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By successfully introducing Brits to an “exotic” product and assuring the quality and reliability of its supply chain, Scott Farms’ sweet potatoes are now on firm ground in Europe.

A staple in the diet of Native Americans even before Columbus arrived, the sweet potato had long been viewed as a quirky vegetable served mostly during the holidays. And across the pond in Europe, anything other than a white potato was unheard of.

But things have changed for the lowly spud, which is now known to be packed with vitamins, dietary fiber and numerous other health benefits.

Today, U.S.-grown sweet potatoes are eaten raw, steamed, boiled and fried. There are now sweet potato chips and microwaveable versions of the tuberous root, presenting abundant sales opportunities here and abroad.

In North Carolina–the nation’s premier sweet potato grower–the fortunes of family farms are rising as they increase production to meet the demands of a thriving export market.

At the headquarters of Scott Farms in Lucama, N.C., just one-half mile from his birthplace, President and Co-Owner Linwood “Sonny” Scott Jr. takes satisfaction in knowing that his own farm has helped kick-start an export market that has served his customers and family well.

In a recent 12-month reporting period, Scott Farms shipped about 20,000 tons of sweet potatoes (or more than 1,000 sea containers) to the United Kingdom, the company says.

Its decision to export some of the sweet potatoes that it plants alongside tobacco, wheat, soy beans and corn was a response to an increasingly crowded domestic market, says Kelly McIver, executive director of the North Carolina Sweet Potato Commission.

“If there were no export markets the (domestic) markets would be flooded” and prices would be depressed, McIver explains. With the U.S. accounting for only four percent of the world’s population, selling the agricultural commodity overseas was a smart move by Scott Farms, she says.


From 2006 through 2016, sales of sweet potatoes to buyers in the U.K. by all North Carolina producers jumped from $6.9 million to $66.4 million in revenues, according to figures from the state’s Department of Agriculture and Consumer Services, with shipments to all partner countries increasing from $10.7 million to $138.1 million over the same period.

Digging In

Before Sonny Scott and his family could export, they needed to assess whether a sufficient market existed–or could be created–to justify the time, manpower and costs of going international.

While the U.K. imports 40 percent of all the food consumed inside its borders according to Global Food Security, a sustainable-farming advocate, sweet potatoes made up only a small sliver of such imports when Scott Farms began looking offshore in 1999.

The company chose to take its time in deciding if, and how, it would export to the U.K.–a good thing, says Michelle Wang, an international marketing specialist at the agriculture department, as it can take two to three years for a firm to start exporting a known product and up to five years for a product with little prior exposure to gain traction.

At first, Scott Farms began shipping “a couple loads here, a couple loads there,” recalls Dewey Scott, one of Sonny’s two boys and the farm’s vice president of sweet potato operations.

Utilizing the services of a local forwarder who hauled their potatoes from farm to port, Dewey began getting a better understanding for logistics. “Because we were doing small volumes we were able to learn how the process worked,” he says.

But with inconsistent loads moving out of Charleston and Norfolk, finding a reliable berth on vessels remained a concern. Later, as a year-round exporter, Scott Farms was able to negotiate confirmed space on ships departing from the Port of Wilmington (N.C.) and utilize a direct, faster shipping lane to the U.K.

Scott Farms also began cutting into the prospects of sweet potato growers in places like Honduras and Egypt whose insufficient storage capacity affected the taste of their product, says McIver of the sweet potato commission, who believes that quality control and branding are two sides of the same coin.

“You have to be very careful and know what you can and cannot do,” McIver says. “If a product is subject to spoilage and sea transit will take time, then that represents a risk,” she says.

“Buyers will switch easily to other suppliers if expectations are not met,” warns the Centre for the Promotion of Imports, a Netherlands-based trade group that encourages U.S. exports. It adds, “Make sure your products can compete with the quality produce of other suppliers, optimize your production and logistical processes or focus on different varieties…”

Branding was easier overseas “mostly because the pool was smaller and you can hit the ground running,” Dewey explains. “We didn’t just want to sell sweet potatoes, we wanted to sell our sweet potatoes.”

With consumers increasingly embracing the farm-to-table mantra, he adds, “People nowadays, they want to know the people who produce their products,” even if they’re almost 4,000 miles away.

Port or Starboard?

By 2005, and with market prospects in the U.K. looking sustainable, the Scott family had to make a critical choice: keep logistics in the hands of a third party or bring them in-house.

“It takes guts not to lean on anyone and to carry out the burden on oneself,” McIver says of the family’s decision to take direct charge of its supply chain and establish a subsidiary, Scott Farms International, to ratchet up overseas sales and marketing.

“The company needs to have infrastructure set in place, they need to have time to spare … they have to have capital,” she says, recounting just some of the requirements of a hands-on approach to exporting.

But as a family brand with a reputation to uphold for year-round freshness, Scott Farms wanted to “keep as much control of that product in-house for as much as possible,” recounts Dewey Scott.

There are a variety of reasons for adopting the subsidiary model of exporting, explains Charles Baldwin IV, a partner at the Wilmington law firm of Brooks Pierce, which offers strategic business counseling and tax planning to firms engaged in global trade.

Using an independent contractor to represent an exporter thousands of miles away “in the long term may be more costly” if he or she does a poor job, Baldwin says. In addition, “They’re going to want a year-or-two agreement and typically they’re going to want exclusivity.” Further, under some foreign laws, just sending a product sample or promotional materials to an overseas agent may constitute a binding agreement to use that firm exclusively, so know the person you’re dealing with, Baldwin warns.

To establish a subsidiary, “You look first to the tax rate in each country. Then, you look into whether there is a tax treaty in the country that might avoid double taxation. Then you look at currency and exchange controls,” he continues. And be careful about the fine print, he says, as some countries require a percentage of local ownership in the new entity or local representation on the company’s board of directors.

“I would find the best foreign partner you could … and add your people,” the Wilmington attorney emphasizes. “You want to make sure you have good and regular oversight by your people.”

For Scott Farms, a quick trial run with entrepreneur Stan Smith blossomed into what is now a decade-long relationship. Smith, who had 30 years of experience with fresh produce marketing when he first met the Scotts in 2006, served only about six months as a consultant before the family asked him to come in-house. As International CEO, he is now responsible for strategic business development and coordination of financial controls.

Prior to joining Scott Farms, “I’d never eaten a sweet potato,” confesses Smith. Now, he says, his favorite way of eating the vegetable is diced, steamed and served with grilled fish.

Smith admits that using a broker may be advantageous in the short run for U.S. firms, but he says a broker’s attention can sometimes be distracted.

“The broker by their nature is dealing with many, many brands, naturally,” he says. “A broker that’s operating on commission does not have … interest in the brand of the product.”

Dishing Up Advice

As Scott Farms International’s doors opened, Smith leaned on a deep network of contacts to get consumers interested in the health properties and multiple uses of the company’s product before launching a full-throated marketing campaign, “Love Sweet Potatoes,” that utilized cooking demonstrations, recipes, advertising and brightly emblazoned lorries rolling down U.K. motorways to drive the campaign’s messaging home.

“It was about opening people’s minds about what could be done with the product,” says Garry Smith, the U.K.-based international commercial director and Stan’s son.

Consumers found that they could not only grill sweet potatoes and add them to salads during the summer but could roast them or add them to soups and stews in colder months, incorporating the U.S. import into a year-round diet.

But in a country synonymous with fish and chips and teeming with pubs, it was Scott Farms’ decision to enter the snack foods business that represented its biggest breakthrough.

“We knew we created a fantastic product with the sweet potato chip,” relates Garry Smith, explaining that produce imported from North Carolina is peeled, sliced, and fried with a pinch of sea salt much closer to the end-consumer.

In a shrewd tactical move, in 2014 the Smiths chose to hand out sample bags of the new chips at Fruit Logistica, the Berlin trade show that’s considered a must-attend event for sales and relationship-building within the fresh fruit and vegetable industry.

While 58,000 show-goers caught up on the latest in packaging, logistics and technology, they munched on Scott Farms’ new chips. “The consumer education on the continent is done by client and trade shows,” says Dewey Scott, who regularly attends the massive Berlin show.

Newcomers to exporting, watching their budget, may want to tap into the resources of a variety of agencies stateside that can help them with the costs of getting to and participating in shows like Fruit Logistica, say Wang and McIver.

The North Carolina Department of Agriculture can serve as the activities manager for a company exhibiting abroad, says Wang, who shows up at such events about four times a year. In addition, working with the U.S. Small Business Administration, the State Trade Expansion Program, or STEP, can reimburse qualifying companies for up to $3,500 in trade-related travel expenses and up to $2,000 for export or marketing services when entering a new market.

Likewise, the Foreign Agricultural Service, a USDA initiative, helps would-be exporters identify initial opportunities and secure space at trade shows or on a trade mission. Other agencies, such as the U.S. Commercial Service or a Small Business Trade and Development Center, offer access to market research, supply-chain counseling and international matchmaking.

By 2016, with the opening of a second European office to serve markets in the Netherlands, Spain, France and Germany, Scott Farms had diversified its overseas operations in terms of both geography and product development, moves that McIver says illustrate a cardinal rule: “Spread risk as much as possible.”

Risks that are taken should be calculated carefully, adds Dewey Scott, referencing his own company’s reluctance to enter Russia full-bore. “A bad move with the best intentions can take you back a long way,” he warns.

“We have never serviced the Russian market directly,” explains Stan Smith, who from the U.K. now oversees all continental markets. “We did not have a clear vision for the risk versus the reward the market offered in our business model.” Products have been introduced in Russia opportunistically via a third party, he says.

Steady as She Grows

As Scott Farms continues to grow, the family-owned business makes it a point to remember what first earned it a place at the international food table: reliable delivery of a fresh product that’s marketed overseas by people who understand the company’s culture.

And, to uphold its brand reputation, the sixth-generation farm family hasn’t rushed into any big decisions, whether it be a new market, infrastructure or people.

The Scotts learned supply-chain lessons by working with a local forwarder, but it wasn’t until 2005 that they committed to a hands-on approach by creating a subsidiary.

Similarly, as export volume grew, it wasn’t until 2013 that the family committed to constructing a 60,000-square-foot sizing, grading and packing facility stateside, capable of boxing 60 cases of sweet potatoes a minute. In tandem with the construction of an additional 80,000-square-foot, environmentally controlled facility that now yields an even larger number of near field-quality sweet potatoes for up to one year after harvest, Scott Farms’ investments in infrastructure have helped ensure that all its exports are GlobalG.A.P-certified, offering transparent quality in each step of its supply chain.

For the Scotts and other exporters to the British Isles, the best may be yet to come. With the U.K. leaving the European Union’s single market, Prime Minister Theresa May signaled in January that Great Britain will be looking for additional trade opportunities outside the EU.

Beyond Europe, Scott Farms is starting to fix its eyes on other parts of the globe. “We’re looking at that very, very closely,” says Stan Smith, suggesting that Asia could prove an excellent market not only for the company’s established products but also for its newer line of 10 different spirits that use distilled sweet potatoes.

Longtime ally Kelly McIver at the N.C. Sweet Potato Commission believes Scott Farms will please its next wave of customers. Whenever she bumps into the family’s clients overseas, “They will just come and talk to me about the Scott family and how great they are,” she says.

“Never in a million years we would have imagined it would become what it became,” Dewey Scott says.

Trade Lessons Distilled

There are millions of people in the People’s Republic of China who need a good, stiff drink right about now, and Tom Lix, chief executive officer of Cleveland Whiskey, aims to give it to them.
The question is when.

With Black Monday’s rout on the Shanghai Composite Index erasing all of 2015’s gains and wiping out or severely damaging the portfolios of numerous mom-and-pop investors, Lix’s new black cherry wood-finished bourbon could help them drown their sorrows. But the market drama and a related development—the surprise devaluation of the Yuan—has the 64-year-old Cleveland entrepreneur rewriting his China playbook.

“It’s got to have an influence,” says Lix of the devaluation. Originally hoping to introduce product into one or more Far Eastern markets by year’s end, “We might sell more in Europe than in Asia for the time being,” he concedes.

Yet Cleveland Whiskey presses on.

Lix, a genial bear of a man who relishes the role of industry heretic and who produces his growing line of fast-to-market bourbons in a business incubator, has no intention of dropping his interest in Asia and is now seeking advice on how best to thread the pricing needle.

SPEED TO MARKET Cleveland Whiskey speed-ages bourbon by sending a formula for “white dog” whiskey to producers in Kentucky and Indiana, who age the distillate for a couple of weeks and then ship it to Ohio to be pressure-aged.
SPEED TO MARKET Cleveland Whiskey speed-ages bourbon by sending a formula for “white dog” whiskey to producers in Kentucky and Indiana, who age the distillate for a couple of weeks and then ship it to Ohio to be pressure-aged.

The six-year-old company shook up purists when it began speed-aging bourbon by sending a formula for “white dog” whiskey to producers in Kentucky and Indiana, having them age the distillate for a couple of weeks at most and then ship it to Ohio, where it is placed in one of three stainless-steel vats to be pressure-aged along with cut-up staves from the shipping barrels.

“It’s about a 24-hour process,” Lix says over a repetitive churning noise that fills his production area. For newer flavors like black cherry and honey locust, “we use air-dried sustainable hardwoods,” he notes.

The bourbons that Cleveland Whiskey is now producing appeal to the Asian palate, says Frank Coleman, senior vice president at the Distilled Spirits Council of the United States (DISCUS). “The appetite is there for American products,” Coleman says, noting that exports of spirits to the People’s Republic increased by 1,330 percent from 2000 to 2014 and by 1,332 percent to Singapore, a key transshipment center.

Pre-devaluation, Lix helped whet the Chinese whistle by putting samples of his products up for 2015 China Wine and Spirits Awards, with one entry winning a Double Gold Medal and another capturing a Gold.

As for post-devaluation pricing, Lix is being told to target the luxury end of the mainland’s market.

“What they told me was, I was looking at it wrong,” Lix says of advice he recently received from trade experts at Cleveland State University (CSU), just blocks away from his office. “Then (going upmarket), the devaluation probably wouldn’t matter.”

China is a bifurcated market, observes Nate Ward, director of CSU’s International Trade Assistance Center (ITAC).

“The consumers there in the wealthiest class have brand loyalty,” he says. “To go after the ‘highest’ consumers is probably the way to go.” As for the middle class and below, “They’re incredibly price-sensitive” and take a commodity approach to buying decisions, he says.

While surprises in China have rattled the entire supply chain, “It’s a long-term process anyway,” Ward says of entering the mainland.

“Use a period of uncertainty like now to engage in business development. It’s probably a very good time to be laying the groundwork.” Over time, he says, “The purchasing power will definitely go up” as the economy rebounds in the world’s largest consumer market.

Devaluation is just one of several export-related challenges that Lix has had to face in his quest to build a brand overseas.
With Cleveland Whiskey getting a positive reception domestically, Lix began exploring global markets in 2014. By that time, U.S. spirits exports had exceeded the billion-dollar mark for seven consecutive years, according to DISCUS. Lix understood that strong global demand coupled with a weeks-long versus years-long aging process could net strong profits.

To get started, he tapped into the Ohio Export Internship Program, which provides companies with up to $3,600 reimbursement for intern wages.

Lix’s first intern identified viable markets, researched regulations and developed a basic “how-to” guide for the company. The firm also explored shipping by air versus sea but ruled out the former. “Quite frankly, it was simply too expensive. Remember that bottles are pretty heavy,” Lix notes.

Next, Lix recruited a broker with strong contacts in Germany, his first target market.

Peter de la Porte, an immigrant from the Netherlands, serves as consul for his native land in Cleveland and also runs Hexon International, a manufacturer’s representative. De la Porte had heard good things about Whiskymax, a German spirits distributor, and held several meetings with them, preselling Cleveland Whiskey with samples.

By the time Lix joined the DISCUS delegation last fall at Bar Convent Berlin, a trade show, Whiskymax was sold on the new speed-aged import and was a prepaid customer. “Knowing that I was coming over maybe helped me sign that distributor,” Lix says. “A lot of it is mutual trust,” adds de la Porte.

In Berlin, Lix also had time to hobnob with potential buyers from other countries. “A lot of buyers gravitate to Berlin because it is, in fact, a tastemaker for less developed economies,” Coleman of DISCUS explains.

Flying back home, Lix was optimistic. Then, problems surfaced. First came the fine print.

In the U.S., spirits are generally sold in 750-millileter bottles; in Germany, 700-millileter bottles are used. “Not every country has that regulation,” de la Porte says. “That was really one of the surprises.”

ROLLING WITH IT Tom Lix, CEO of Cleveland Whiskey, intended to export to Asia by year’s end; with the devaluation of the Yuan, he intends to sell more into Europe for the time being.
ROLLING WITH IT – Tom Lix, CEO of Cleveland Whiskey, intended to export to Asia by year’s end; with the devaluation of the Yuan, he intends to sell more into Europe for the time being.

“No one produces that sized bottle in the U.S.,” adds Lix, who had to rush-order a shipment of the smaller-sized bottles from French manufacturer Saverglass to fulfill his new distributor’s needs. “The 700-ml bottles cost considerably more.”

Branding also proved an issue, as German regulations forbid calling something a “whiskey” if it hasn’t been aged in a barrel for at least three years. Pouring through the rules, Lix found that Germany deemed his product a bourbon.

Placing a 700-millileter bottle for export labeled “American Bourbon” alongside a 750-millileter domestic bottle labeled “Bourbon Whiskey,” the difference in size seems almost imperceptible. But the labels are as strong as bad moonshine and by going the extra step, Lix avoided running afoul of foreign bureaucrats.

With regulations addressed, Lix and de la Porte began preparing for Cleveland Whiskey’s maiden voyage. The two originally settled on using the Cleveland-Europe Express, a creation of the Cleveland-Cuyahoga County Port Authority.

Introduced in April 2014, the all-water route between Cleveland and Antwerp, Belgium, offers a sailing time of 13 days, weather permitting—five to 10 days faster in total transit time than using an East Coast port, the port authority states. It is the only scheduled liner service for containerized and breakbulk cargo between Europe and a Great Lakes port.

But Cleveland Whiskey’s plans to be an early adopter of the service were scuttled. “The only problem was, it was the middle of the winter” and the locks on the St. Lawrence Seaway were closed, de la Porte explains.

Working with Whiskymax, it was agreed that Lix’s shipment of “American Bourbon” would be trucked to New York. But instead of being loaded onto a ship there, the cargo sat on the dock for a month.

Conflicting accounts of what caused the delay persist. While Lix expected a 20-foot container of his product to be loaded, “It was not a 20-foot dedicated container when it got to New York” but rather breakbulk cargo, de la Porte says. Word came back through the supply chain that a Material Safety Sheet involving alcohol content had been completed incorrectly multiple times, but not everyone believed that version of events.

Fortunately, the snafu in shipping had a silver lining. Because of the delay, Whiskymax was getting “a lot of pressure” from its buyers to deliver Lix’s product. “People suddenly really wanted to buy this Cleveland whiskey,” de la Porte recalls. “The whole shipment was sold out in less than a week” and a second shipment was ordered soon after, he says.

To Ward of CSU’s International Trade Assistance Center, the incident recalls a lesson learned by another exporter during the recent West Coast work stoppage.

“It only takes one instance of experiencing a major slowdown” to make a new exporter more vigilant, Ward says, remembering how an unnamed company finally asked its freight forwarder to quote a shipment out of another port. “That company was so used to listening to the directions of their forwarder,” Ward says.

“We know much more now,” Lix says. “I must admit that we were pretty naïve about the entire process.”

Cleveland Whiskey expects to use the Cleveland-Europe Express for its shipment to Germany this fall and will now have the option to ship twice a month if needed. The Port of Cleveland and Amsterdam-based Spliethoff Group recently added a second monthly vessel to the route, which has seen tonnage more than double, says David Gutheil, the port’s vice president of maritime and logistics.

Having navigated the vagaries of shipping and gotten a repeat order from Germany, Lix was ready to expand his horizons.
In addition to planning his third shipment to Europe, he spent the first half of 2015 pinpointing China, Singapore, Hong Kong and Japan as appropriate markets and began strengthening his export tool kit by developing more robust relationships with a variety of public and private agencies.

Besides DISCUS, his trade organization, one that Lix sought out early was Food Export Association of the Midwest USA, a nonprofit that promotes the export of food and agricultural products.
Lix latched onto the group’s Branded Program, which operates across 12 Midwestern states and reimburses applicants for 50 percent of the costs associated with product demonstrations, fees for exhibiting at foreign trade shows, freight costs for samples and other activities that support exports. The program is open to businesses defined as small companies by the U.S. Small Business Administration and carries a $250 application fee, with an administrative fee of 6 percent of the approved program allocation.

While Lix believes that the Branded Program has merit, he suggests that users study their calendar before participating. “We did it a little too soon. … You have a year’s worth of time to use those monies.”

“Funds cannot be rolled over so it is very important that companies plan their year in advance to the best of their ability,” confirms John Belmont, a spokesman for the Chicago-based organization. “They do have the opportunity to amend their requests and ask for more funds if available later in the year.”

As Lix grew more serious about Asia, he also took advantage of a Food Export Association Buyers Mission, held in Cleveland at mid-summer. Lix had the opportunity to meet potential customers from China and Hong Kong as well as 15 other countries, all of them prequalified by the Chicago team. The group also conducted one-on-one assessments of companies’ export potential.

Nate Ward of ITAC, who also attended the session, calls the program a “no-brainer.”

“Half the work involved (for an exporter) is just verifying who they are is what they say they are,” he says. “How much time, energy and cost would that have been?”

Lix continues to tap into some of ITAC’s services, which include export readiness, export financing, compliance, documentation, logistics, and cultural assistance as well as pairing a fledgling exporter with a more seasoned mentor.

Ward is also happy to refer exporters to third parties for credit risk insurance.

Although Cleveland Whiskey’s first overseas relationship was a prepaid one, future prospects may only be agreeable to paying a percentage upfront.

As congressional wrangling over the future of the U.S. Export-Import Bank (Ex-Im) continued through the summer, a number of private insurers expressed a willingness to fill the void left by the impasse. International Risk Consultants, a longtime partner of Ex-Im Bank, devised an arrangement for its clients with a private-sector insurer capable of writing receivables coverage that “hews as closely as possible to Ex-Im Bank parameters,” a notice from the firm said.

Ward suggests additional options. He says “too many exporters” are not taking advantage of letters of credit and might also consider payment against documents, in which the buyer has to settle with the clearing bank before shipping documents are released and the buyer can take delivery. If the buyer refuses, the exporter has the right to recover the goods and resell.

At Cleveland Whiskey, Lix knows that prepayment issues loom. “When that time comes that will suddenly jump to the forefront,” he says.

With snafus during his first year of exports behind him—and with successful entry into his first foreign market—Tom Lix believes that Cleveland Whiskey is poised to play a larger role on the world spirits stage.

In 2015, three domestic spirits competitions and one in Asia handed him the Gold, turning the adage that “Age in the industry is a correlation of quality” on its head, the CEO says. He’s now consulting with a variety of export experts on a more regular basis. With about $2 million in funding supporting the company, 2014 sales came in at around $1 million, and Lix projects this year’s sales to weigh in at around $1.5 million.

Lix heads back to Bar Convent Berlin this fall to close more deals, and at the Distilled Spirits Council of America, Frank Coleman thinks he’ll do just fine.

“There is increasing interest around the globe in American whiskey,” Coleman says. “There are huge cocktail hours and a booming cocktail culture … Europe, Asia. It’s cocktails.”

Overseeing the export promotion program at DISCUS since 2005, Coleman remains upbeat. An associate, Rob Maron, describes India—a country poised to surpass China in population by 2022—as the largest whiskey market in the world. And although regulatory and distribution challenges can crop up, Coleman believes that Asia, despite recent market free-falls and currency concerns, can be counted on to produce sales. “There’s been strong growth in these countries in spite of the barriers,” Coleman says.

As for the upstart CEO in Cleveland who’s helping to reinvent his industry’s formula for success, Coleman says, “He’s gaining traction in the world markets.”

Trade In The Time Of Ebola

For Peter Radtke, CEO and co-founder of Cary, N.C.-based JustNeem, visiting the company’s field office represents a bit more than a quick change of scenery.

Radtke’s meetings with his on-the-ground team in the Sub-Saharan nation of Mauritania require 15 hours in the air, with four separate legs between Raleigh-Durham International Airport and wheels down in Nouakchott, the capital of the mostly flat, mostly arid former French colony.

Disembarking from an air-conditioned plane into a brick wall of desert heat last fall, Radtke was met at the bottom of the stairs by a white-coated official who placed an infrared thermometer gun at the forehead of each passenger.

“People just paused a bit, the temperature was taken and then they moved on,” recalls the biochemist-turned-entrepreneur. “A nod from him indicated that I was okay and I began to follow the crowd toward the airport building.”

Working his way through the throng, Radtke met his contact and began a 260-mile taxi ride to his final destination, the village of Kaédi.

Like 51 of the 54 countries in Africa, Mauritania is Ebola-free but taking precautions to keep the virus at bay and continue commerce as usual. “Nobody talked about it; there was not noticeable concern with anyone I met,” Radtke says.

KEEPING COOL Peter Radtke, CEO of JustNeem, who wears a headscarf to protect himself from the intense sun exposure in Africa, says to choose your partners carefully when doing business there.
KEEPING COOL Peter Radtke, CEO of JustNeem, who wears a headscarf to protect himself from the intense sun exposure in Africa, says to choose your partners carefully when doing business there.

He has made this trip nine times since he and his wife, Magda, founded JustNeem in 2007 after learning about the anti-fungal, anti-viral and anti-bacterial properties of the oil in the leaves, bark and seeds of the 80,000 neem trees that dot the Mauritanian landscape.

Helping each tree strengthen its immune system in a harsh climate, neem oil also cleanses human skin, treats acne and athlete’s foot and repels pesky insects. JustNeem’s lotion, soap, lip balm, face masks and mosquito repellant are manufactured in Cary using dried leaves flown in from Nouakchott in northwest Africa. These leaves are brewed and combined with other ingredients to create soaps, pastes, creams and liquids that are sold at retail stores like Whole Foods and spas across the U.S. and in South Korea.

“When I first heard about neem and its properties and everything that it does, it sounded like snake oil,” admits Dr. Radtke, a former Bayer researcher who’s now a true believer in the benefits of neem and in what it can do to kick-start microenterprise in West Africa.

During his November trip, Radtke conferred with a Mauritanian native and his American wife, who are test-marketing JustNeem’s products around the country through a network of locals, expats and government officials, with hopes of selling in Senegal and Morocco as well.

Radtke also met with Ken, his main contact on the ground in Africa who oversees the neem orchard that Peter and his wife established seven years ago.

With four other villagers, Ken built a well and water tower and has emerged as the go-to guy for the Radtkes for JustNeem’s local projects. More than 1,000 neem trees now provide the raw ingredients for the company’s products while fruit from the orchard’s mango trees offers nutrition and income for some villagers.

“Five to 10 trees can support a whole family just from the sale of the fruit,” says Radtke, who adds that his wife has also taught some of the women in the village how to make soap. Their handiwork is for sale at a market in Nouakchott.

“In terms of resources, there are no issues,” Dr. Radtke says of working in Mauritania.

The key, he says, is forging the right long-term relationships.
Bribery and corruption remain significant business concerns in Africa, so choosing the appropriate partners and including a larger Western organization in the supply chain is advisable, Radtke says.
“We have half a ton [of neem] sitting in Nouakchott now,” and JustNeem is looking at shifting from air cargo to using Maersk Line’s sea containers, he says.

“They’re so massive that people really cannot bribe them,” Radtke says of multinationals like Maersk. “They just force their values on the system.”



South of Mauritania, The Maersk Group and its independent division, APM Terminals, continue to operate in Ebola’s footprint.
Working to keep cargo moving and crews and civilians safe in the midst of the outbreak, Maersk has forged alliances with shippers and governing bodies.

Liberia’s port authority continues to forbid shore passes and requires three layers of screening for workers boarding vessels. Mandatory temperature checks, constant use of chlorine and other sanitizers and the immediate isolation of anyone displaying Ebola-like symptoms are in force.

“We have thus far not had one single day of downtime due to the effects of the Ebola outbreak,” says Peder Sondergaard, head of the Africa-Middle East Region for APM Terminals, which operates APM Terminals Monrovia.

Since acquiring the Monrovia operation, APM Terminals has invested about $100 million to bring a “completely obsolete” terminal up to international standards as part of a privatization agreement, Sondergaard says, and the company has committed an additional $34 million for upgrades to the yard, gate, buildings and handling equipment, now on hold due to the current emergency.

“[Ebola] just makes it more cumbersome” to engage in trade in the region right now, Sondergaard says. “The cost of logistics goes up.”
APM Terminals and its parent company are battling Ebola through partnerships. The Maersk Group has made a $1 million contribution to the fight.

FIELD OPERATIONS JustNeem sells products made from the oil of neem trees, the leaves of which help the tree strengthen its immune system in harsh climate.
JustNeem sells products made from the oil of neem trees, the leaves of which help the tree strengthen its immune system in harsh climate.

“It’s an offer in the course of our usual business to provide support,” Sondergaard says about Maersk waving fees, providing shipping and transport services and letting partners borrow equipment and manpower, with the company providing services or absorbing costs.

APM Terminals has also erected a medical station for Liberia’s health ministry, and it has reduced the price of handling imports of rice—a staple of the Liberian diet—as abandoned farms and panic buying have spiked food prices. To keep trade moving in the face of docking restrictions imposed by some nearby countries, Maersk Line has created a weekly loop of vessels from Tangier that call on the three Ebola-affected countries exclusively.

If Ebola is contained in early 2015, GDP loss for West Africa will stand at $2.2 billion for 2014 and $1.6 billion in the coming year, the World Bank estimates.


While Ebola has slowed trade in parts of West Africa, the continent at large remains attractive to businesses such as Static Control Components, a North Carolina firm that bills itself as the world’s largest manufacturer of components for the toner cartridge aftermarket.

Although Static Control has seen a drop in shipments into Liberia by its trader in Nigeria, the company remains bullish on Africa and, like JustNeem, has developed a niche business model that helps foster scalable microenterprise for locals.

At its headquarters in Sanford, 40 minutes down the road from JustNeem, Static Control employs about 1,000 workers who produce, market and ship components to 168 countries, including more than 30 in Africa.

The company entered the cartridge niche in the mid-1980s, after laser printing gained widespread consumer acceptance. In Africa, that development opened the door for curbside and in-office remanufacturers (“remans”) who could feed the continent’s increasing appetite for cost-effective cartridges. Remans, which cost 30 to 60 percent less than originals on a cost-per-copy basis, can be reused up to three times before they must be recycled.

Static Control’s buyers range from a “one-man band, say, sitting on a street corner” who refills one or two cartridges a day with the company’s parts to more sophisticated shops that cobble together thousands of units daily, “very much the way you would do in the United States,” says Stuart Lacey, the firm’s sales director for the Middle East and Africa, based in Johannesburg. Remans sell to “everybody and anybody” including friends, home offices and village schools, he explains, with larger remanufacturers providing cartridges to government offices, mining companies and other corporate concerns.

Even the one-man bands can prime the pump of microenterprise, Lacey says. A street-corner peddler can turn over anywhere from 100 to 2,000 cartridges a month with the help of a neighborhood crew. “For every job that is created, it supports 10 people financially,” says Lacey, citing World Bank data. “It’s a very labor-intensive business.”

The company provides remanufacturers with written instructions, videos and personal advice to help them succeed. But to build a market across three dozen countries, travel is essential.

“You have to have face-to-face,” insists Lacey, a British expat who built safari camps and managed a trucking operation in Uganda before joining Static Control. “It’s a lot of footwork … a day’s drive through some pretty rough places.”

Newly produced components are shipped from Sanford to Durban, South Africa, via the ports of Charleston, Norfolk and Wilmington, N.C. The company apportions container shipments among the three ports as long as transit time is comparable and rates are competitive, says Erwin Pijpers, senior vice president for Worldwide Sales and Business Development. “We keep replenishing inventory all the time,” he says.

From Durban, the company relies on inland networks, which are taking off around Africa and reducing time to market. Lacey points to several Chinese-financed railway projects in East Africa as prime vehicles for reducing supply-chain headaches.

In Africa and elsewhere, the remanufacturing of cartridges is proving beneficial environmentally. Static Control estimates there are 38,000 remans around the globe who save nearly 15,000 tons of waste from landfills each month.

“It’s not organized waste disposal here, it’s thrown on the street,” Lacey laments from his perch in Africa. Supplying quality components to smaller remans reduces the plastic, metal and rubber cast aside in villages.

Lacey says larger corporations whose cartridges are wearing down “have shown us warehouses where they have the empties stacked because they don’t know what to do with them,” so he and his colleagues work with them to find a remanufacturer who can extend their use.

At present, Static Control Components’ share of worldwide sales in Africa is “relatively small,” says Lacey, but “tremendous growth opportunities” are taking root and will make the continent a “significant contributor” to future revenues, he believes.



For traders, Africa has always represented a precarious balance of risk and reward. While conditions vary from country to country, there are increasing signs that the balance is tipping toward the latter, even in the time of Ebola.

TURNING THE TIDE Shipping giant Maersk Line and its independent division APM Terminals are taking many precautions against spreading Ebola. But JustNeem’s Peter Radtke says he intends to use the carrier because it’s “so massive that people really can’t bribe them.”
Shipping giant Maersk Line and its independent division APM Terminals are taking many precautions against spreading Ebola. But JustNeem’s Peter Radtke says he intends to use the carrier because it’s “so massive that people really can’t bribe them.”

Traditional concerns like administrative hassles and travel time remain but are slowly being offset by bureaucratic reforms and improved infrastructure. Non-tariff measures potentially onerous to trade are being scrutinized and new rail is being laid. Technology is changing, too, with mobile money now de rigueur in Kenya, for instance.

While one-man rule is not out, it is down. And though cronyism persists, leaders like Ellen Johnson Sirleaf of Liberia and Paul Kagame of Rwanda are viewed by reformers as welcome scolds. “He’s (Kagame) taken the country by the scruff of the neck. … You can open a company in two hours online,” reports Static Control’s Lacey.

“South Africa is almost a different continent,” he adds. The country’s black middle class more than doubled from 2004 to 2012, according to the Unilever Institute, and its broadband networks are continually strengthening. In Nigeria, the middle class has mushroomed 600 percent over the past 14 years, according to Standard Bank.

“The growth of the middle class is driving and will be driving consumption,” says APM Terminals’ Sondergaard. And that, he says, means more demand for consumer items as well as project-based supplies like machinery and building materials.

APM Terminals is seeing steady growth in the containerized trade that it assists in Africa—about 10 percent a year on average.

Africa is now home to six of the 10 fastest-growing economies in the world, says the U.S. Commerce Department. Across the continent, real income has increased more than 30 percent, reversing two decades of decline, and GDP is projected to rise 6 percent a year over the next decade. U.S. merchandise exports to the continent are up, increasing 58 percent from 2009 to 2013.

While total American exports of goods and services to Africa reached $50.2 billion in 2013, business there represents just 1.5 percent of the country’s total global exports and there’s plenty of room for U.S. companies to get advice, do their homework, partner up and take on the continent.

With a compound annual growth rate of 114 percent over the past seven years, JustNeem continues to work with the North Carolina Department of Commerce, the Raleigh office of the U.S. Commercial Service and a local Small Business and Technology Development Center.

In the company’s early years, the trio arranged for a grant to attend a trade show, set up conference calls with prospects, provided export documents and suggested how much to request up-front when first selling overseas. “They appeared as one company to us,” Magda Radtke says of the three agencies. With more countries wanting to do business with JustNeem and with its partners in West Africa shaking the right trees, the future looks promising both in Cary and Kaédi.

“People who live in extreme poverty are giving something of value to the world instead of being on the receiving end,” says Dr. Radtke about helping Africans build microenterprises rather than relying on top-down foreign aid. “That idea is fascinating to me.”

For the Radtkes and others doing business in Africa, a balance of corporate stewardship and profitability and a more prosperous, post-Ebola continent go hand in hand.