox Hoa Binh shipping sheet metal to Baltimore, where Marlin Steel will engineer and weld it for export back to Vietnam. While Greenblatt wouldn’t comment on the agreement’s value, he said neither company would be interested in deal that was not in the range of $5 million to $10 million.

For some companies, such as BlueWing Environmental Solutions & Technologies in Ellicott City, just being with other members of the delegation paid off.

BlueWing partner Kevin E. Hedge said Rockville company Meiwah International’s Tony Hoang and George Dang were instrumental in lining up BlueWing’s deal to provide its floating island technology to Vietnam Natural Resources and Environmental Corp. to clean up water pollution. Meiwah’s executives helped BlueWing meet with officials from the Vietnam environmental agency, Hedge said. Meiwah also signed an agreement in Korea with Vietnam’s Rising Sun Home Co. to attract investment through the Maryland Center for Foreign Investment.

Hoang also has connections with Rockville’s AmeriSure Pharmaceuticals, which signed an agreement with Vietnam’s state-owned Vimedimex to distribute its products.

Even companies that did not sign any agreements said they made progress in reaching interested Asian customers.

Bob Struble of iBiquity Digital in Columbia said he hopes for good news from his talks regarding iBiquity’s high-definition radio technology. Emergent BioSolutions of Rockville also arranged several Korean meetings to discuss its tuberculosis and anthrax vaccines, said Vice President Jose Ochoa, adding that Emergent will meet again with these representatives at the Biotechnology Industry Organization’s international conference in Washington, D.C., this month.

Maryland officials also used the trip to add two Chinese biotechs, Sunscape and Cell Path, to its International Incubator at College Park.

lrobbins@gazette.net

Maryland exports

To China:

2008: $569.9 million, 5.0 percent of total exports

2009: $566.1 million, 6.1 percent of total exports

2010: $571.2 million, 5.6 percent of total exports

To Korea :

2008: $235.5 million, 2.1 percent of total exports

2009: $206.3 million, 2.2 percent of total exports

2010: $480.5 million, 4.7 percent of total exports

Source: Maryland Department of Business and Economic Development