S D Governor Says Mission Should Boost Exports To China

Wednesday, April 10, 2013

The president of a Rapid City-based company that makes products for power plants, mining operations and other industries said Tuesday that Gov. Dennis Daugaard's trade mission to China could pay off in a big way for his company and others in the state.

China is South Dakota's third-largest export market, but South Dakota still ranks last among the states in trade with the world's most populous nation, Daugaard said from Shanghai in a call with South Dakota news organizations.

Rob Mudge of RPM & Associates said he's holding 10 meetings with potential new customers during the trade mission led by Daugaard. China plans to build more than 400 coal-fired power plants in the next decade, using the latest clean-coal technology and scrubbers.

"That's my business. So for me, that turns into markets, and markets turn into jobs," Mudge said.

The Republican governor noted that South Dakotans were just "learning the ropes" a year ago when he led a trade mission that included just three businesses. The current trip includes 11 South Dakota companies and agricultural associations representing pork, corn and soybean producers. South Dakota can supply not only grain and meat, but also a variety of other products and services needed in China's rapidly growing economy, he said.

"We need to be more creative about looking for markets where we can find them and not just where we've always been finding them," Daugaard said.

The South Dakota businesses and state officials will have about 80 meetings with Chinese government agencies and businesses in Beijing, Shanghai and Hong Kong before returning home at the end of the week, the governor said. State officials will check later to see how many contracts the South Dakota businesses eventually negotiate with China, he said.

The mission was partly funded by a grant from the U.S. Small Business Administration.

"I think it's important to our taxpayers to know that these efforts aren't just a means for us to take a vacation trip to China. We're here to try to do business," Daugaard said.

For example, Millenium Recycling of Sioux Falls is looking into supplying baled cardboard and paper to a Chinese recycling operation, the governor said. Daugaard said he also met with some Chinese investors who are considering investing in an agricultural processing facility in South Dakota, but he said he cannot release any details about that project.

Steve Watkins of Orion Food Systems in Sioux Falls said he is holding seven meetings with potential customers and is exploring supplying pizzas to China's largest retail grocery store chain.

Mudge and Watkins said having the governor and other government officials set up and attend meetings helps assure Chinese officials that their businesses are legitimate.

"That's a big deal for us to be able to get in and get those doors open. Once the door is open, then let us do our work." Mudge said.

"You simply couldn't do this on your own," Watkins added.

State Agriculture Secretary Walt Bones said China already buys one-third of the soybeans grown in South Dakota, and China uses 37 million bushels a week, mostly for cooking oil and livestock feed. KFC is opening three stores in China every day, which means a lot of corn and soybeans are needed to feed chickens, he said.

Chinese people's incomes are rising rapidly, so they are looking to improve their diet with better food, including pork, Bones said.

"China just has a voracious appetite for everything we produce in the states," Bones said.

State Economic Development Commissioner Pat Costello said the trade mission's ultimate aim is to create jobs in South Dakota.

"it's about helping our South Dakota businesses sell their products to China and creating better opportunities for our citizens for better jobs in South Dakota," Costello said.

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