Spokane Journal of Business

After a scare, RAHCO ships order to Pakistan

Spokane company thought geopolitics might halt sale of $2 million in equipment

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When Pakistani officials flexed their military muscles in late May by detonating several nuclear devices in underground tests, the shock waves resonated all the way to Spokane, where RAHCO International was preparing to ship $2 million worth of canal-digging equipment to that developing Asian country.

RAHCO, a longtime Spokane maker of heavy equipment for the mining and construction industries, had spent nine months manufacturing the specialized equipment, which is to be used by a Turkish company on a big irrigation project in Pakistan called the Chashma Right Bank Canal. But following the nuclear tests and the resulting economic sanctions by the U.S. government, shipping companies began refusing to take on products headed for Pakistan, potentially leaving RAHCO with no way to deliver its product.

Initially, we couldnt find any shipping companies that would take it, says RAHCO President Richard Hanson of the equipment. Shipping companies all stopped taking packages to Pakistan because its a big risk to them. If they have it on the boat and the politics change, they may not be able to unload it on the other end and theyre stuck.

That changed, though, last week, when a ship captain in Houston agreed to take on the shipment. RAHCO quickly loaded the equipment on a half-dozen tractor-trailers and sent it to Houston, with the hope of having it loaded on a ship sometime this week, Hanson says.

Once the equipment gets on board a ship, its captain will issue a bill of lading, which will trigger the release of payment to RAHCO for the order, he says.

Hanson says hes still unsure exactly how or if U.S. sanctions would have applied to RAHCOs canal equipment. The gear was being sold to a Turkish company, not to Pakistan itself, and would be used to build irrigation canals that would ultimately help farmers there produce crops for fooda purpose sometimes exempt from sanctions. I think they (shipping companies) are a lot better in tune with the politics of shipping than we are, he says.

The equipment was to be shipped to the Port of Karachi, on Pakistans southern coast of the Arabian Sea, where it will be hauled inland to the canal construction site, Hanson says. The Turkish buyer, a construction company called Tekser, is building the canal for the Pakistan Water and Power Development Authority, Hanson says.

Although that canal is to be used for agricultural irrigation, other canals being constructed there are for hydropower projects, Hanson assumes that if RAHCOs gear were headed to Pakistan for that purpose, the shipping company might not have agreed to take it.

The prospect of having multimillion-dollar orders at risk due to the uncertainties of international politics is troubling but not new to RAHCO, which has been one of Spokanes longest-running exporters. In direct and indirect ways, weve run into problems like that many times, says Hanson.

RAHCOs canal equipment is used essentially to finish the excavated form of a canal, by smoothing its walls and floor, applying a concrete liner, and then sealing that liner. The Spokane company has sold such equipment all over the world.

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