He may soon get his wish. Earlier this
year, the Afghanistan Investment and
Reconstruction Task Force, an office in
the U.S. Department of Commerce,
announced that Ace Hardware had
reached an agreement with an Afghan
corporation to open a franchise in that
country. The deal calls for the nation’s
first Ace Hardware store to open in
Mazar-e Sharif, in the northern part of
the country, in early 2014. Eventually,
the companies expect to open 15 outlets across Afghanistan.
ALL IN THE FAMILY
Ace’s partner in the endeavor is Safi &
Safi Enterprises, the latest spin-off from
the Safi Group, a conglomerate owned
and operated by the Safi family. Long
prominent in Afghanistan, the family has investments in
oil, steel, real estate, and hotels, according to The Wall Street
Journal. The enterprise also owns an airline, Safi Airways,
and is involved in construction businesses, the largest prop-
erty development project in Afghanistan, and logistics-
related ventures. Today, the Safi name is among the most
widely recognized in the country’s private sector. According
to officials at the U.S. Embassy in Kabul, “The Safis are one
of the top families, for sure.”
Partnering with local talent is nothing new for Ace
Hardware. “We go in with local entrepreneurs who already
know the landscape and are used to operating in the coun-
try,” Bob Moschorak, president of Ace Hardware
International, told CNBC. “You have to align yourself
always with the right partners; otherwise you are always
doomed [to] failure.”
The Safis, too, are bullish on the new venture. “What bet-
ter business than one that provides the tools to help rebuild
a society in need of infrastructure?” said Najib Safi, the
managing owner of Safi & Safi Enterprises, in an interview
with NBC News.
SPOTLIGHT ON LOGISTICS
Press reports suggest that the Safis expect to invest $40 mil-
lion to $50 million in the Ace Hardware expansion. A sig-
nificant portion of that will go toward logistics—which will
come as no surprise to anyone in the industry. While the
business opportunity seems vibrant, the backbone of retail
sales lies in logistics. If you can’t put it on the shelf reliably,
you can’t sell it.
But getting it to the shelf won’t be easy. Ace’s closest distribution center is in Dubai, more than 1,000 miles from
Mazar-e Sharif as the crow flies. And there’s no easy way to
move freight between the two locations. In theory, you
could ship from Dubai via Iran, but for a variety of obvious
reasons, that option is not available.
That leaves Pakistan as the best alternative. While it’s a
relatively easy 750-mile sea journey from Dubai to the Port
of Karachi in Pakistan, from there, things get dicey. Points
of entry into Afghanistan from Pakistan by ground are limited to a handful of mountain passes. The most direct route
for intermodal cargo shipped via the Port of Karachi to
northern Afghanistan is through the Khyber Pass. However,
shippers who use this route have to accept both delay and
risk, with attacks, hijackings, and pilferage commonplace.
As for the timing, Ace sees a best-case transit time from
Karachi to Kabul of about two weeks but is expecting four
weeks to be more typical.
Yet it can be done. “Somehow, the successful Afghan busi-nesspeople are able to move things around the country,”
One thing that will work to the Safis’ advantage here is
the broad sourcing leeway Ace gives its franchisees. The
company permits them to incorporate locally made products into their inventory, so long as they meet corporate
quality standards—a freedom the Safis could leverage to
