Asia is back.
Shipments to Asia are seen taking a bigger slice of Orange County’s export pie next year and beyond in a rebound from the downturns spurred by the currency crisis of the late-1990s and the technology meltdown of 2000.
Next year’s exports to Asia are seen surpassing 2000’s peak, coming in at $4.3 billion, according to a report by California State Univer-sity, Fullerton.
Driving the growth: a resurgent Japan,OC’s second largest market after Mexico,and South Korea.
Then there’s China.
For years, China has been more of a manufacturing hub than an export market for OC companies. That’s seen changing with a projected 45% increase in shipments to China next year, for a total of $930 million in OC exports.
China is seen displacing Canada as the county’s third-largest trading partner. Just two years ago, OC companies were estimated to have shipped a mere $280 million worth of products to China.
“Our China sales are up 50%,it’s probably one of our best markets,” said Jim Skelly, vice president of international sales for Huntington Beach food service tray maker Cambro Manufacturing Co. “We have good distributors there and it’s a growing economy.”
China is helping to boost global sales at Lake Forest-based disk drive maker Western Digital Corp., spokesman Steve Shattuck said.
“The personal computer industry in general is putting more emphasis on higher growth markets like China and India,” he said.
For Fullerton-based Beckman Coulter Inc., China is “doing outstanding,” said Ed Ehrman, director of planning for international operations for maker of medical diagnostic and research products.
The growth in exports to China comes with little help from the weak U.S. dollar, which is boosting sales in Europe.
“In China it’s no help, because the yuan is pegged to the dollar,” said Esmael Adibi, director and professor of economics at Chapman University in Orange.
Nor is the weak dollar much help in South Korea or Taiwan, Adibi said.
In fact, the dollar could be dinging some companies in Asia.
In September, Santa Ana-based technology products distributor Ingram Micro Inc. said it was buying Australia’s Tech Pacific for about $490 million.
But the time the deal wrapped up earlier this month, it cost nearly $40 million more than expected because of the swooning U.S. dollar.
But the weak dollar is seen helping elsewhere, including Japan.
Next year, local exports to Japan are seen rising 7% to $1.3 billion, according to Cal State Fullerton. That puts Japan nearer to its 2000 peak as an export market. Local companies sent $1.5 billion to the country in 2000.
(Cal State Fullerton’s figures capture shipments from OC but don’t include sales by subsidiaries of OC companies based in other countries.)
Europe, where the impact of the weak dollar is strongest, is seen taking in 11% more in OC shipments in 2005 for a total of $2 billion.
Skelly of Huntington Beach’s Cambro said his company has a lot of business in Europe,about 70% of its global sales take place there.
“We do have strong growth in Europe,it’s one of our best performing markets,” he said. “But it’s not because of the dollar. We don’t flip-flop around with the prices based on currency.”
Cambro is seeing a gain when it converts profits in euros back to the dollar, he said.
The weaker dollar is helping Beckman compete with rivals in Japan and Europe, according to the company’s Ehrman.
“Japan and Europe are our toughest markets,” he said. “But right now our entities outside the U.S. buy product from us in dollars, and that allows them to be a lot more cost competitive.”
