J. Dan Kelley is chief executive officer of Tierra Dynamic, a Phoenix-based environmental firm specializing in removing toxins from soil and water. Kelley’s firm cultivates bacteria that occur naturally, and a special process induces them to eat spilled hydrocarbons at an accelerated rate. “We increased their appetite,” says Kelley. Tierra Dynamic has negotiated the rights to another patented technology that destroys PCBs (polychlorinated biphenyls)—a particularly lethal source of carcinogens.
A few years ago, Kelley and his 30 employees set their sights on entering some emerging markets. The move was a matter of common sense. The U.S. environmental industry is very competitive. In contrast, Kelley says, “The environmental industry is new to many developing countries, and we can compete better over there than we can in more developed countries.” He explains that competitors with similar technologies tend to be bigger firms for which a $300,000 contract isn’t worth the effort. “There’s a big void in the market, and we’re happy to fill it.” But Tierra needed guidance.
With help from the U.S. Commercial Service, Kelley’s international business has gone from nothing to 25 percent of annual revenues. In the process, his key assumptions about the viability of developing markets were challenged.
Tierra Dynamic began its international business in Latin America and Southeast Asia in the late 1990s. Those markets were booming at the time but soon experienced recession and currency devaluation. Business, which began well, evaporated not only because of economic conditions but also because countries in those regions lacked laws requiring companies to clean up their environmental messes and lacked the basic infrastructure that needed cleaning, such as sewage systems.
Faced with an unacceptable level of uncertainty, Kelley headed to Western Europe, where the legal system recognizes third-party liability for environmental damage. He participated in a Commercial Service trade mission to Italy and Spain. Encouraged by interest expressed by potential partners and purchasers, Kelley later returned to Italy to participate in a trade show and to close some deals. “The Commercial Service in Milan found the partners for us,” says Kelley. “We couldn’t have done it without them.” In fact, he adds, “Our success internationally over the past 10 years is a direct result of the substantial help … provided by the Commercial Service.”
Kelley says Tierra has signed one contract worth $1 million and is negotiating another of similar value. The company will do soil and water remediation at a solvent plant and a pharmaceutical factory. Those projects, which are expected to be long term, will add 10 percent to the company’s total revenue for the year.
Kelley has this advice to other U.S. businesses contemplating entering international markets:
In his travels, Kelley found that “‘Made in the U.S.A.’ means everything. It means the best.” But more motivates Tierra Dynamic than pride of place and any competitive advantage associated with it. “This is an idealistic business. At the end of the day, I want to say I got this paycheck for doing something good for somebody else.”
How can you make the “Made in the U.S.A.” label work for you?