As the Obama administration this week encourages U. S. companies to boost investment and trade in Africa, one small business already was embracing the challenge with gusto.
Hann Powerboats, of Sarasota Fla., recently shifted from making fishing and patrol boats to also churning out high-powered gunboats that are fending off oil pirates off the coast of Nigeria.
Not only does owner Russell Hann find himself embroiled in a James Bond-style drama many days, he's also negotiating the hurdles of ramping up exports of highly sensitive products to Nigeria, a developing nation notorious for its corruption and often-chaotic bureaucracy.
"It's the Wild West," he says.
Despite the challenges, Commerce Secretary Penny Pritzker this week emphasized the vast potential of doing business in a sub-Saharan Africa whose economy is expected to grow 5.4% this year, vs. 4.6% for emerging economies overall. Pritzker and other U.S. officials met with hundreds of African leaders at a U.S.-Africa Business Forum in Washington, part of a week-long summit with the continent's leaders.
"Our companies know they have to navigate the obstacles to grow and stay competitive," Pritzker told USA TODAY.
Hann says his Nigerian business is generating 65% of the company's revenue. Without it, Hann likely would have closed his 21-employee shop several years ago.
His company began making fiberglass fishing boats in a 30,000-square-foot Sarasota factory in 2001. Its niche: 50-foot-long boats that can cruise at a brisk 56 miles per hour.
Business dried up as the recession began in 2007. Hann was about to close down when a Navy official who had seen an online photo of Hann's boat asked him whether he could make similar models for Navy exercises.
Hann's profitability was threatened again in 2011 by federal budget cuts. This time, salvation came in a decidedly unexpected form: a Navy official said a security firm in Lagos, Nigeria — MOP International Marine — wanted to use Hann's boats to ferry oil workers and escort oil tankers to and from rigs in the hazardous Gulf of Guinea.
Piracy of oil tankers in those waters is rampant. Hann's boats fit the bill because of their uncommon speed, size and agility. Equipped with automatic weapons, they would need to defend against pirate attacks, pursue the marauders to scare them off and patrol the region.
"My first thought was, what am I going to do with this?" Hann says. And, mindful of widespread Nigerian e-mail hoaxes, "Is this for real or is this a scam?"
After government officials confirmed the company's legitimacy, Hann met with their representatives and set about bullet-proofing his boat, equipping it with weapon mounts and spending $500,000 to retrofit his factory to make the boats out of aluminum instead of fiberglass.
More disruptive were the obstacles inherent in selling what the U.S. government deems a weapon to a Third World country. It took the State and Defense departments six months to vet the customer. "It was very, very frustrating," Hann says.
Hann and his colleagues had to travel to Lagos to train MOP workers to run and maintain his boats. On the flight over, an MOP executive told him simply: "Trust nobody."
Traffic on the streets of Lagos was in such disarray that it took Hann executives four hours to travel 2 miles, a waste of precious time in a three-day trip.
After Hann returned to the U.S., MOP workers called, wondering why his boat didn't go as fast as he described. It turned out the workers had pushed a lever down instead of up. Noting the endless distractions in Lagos, a crime-ridden city of 17.5 million, Hann says, "I don't know if they were paying attention."
Filling orders for spare parts is another ordeal. Nigeria's Internet and cellphone service is spotty at best, making it difficult to communicate with MOP officials. Hann says the company keeps extra inventory at its Sarasota headquarters to offset communication-related delays.
Hann also has learned to be patient. A Nigerian government agency sent him a letter of intent to buy two boats a year ago but has not followed through. "Bureaucracy," Hann says.
Political corruption is widespread in the country.
The U.S. Commercial Service in Lagos has aided Hann along the way, helping the company obtain licenses and set up boat demonstrations in the city.
"I would almost say never start (exporting) with Nigeria," Rebecca Armand, a senior commercial officer at the agency who worked with Hann.
Yet Hann says the rewards have far outweighed the costs, noting he now has two other customers in Nigeria. "You have a very loyal customer, and they will never leave you," he says of African buyers.
Plus, he says,"There's a tremendous sense of satisfaction that we're helping a nation grow."
"It's the Wild West," he says.
Despite the challenges, Commerce Secretary Penny Pritzker this week emphasized the vast potential of doing business in a sub-Saharan Africa whose economy is expected to grow 5.4% this year, vs. 4.6% for emerging economies overall. Pritzker and other U.S. officials met with hundreds of African leaders at a U.S.-Africa Business Forum in Washington, part of a week-long summit with the continent's leaders.
"Our companies know they have to navigate the obstacles to grow and stay competitive," Pritzker told USA TODAY.
Hann says his Nigerian business is generating 65% of the company's revenue. Without it, Hann likely would have closed his 21-employee shop several years ago.
His company began making fiberglass fishing boats in a 30,000-square-foot Sarasota factory in 2001. Its niche: 50-foot-long boats that can cruise at a brisk 56 miles per hour.
Business dried up as the recession began in 2007. Hann was about to close down when a Navy official who had seen an online photo of Hann's boat asked him whether he could make similar models for Navy exercises.
Hann's profitability was threatened again in 2011 by federal budget cuts. This time, salvation came in a decidedly unexpected form: a Navy official said a security firm in Lagos, Nigeria — MOP International Marine — wanted to use Hann's boats to ferry oil workers and escort oil tankers to and from rigs in the hazardous Gulf of Guinea.
Piracy of oil tankers in those waters is rampant. Hann's boats fit the bill because of their uncommon speed, size and agility. Equipped with automatic weapons, they would need to defend against pirate attacks, pursue the marauders to scare them off and patrol the region.
"My first thought was, what am I going to do with this?" Hann says. And, mindful of widespread Nigerian e-mail hoaxes, "Is this for real or is this a scam?"
After government officials confirmed the company's legitimacy, Hann met with their representatives and set about bullet-proofing his boat, equipping it with weapon mounts and spending $500,000 to retrofit his factory to make the boats out of aluminum instead of fiberglass.
More disruptive were the obstacles inherent in selling what the U.S. government deems a weapon to a Third World country. It took the State and Defense departments six months to vet the customer. "It was very, very frustrating," Hann says.
Hann and his colleagues had to travel to Lagos to train MOP workers to run and maintain his boats. On the flight over, an MOP executive told him simply: "Trust nobody."
Traffic on the streets of Lagos was in such disarray that it took Hann executives four hours to travel 2 miles, a waste of precious time in a three-day trip.
After Hann returned to the U.S., MOP workers called, wondering why his boat didn't go as fast as he described. It turned out the workers had pushed a lever down instead of up. Noting the endless distractions in Lagos, a crime-ridden city of 17.5 million, Hann says, "I don't know if they were paying attention."
Filling orders for spare parts is another ordeal. Nigeria's Internet and cellphone service is spotty at best, making it difficult to communicate with MOP officials. Hann says the company keeps extra inventory at its Sarasota headquarters to offset communication-related delays.
Hann also has learned to be patient. A Nigerian government agency sent him a letter of intent to buy two boats a year ago but has not followed through. "Bureaucracy," Hann says.
Political corruption is widespread in the country.
The U.S. Commercial Service in Lagos has aided Hann along the way, helping the company obtain licenses and set up boat demonstrations in the city.
"I would almost say never start (exporting) with Nigeria," Rebecca Armand, a senior commercial officer at the agency who worked with Hann.
Yet Hann says the rewards have far outweighed the costs, noting he now has two other customers in Nigeria. "You have a very loyal customer, and they will never leave you," he says of African buyers.
Plus, he says,"There's a tremendous sense of satisfaction that we're helping a nation grow."
