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Plan Your Market Entry Strategy with New Video Series Real World Advice from an International Trade Specialist

November 16, 2016

Debbie Dirr is an International Trade Specialist for the U.S. Commercial Service

It’s just before 9:00 am on a Monday morning when I settle in for another day’s work as an International Trade Specialist with the U.S. Commercial Service Cincinnati. I manage Cincinnati’s satellite office at Wright State University in Dayton, Ohio, serving as a consultant to U.S. businesses in order to help them plan strategies for export growth. I receive about 30 calls or emails a week from companies in my territory, which encompasses 24 counties in Southern Ohio. When it comes to export assistance, each business that I help has unique needs. There’s no ‘one size fits all.

Recently, the U.S. Commercial Service—with more than 100 offices across the United States and in U.S. embassies and consulates in more than 75 countries—further enhanced its customized outreach to businesses through the launching of a six-themed, How to Export video series. The series, which runs from November 2016 through early 2017, started with Get Ready to Export. The release of the second video topic, Plan your Market Entry Strategy, is an opportune time for me to share some insights into two key elements of export planning: Selecting International Markets and Researching International Markets.

Researching Markets

Download this video (19MB)

Regarding international market research, the most important element is having someone on the ground in a foreign market who can tell you what is going on and verify data and international market research.

For example, companies usually have an idea of where they want to export, but it may not always be the best market for a particular product. That’s where research can make all the difference. I once had a client who wanted to sell capital equipment to Chile for the mining industry. The company was sure that Chile would be a good market. Through a phone discussion with colleagues in the U.S. Embassy-Santiago who knew the industry, we determined that local projects relied on low-cost labor with little or no demand for that equipment. Instead, we turned to other markets. So a ‘negative’ finding can be just as valuable in saving U.S. companies time and resources.

U.S. businesses can obtain market information through many channels, such as agents, distributors, news articles or industry associations. The U.S. Commercial Service’s worldwide ‘boots-on-the-ground’ trade professionals also author Country Commercial Guides that provide the latest market intelligence for more than 140 countries. The agency also offers customized market research.

I would also offer the following advice: If you receive multiple inquiries from specific regions, think about locating a distributor who can introduce your products into markets more efficiently. This, in turn, may lower your shipping costs because of volume, which translates into giving your customers a better price and quicker delivery. Look at your competitors’ websites to see where their international distributors are located. This is another sign that can point your company in the right direction. Take advantage of country and industry trade data found on export.gov and consider the 20 Free Trade Agreement (FTA) countries where trade barriers have been reduced or eliminated for U.S. businesses.

Selecting International Markets

Download this video (21MB)

In selecting markets, businesses need to be aware that some markets will be more challenging than others. Exporting to Canada is a great first market for a company, rather than targeting a distant and complex market such as China. It’s important for a company to evaluate the costs, expenses and difficulties of going into a given market prior to selling there.

In addition, here are some questions that you should address:

  • What are your firm’s internal capabilities for exporting?
  • What standards or regulations might apply to your products or services?
  • Is compliance with foreign requirements worthwhile or even cost-prohibitive?
  • What are the competitive factors in a market (both domestic and foreign)?

Many problems arise because management may fail to coordinate communication among sales, accounting, operations, or other departments. If overlooked, this can cause problems with customs clearance, shipping decisions, and even getting paid. By communicating and planning ahead, your company will be better prepared to handle exporting to new markets.

For example, if a U.S. company is exporting to Saudi Arabia, there are many requirements for the commercial invoice alone. Some of these include a statement that the products being shipped are of U.S. origin, any foreign components must be listed with country of origin and percentages, and the invoice has to be certified/notarized by the U.S. exporter’s local chamber of commerce or sent to a Saudi Arabian consulate for certification.

Finally, it’s important to think regionally. For example, by selling to a country like Singapore, a gateway to Southeast Asia, your firm will have easier access to many other Southeast Asian countries.

There are many other elements of planning your export strategy as well. Later this month, I will post a blog on export counseling. Now, it’s time to meet another client.

 

 

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The Hershey Company: Nutritional Mainstream Commerce in Ghana

November 15, 2016

Bill Fanjoy is the Director of the U.S. Commercial Service Team in Virginia.

This post contains external links. Please review our external linking policy

Four years ago, a business consultant from Project Peanut Butter (PPB) walked into my International Trade Administation (ITA) office in Arlington, Virginia, and showed me a “60 Minutes” news clip called “Plumpynut: The Miracle Food.” It described a ready-to-use therapeutic formula (RUTF) that treats a malnourished child in a number of weeks. RUTFs are much more accessible and inexpensive than going to a hospital, which is often too far away for many living in rural Africa. This, I thought, could easily be as important commercially and socially as powdered milk was in the 1970’s. First introduced to African mothers through relief groups, powdered milk is now part of everyday African family life, on the grocery shelf next to bread, sugar and cooking oil.

Team

Bill Fanjoy celebrates an export success with Ghanaian children while serving as the acting commercial officer at the U.S. Embassy in Accra.

“Can you help me find local partners in Ghana, so we can start up RUTF production there?” he asked, at the conclusion of the video. PPB had just forged a relationship with the Hershey Company, who would fund a factory, but still needed help finding local partners. The plan was to find palm oil producers, to provide local ingredient, and groups of buyers to distribute the finished product. Within six weeks, ITA’s Commercial Service team at the Embassy in Accra set up on-the-ground meetings for PPB with palm oil producers and non-profit organizations that wanted to distribute RUTF for their relief programs.

Our Commercial Service team supported PPB through its factory renovations, helping complete local business registrations, secure local utilities, formalize local partnerships, and set up quality control systems. The result today is a full production factory in Kumasi, Ghana, employing 20 Ghanaians and producing 65,000 sachets daily. And after passing a joint United Nations-Medecins Sans Frontieres quality inspection last year, the facility is qualified to produce RUTF for sale to U.N. agencies. The peanuts and equipment are American, palm oil and processing are Ghanaian and distribution is non-profit relief and Ghanaian Government.

“Just the beginning”, says partner, Hershey Company

End of story? “No, this is just the beginning,” says Hershey Director of Corporate Social Responsibility Jeff King. Using the same factory, Hershey has added production of a second nutritional product called “ViVi,” a reduced version of RUTF, aimed at providing a peanut-based supplement for Ghanaian school lunch programs. After just one year of production, Hershey’s pilot program provides ViVi to 50,000 Ghanaian students EVERY DAY, bears all the expenses, and has plans to continue and grow. Its full-growth market projection is 1.3 million students, but it will be a great deal higher than that if ViVi goes the way of powdered milk!

Vivi’s trajectory into mainstream distribution will hinge on Hershey’s present and final phase of their business model: reducing costs and increasing production through buying more local Ghanaian groundnuts. Along with USAID, Hershey Company is training Ghanaian farmers to grow safe groundnuts, specifically for ViVi production, and purchasing necessary U.S. roasting equipment. The result will be a significant cost-reduction in production, mainstream distribution, increased student distribution (paid from mainstream distribution revenue), a new roasting factory and a system of collecting groundnuts from approximately 7,500 Ghanaian farmers. That’s right, while Hershey champions a new commercial market, providing nutritional benefits to thousands of students, it also creates a supply chain of 7,500 Ghanaian farms, thus insuring its future and investing in Ghana’s.

This collaborative Hershey model could be the future for U.S. companies trying to gain market share in Africa, while also investing in the future of the economy they’re accessing. Speaking on Hershey Company’s Africa strategy, Jeff King says, “ViVi is a Hershey investment and comittment towards nourishing kids, providing Ghanian jobs and improving farmer income.”

This is the kind of work that makes me proud to be a public servant, and it’s a great testimonial to how international trade and the work of the U.S. Commercial Service can support U.S. companies and organizations, while also bringing benefit to developing economies.

http://www.export.gov

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Connecting America’s Veterans to Meaningful Civilian Employment – A Win-Win Proposition

November 10, 2016

This month, SelectUSA is pleased to feature a new multi-part guest blog focusing on workforce opportunities. These posts are authored by members of the Federal Interagency Investment Working Group (IIWG), which is responsible for coordinating activities across federal agencies that promote investment. Read the first entry here.

By the Veterans Benefits Administration’s Vocational Rehabilitation and Employment program

This post contains external links. Please review our external linking policy

The Department of Veterans Affairs’ Veterans Benefits Administration (VBA) – which provides a variety of benefits and services to Service members, veterans, and their families – is dedicated to helping veterans attain personal and economic success by building on their unique attributes.

While veterans can invariably face challenges transitioning back to civilian life, the successful integration of our nation’s heroes into the work force makes both families and communities at-large stronger and more stable.

Moreover, companies can benefit immensely from hiring veterans – a unique pool of experienced, dedicated workers with valuable leadership, teamwork, and cross-functional job skills.

This is why connecting America’s veterans to meaningful civilian employment is one of the Administration’s highest priorities.

The Vocational Rehabilitation and Employment (VR&E) program provides a wide range of vocational and employment services to assist eligible veterans with service-connected disabilities and an employment handicap prepare for, obtain, and maintain suitable employment.  Services are designed to help them receive the skills required to pursue career goals aligned with their rehabilitation plan. These services include:

  • Interest, aptitude and ability assessments
  • Occupational exploration, and career counseling
  • Job training, resume development, and job seeking skills coaching
  • Employment placement services, employment accommodations, and post-employment follow-up

Through the VR&E Service’s Employment Coordinators (ECs) the VBA establishes relationships with employers and partnerships with other organizations to advocate for placement of Veterans.  VR&E’s ECs partner with employers in order to:

  • Address their workforce needs, and education and skills required for placement
  • Promote greater awareness of employment opportunities for veterans with service-connected disabilities
  • Continue communication for the purpose of developing working relationships
  • Ensure the Veteran and the Employer are a match
  • Promote the use of special hiring programs such as the Non-Paid Work Experience, Special Employers Incentives, On-the-Job Training and Apprenticeship to increase Veterans opportunities for placement into meaningful careers
  • Establish Memorandum of Understandings to encourage partnership opportunities between the employer’s local offices and VA’s regional offices, if needed

VR&E’s  Employment Coordinators can assist employers through the following programs:

  • VR&E on the Job Training Program (OJT)

Through the on-the-job training program, VR&E subsidizes Veterans’ salaries so that employers pay an apprentice-level wage while training Veterans. As the Veteran progresses, the employer pays a larger portion of the Veteran’s salary, until the training program is completed and the employer is paying the full salary.  Please review our Understanding On-The-Job Training & Apprenticeship Approval Guide for employers and sponsors.

  • VR&E Special Employer Incentive Program (SEI)

Through the Special Employer Incentive program, employers may receive an incentive to hire Veterans facing barriers to employment, which includes reimbursement of as much as 50 percent of the Veteran’s salary for up to six months. benefits.va.gov/vow/docs/SEIFlyer.

  • VR&E Non-Paid Work Experience Program (NPWE)

The Non-Paid Work Experience program allows local, state, and federal government offices to temporarily employ a Veteran without having the position count against the agency’s full-time equivalent allocation. VR&E pays the Veteran a monthly subsistence allowance while he or she learns valuable work-related skills and experience. Though the office is under no obligation to hire the Veteran, the goal of this program is for the Veteran to obtain full-time, permanent employment in the office where he/she is placed or a similar office. Please see VA’s Non-Paid Work Experience video to learn more about this program.

  • Work Opportunity Tax Credit

The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment.  WOTC joins other workforce programs that incentivize workplace diversity and facilitate access to good jobs for American workers. To learn more please see benefits.va.gov/vocrehab/docs/WorkOpportunityTaxCreditFactSheet.

As a member of the IIWG, the VBA gives international firms the chance to invest in one of America’s greatest assets: its people. To learn more about how your company can participate in these programs, please visit VR&E at http://www.benefits.va.gov/vorehab/index.asp.

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U.S. Medical Device Industry and the Trans-Pacific Partnership

November 9, 2016

Gerry Zapiain is a Senior International Trade Specialist in Industry and Analysis’ Office of Health and Information Technologies.

Forecast to grow to over $360 billion by 2017, the global medical device market offers tremendous opportunity for U.S. manufacturers. The Trans-Pacific Partnership (TPP) Agreement is expected to reduce many barriers for U.S. medical device producers and open up even more new business opportunities in some of the fastest growing markets in the world.Medical Devices

ITA’s comprehensive 2016 Top Markets Report for Medical Devices defines a medical device as “any piece of equipment or apparatus used to treat or diagnose an illness and comes into direct contact with the patient.”

The report describes the expansive growth potential for U.S. medical devices in international markets, provides an overview of the challenges and barriers, and forecasts some of the benefits the medical device sector will experience with the TPP agreement.

The U.S. medical device industry is expected to remain highly competitive in the global market. The industry has increasingly embraced globalization. Global demand for medical devices is being driven by increasing expenditures and initiatives on health care, including the building of new hospitals and clinics, establishment of public health insurance, and greater emphasis on improving the health of the general population. In addition, the increase in lifestyle diseases, aging populations, and income levels in developing countries will further catalyze demand.

Currently, The United States exports $5 billion in medical devices to TPP-designated markets annually. The Trans-Pacific Partnership agreement is dedicated to increasing the trade in goods and services in ways that are critical to U.S. medical device producers and in terms that go beyond past trade agreements.

Key elements in the agreement include:

  • Enhancing dispute resolution mechanisms
  • Improving government procurement practices
  • Stronger intellectual property protections
  • Removing tariffs on medical devices that can be as high as 30%
  • Increased regulatory coherence among the member states
  • Improving transparency with respect to reimbursement and pricing

Ultimately, the TPP will help to make U.S. products more competitive in the region, benefiting U.S. companies that export to TPP signatory countries. Summary case studies reflecting potential TPP agreement opportunities are below:

Malaysia

Malaysia represents one of the more vigorous and vibrant medical device markets in Southeast Asia, presenting opportunities for U.S. exporters to expand their sales into a rising economy. Increasing patient access to healthcare will remain a key focus for the Government of Malaysia over the next 5 years, including upgrading facilities and equipment, and expanding delivery systems.

Top Markets Report Medical Devices Country Case Study: Malaysia

Japan

Japan’s market for medical devices and materials continues to be among the world’s largest. According to the latest official figures from the Ministry of Health, Labor and Welfare (MHLW) Annual Pharmaceutical Production Statistics, the Japanese market for medical devices and materials in 2013 was approximately $33.6 billion (up 3.2% from 2012 in yen terms). Japan’s total imports of U.S. medical devices were approximately $7.7 billion in 2013. In the near-term, the market is expected to increase due to Japan’s aging population and continued demands for advanced medical technologies.

Top Markets Report Medical Devices Country Case Study: Japan

For more information on this historic trade agreement and the future opportunities for M&E exports, please download ITA’s Medical Devices Top Markets Report and visit our TPP site.

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Partnerships Come in All Shapes and Sizes

November 7, 2016

Jamie Merriman is is the Acting Director of ITA’s Office of Strategic Partnerships

This post contains external links. Please review our external linking policy

In the government, as in many other places, you often hear “do more with less.” Our Strategic Partnership Program helps us to do just that. One example of a partnership in action is the Grow Global series led by our Strategic Partner, American Express.  This year, the Grow Global series visited Baltimore, MD and Long Beach, CA. It brought together small and medium-sized businesses who were seeking to export or expand their export markets.  American Express provided their organizational and programmatic support to the events.   During the panels and presentations, ITA told the audience about the various U.S. government resources available to them, including our Top Markets reports. We brought our industry experts who could answer their sector-specific questions and helped guide them to the right market. Attendees had the opportunity to connect directly with free and low-cost trade resources that they may not have otherwise been aware of.

partnerships

These events allow both ITA and American Express to leverage their strengths to provide actionable export information to U.S. companies.  More than 70 percent of the world’s purchasing power is located outside of the United States, while less than one percent of America’s 30 million companies export – a percentage that is significantly lower than all other developed countries. “The ITA has been an important partner to the American Express Grow Global program, providing important resources and information to help U.S. companies take advantage of exporting opportunities and to grow their business.” – Rosa Alfonso-McGoldrick, Vice President, American Express Global Commercial Payments.

You don’t have to be a large corporation to be a partner with ITA. We also partner with smaller businesses, universities and associations. One example is our partnership with the non-profit association WIPP (Women Impacting Public Policy).  ITA and WIPP worked together to develop and launch the ExportNow webinar curriculum in 2015.  ExportNow, a series of webinars which provides an overview of export sales channels with detailed segments on market analysis and building marketing plans, including financing requirements and opportunities, is targeted to WIPP’s members and other U.S. small and medium-sized enterprises.  WIPP and ITA continue to collaborate on new webinars in the series, and have also engaged other ITA partners to focus on the legal and financial aspects of exporting.  “WIPP’s goal is to provide our members with the best resources available to help them launch and grow their exporting businesses. In that regard our partnership with ITA, which gives us access to their experts, materials and know-how, has been invaluable.”  Jane Campbell, President of WIPP and Director of the National Development Council’s Washington office.

Our partnerships enable us to broaden and deepen our outreach and also provide ITA with important feedback. Benefits include:

  • Growing the U.S. exporter base, thereby supporting U.S. jobs at wages 13 to 18 percent higher than non-exporting firms;
  • Helping ITA target its products and services to the needs of America’s businesses; and
  • Increasing awareness of the benefits of international trade and foreign direct investment to the U.S. economy.

Partnerships come in all shapes and sizes. The Strategic Partnership Program enables ITA and its partners to each focus their core competencies in contributing to the larger goal of U.S. economic success, creating the capacity to achieve more than we could accomplish alone.  To reach that goal requires open communication, clear objectives, and a shared sense of mission.  Since his first day in office, President Obama has recognized the importance of public private partnerships, and called on agencies and departments to increase their collaboration with the private sector.  ITA’s Strategic Partnership Program is a prime example of that collaboration, and we look forward to continued collaboration with our private sector partners in the years ahead.

To learn more about who our partners are, visit http://export.gov/cspartners.

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On Long Island, Startups Emphasize Opportunities to Trade at Startup Global Event Hosted by U.S. Department of Commerce and Global Innovation Forum

November 4, 2016

Elizabeth Montaquila is a Communications Specialist at International Trade Administration

On October 27, the U.S. Department of Commerce’s U.S. Commercial Service, NFTC’s Global Innovation Forum (GIF), Small Business Administration and Stony Brook University co-hosted Startup Global Long Island, an event to help startups launch their products or services in international markets. The hosts welcomed over 80 guests, including startup founders in industries from health-tech to agribusiness.

The event featured panels on the global market outlook for startups, intellectual property protection and crafting an international business strategy – all designed to prepare entrepreneurs to engage in international markets and plan for potential challenges.

meeting

Michelle Gillette-Kelly, owner of Ms. Michelle’s gluten free cookies, talks about how she started her company and is now focusing on entering new global markets, with the help of the Commercial Service.

Jake Colvin, Executive Director of GIF, led a discussion on the path to going global, highlighting that, “for all of the anxiety we hear on the campaign trail about trade, the reality is that startups and small businesses today are naturally global.” He continued, “the Internet makes it easy to leverage global markets to support local businesses and jobs.”

During the discussion, Michelle Gillette-Kelly, the owner of Ms. Michelle’s, a gluten-free cookie company, spoke about her startup’s global journey during the first panel on the global outlook for startups. She said, “With my brick-and-mortar bakery, I realized I wasn’t reaching enough people, so I decided to go into manufacturing and sell internationally. Using www.trade.gov I found people at the U.S. Commercial Service who helped me meet European buyers directly to find out which countries might be interested in gluten-free cookies. I am now targeting Canada, the Netherlands and Italy as my first markets and I hope to be exporting soon.”

During the panel on intellectual property protection, IP trade and legal specialists outlined the different forms of IP protection, offered guidelines on when they should be used, and warned against failing to adequately protect IP in international settings. “It’s important to pursue trademarking of your brands and logos before you start printing or shipping anything, not only in the United States, but in all major markets you plan to export to, before you get a cease and desist letter,” cautioned George Likourezos, Intellectual Property Counsel at law firm Carter, Deluca, Farrell & Schmidt.

Dr. Satya Sharma, the Executive Director of the Center of Excellence in Wireless and Information Technology (CEWIT) at Stony Brook University, led the final panel of the day on resources available to startups to go global and develop an international business strategy. The panelists emphasized that free resources are available from local, state and federal government agencies, such as market entry research, business planning and financing.

The event was a part of the Startup Global initiative, an ongoing partnership between GIF and the Commerce Department to help entrepreneurs think globally from Day One, which has held similar events around the country including in New York City, Seattle, Nashville and Washington, DC.

The day concluded with key takeaways from the day and a look forward. “We want the next administration to know what has and hasn’t worked for startups and to remove any obstacles that might prevent a U.S. company from being competitive. We welcome startups to work with all the public sector resources represented here today, and let us know how we can improve,” noted Josh Mandell, Senior Adviser for Innovation and Competitiveness at the U.S. Department of Commerce.

About the Global Innovation Forum

The Global Innovation Forum is a nonprofit startup that connects entrepreneur, small business, development, and university communities with policymakers and select corporations to explore the opportunities and challenges of engaging in the global marketplace.  GIF serves as a hub for startup, university and development communities around the world to communicate with officials and corporations, discover public and private resources to help them succeed, and improve the public policy landscape to enable global innovation. GIF is a project of the 501(c)(3) National Foreign Trade Council Foundation.

For more information, contact: Kaveri Marathe, Deputy Director, Global Innovation Forum, Tel: (202) 464 2035, kaveri@globalinnovationforum.com

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Workforce Development with UNICOR

November 3, 2016

This month, SelectUSA is pleased to feature a new multi-part guest blog focusing on workforce opportunities. These posts are authored by members of the Federal Interagency Investment Working Group (IIWG), which is responsible for coordinating activities across federal agencies that promote investment. 

This post contains external links. Please review our external linking policy

By UNICOR

Companies looking to establish, reshore, or expand manufacturing operations in the United States can benefit from a unique federal partner that exemplifies the business principle of doing well by doing good.  This partner – which offers modern facilities as well access to a reliable U.S. workforce with a broad spectrum of manufacturing and technical expertise – is UNICOR, a government corporation under the U.S. Department of Justice.

Let’s begin with the idea of doing good.

Since 1934, UNICOR has been a crucial correctional program, with a mission to provide federal inmates valuable “real world” job and life skills training to enhance their prospects for employment and reentry success upon their release from prison. President Obama has emphasized the Administration’s goals of helping inmates prepare for reentry, stating: “Our prisons should be a place where we can train people for skills that can help them find a job…” UNICOR provides job skills to approximately 17,500 inmate workers annually. Upon release, program participants are 24 percent less likely to recidivate and 14 percent more likely to find and maintain sustainable employment, than those who did not participate. These numbers mean more productive, law-abiding citizens, more intact families, and safer communities.

UNICOR is good for local economies as well. On average, 72 percent of UNICOR’s revenues return to the economy from the procurement of ancillary equipment, supplies, and services within the region of factory production. Companies that first manufacture with UNICOR may even grow to the point of building their own factories. Additionally, the UNICOR workforce can add to the skilled labor force of the community upon release from prison.

Now on to doing well.

UNICOR serves as a viable business incubator or manufacturing extension for business operations. When companies lack capital to build new or additional factories in the United States or face other constraints, UNICOR can provide immediate access to factory and warehouse space nationwide. UNICOR also offers a flexible labor force to help meet companies’ surge production needs. Moving production to the United States – the world’s largest market – can help companies reduce transportation costs, increase sales, as well as lower production costs, most notably by avoiding the significant outlays of purchasing equipment and leasing factory space.

UNICOR also possesses repatriation (reshoring) authority to produce or assemble products for a company that certifies they are currently produced, or would otherwise be produced, outside the United States. UNICOR can also produce non-repatriated products for the private sector when the work performed will not displace sector jobs, inmates are paid the local prevailing wage, and other conditions are met. UNICOR also provides commercial market services (e.g., call centers) to the private sector when doing so does not displace local workers.

Through the Federal Interagency Investment Working Group, SelectUSA and UNICOR have partnered to assist and encourage companies to create and retain U.S. jobs both through UNICOR factories and the private sector at large. By working with UNICOR, companies can obtain financial and manufacturing benefits, help inmates obtain technical skills, and turn distressed areas into vibrant hubs of economic activity. To discuss opportunities with UNICOR, visit www.unicor.gov or email Audreylambert@usdoj.gov.