Hydronalix manufactures robotic water rescue systems and small unmanned watercraft. First responders, the U.S. and other nations' militaries and government agencies use Hydronalix products to aid in water rescue and other applications such as bridge inspection, scientific research and law enforcement on oceans, lakes, and rivers. Depending on the application, the unmanned system can have personal floatation devices, sensors, cameras and imaging sonar. Hydronalix capabilities include advanced research and development, design and prototyping, test and evaluation, production, customer training and service. The company is based in Sahuarita, Arizona.
Since 2016, Arizona MEP has worked closely with Hydronalix to implement its strategic initiative to grow international markets. As a result, since 2021 the company has grown from 30 to 50 people, adding manufacturing capacity in Tucson, Arizona, and soon will open a service facility on the island of Crete.
Arizona MEP’s ExporTech and AZSTEP Help Hydronalix Build Export Markets
The first step Hydronalix took was to develop an export strategy and plan with the help of ExporTech™, a two-month export boot camp program led by Arizona MEP. Mulligan and his team worked with the AZ MEP client advisor through individual coaching sessions and group workshops to develop an export plan. Since then, Hydronalix has consistently executed its export plan with help from the Arizona State Trade Expansion Program (AZSTEP) program, which assists with some of the funds needed to participate in international trade shows as part of a delegation representing Arizona companies. “The first few years we attended [international tradeshows] the goal was to build awareness in foreign markets," said Mulligan. For example, Hydronalix sent news releases to its prospects about its upcoming participation in a show. "Even if we did not see the prospect at the show, at least they would know we were there and promoting the trade mission," said Mulligan. As the company gained experience, they learned how to build relationships in different business cultures, often finding success when they could engage with potential customers through social activities. "When you tell them that your spouse or family member has traveled with you to see the country, it's easier to engage socially with them, and they are excited to show you their country and culture," said Mulligan. "This approach made a big difference when we visited the United Arab Emirates, Bahrain and Israel.”
Expanding Markets for Existing Products
One of the ways Hydronalix found success was by developing versions of Hydronalix products that could be exported without ITAR restrictions. Items not designated under the control of another federal agency or listed on the Commodity Control List are classified as EAR 99 (Export Administration Regulations). EAR 99 items generally are low-technology consumer goods and do not require a license. This strategic decision allowed Hydronalix to grow its business with the U.S. military, primarily for products used in humanitarian missions. "For example, if the U.S. Marines are responding to a natural disaster in South Korea, the EAR 99 assets we develop can be used by South Korea's military without any restrictions," said Mulligan.
Discovering New Applications, Adapting to Meet Customer Needs
Over the years Hydronalix has uncovered many new applications suitable for its robotic systems by focusing on its export business. From sampling water in France for Red Tide to an unmanned police boat to clear the waterways for parades in Thailand, Hydronalix has developed products built for a specific application but then discovered new uses for the same product by tweaking the sensing technology or other options to meet customer's needs. "Of course, you need to visit people in other countries and different environments," said Mulligan. "Most people think developing export markets just means getting more of the same buyer, but it can also mean discovering different kinds of buyers in places that you would not have considered if you had not traveled to the country."
Hydronalix Expands Operations in Tucson and Overseas
The trade missions organized through AZSTEP served to find end users and to develop a network of local distributors. "Distributors help with logistics and sometimes they have warehouses we can use, they speak the language, they might store parts for us," said Mulligan. This relationship increases the value to the U.S. military overseas. Hydronalix takes part in U.S. Marine Corps training exercises across Europe and will soon open an office at the NATO training facility on the island of Crete. "We send people from Sahuarita there," Mulligan said. "We have 10 people in Sweden right now. We also have boats in 53 countries and about 900 locations that we work with." In 2021 Hydronalix opened a manufacturing facility in Tucson to support its growing business, while research and development is still conducted in Sahuarita.
“It takes a lot of continuous effort to grow a global customer base,” Mulligan stated. “In our case, ExporTech and Arizona MEP provided the initial push to get us started. Arizona MEP has been a critical partner in our journey providing advice and access to resources important to Arizona manufacturers.”