Wednesday, July 25, 2007

Into Africa: Tech firm CEO touts export opportunities

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Barbara Keating’s introduction to Africa came through the Peace Corps in the mid-1980s. As a volunteer in Sierra Leone, she worked on a World Bank project to develop palm oil, coffee and cocoa plantations.

Keating was so impressed with Africans’ work ethic that she returned years later to do business there.

‘‘The Peace Corps gave me a grass-roots look at Africa,” Keating said last week from Ghana during a conference that was transmitted via satellite to a Montgomery County Chamber of Commerce board meeting in Rockville. ‘‘People said they didn’t really want aid but wanted trade to improve their lives.”

Keating started Computer Frontiers, a technology services company, in Germantown in 1993 and opened its first African office in Uganda in 2000. Subsidiaries in other nations, including Ghana and South Africa, have formed since then. The company operates call centers and provides computer products and services such as network design and Web applications.

Keating, a Montgomery Chamber board member, and other corporate leaders urged others to consider Africa as a growing market. Business margins for Computer Frontiers in Africa run as high as 30 percent, she said.

‘‘We can’t get those margins in the United States,” said Keating, also a board member of Washington, D.C., trade group Corporate Council for Africa. ‘‘That is a real incentive to do business in Africa.” Exports from Maryland companies to most countries in Africa increased last year from 2005, according to U.S. Department of Commerce figures. Algeria was Maryland’s favorite African trading partner in 2006, with $140.5 million in exports, mostly computers and electronic parts. However, that was down from $236.6 million in 2005.

But five of the next seven African trade partners saw exports from Maryland rise last year. South Africa was the second leading partner with $37.6 million worth. Chemicals and computers constituted the bulk of exports from Maryland businesses.

Germantown satellite company Hughes Network Systems, which provided the link to the chamber’s Africa conference on July 16 at the Lakewood Country Club, has operated in that continent quite a bit longer than Computer Frontiers has.

‘‘We have been doing business in Africa for approximately 30 years,” Hughes spokeswoman Judy Blake said.

Hughes does not report African revenue separately, but Blake said the company remains pleased with how trade has gone there..

The state of Maryland and other entities regularly organize trade missions to Africa. Keating went on a state-sponsored mission in 2004 to Ghana and South Africa and found a partner company.

‘‘Those trade missions do work,” she said.

But exports from Maryland companies to Ghana actually declined last year by 19 percent to $5.4 million, while they rose to South Africa by 29 percent. South Africa has one of the highest living standards in Africa, with a gross domestic product per capita of $13,300 and 5 million Internet users out of 44 million residents, according to the CIA’s World Factbook.

Businesses in Maryland are well-positioned to work in Africa, with access to the Port of Baltimore and top African trade experts in Washington, said Keating, who won an International Business Leadership Award from the World Trade Center Institute of Baltimore this year.

Computer Frontiers, which moved to Frederick last year, has annual sales of $6 million and some 100 full-time employees, according to a news release. Keating has a master’s from the Thunderbird School of Global Management in Glendale, Ariz..

Not just largecompanies export

Computer Frontiers is a relatively small company, showing that not just large businesses work overseas, said Georgette W. Godwin, Montgomery Chamber president and CEO.

‘‘It’s also an important message that people there want to help themselves,” Godwin said.

Edward Hall Asher, board president of the Montgomery Chamber of Commerce and president of The Chevy Chase Land Co., said he studied at the University of Nigeria.

‘‘West Africa has very hard-working, educated people who are willing to learn and want to get ahead like anyone else,” Asher said. ‘‘Ghana is a very stable country.”

Ghana has made strides in the telecommunications and high-tech sectors, Ghana government officials said during the Montgomery chamber meeting. The nation has started building its own fiber optic platform and had about 400,000 Internet users out of 23 million residents in 2005, according to the CIA’s World Factbook.

Officials are working on opening centers in Ghana similar to business incubators where companies can lease space at lower costs.

This report originally appeared in The Business Gazette.