From the sugar cane fields to The Helm of Guyana’s Leading Hotel…
For every young aspiring entrepreneur I would ask that you never underestimate your talent or capability. Believe that anything is possible, set realistic goals and work hard towards their achievement. It is rare that success would come right away, therefore be persistent and patient. At times, you may not have all the answers to immediate problems, seek advice and reach out to a mentor. Remember that success breeds success, but such would be short lived if you spend your gains unwisely.”
The achievements of Robert Badal, in 20 years of prudent business activities, have placed him among the leading entrepreneurs in Guyana. In a country known for its rich agriculture lands and mineral wealth, he has built a business empire comprising of agro-processing and Guyana’s leading International Hotel.
Robert Badal’s story is one of true entrepreneurship, described best by the words perseverance, determination and commitment. From spending his early years as a water boy in the sugar cane fields, to now being a successful business tycoon, Badal has used the last two decades to develop a portfolio of profitable businesses by his very grit and willingness to explore new territories.
The business mogul has always been focused, disciplined and motivated, even as a little lad, so it is no surprise that Badal now stands at the helm of two of the most lucrative businesses in Guyana.
He has defied the odds and today, his flagship company, Guyana Stockfeeds Inc., is the leading producer of animal feeds with 70% of the local market. Its high quality, high-value parboiled rice, marketed under the “Angel” Brand, dominates supermarkets in Trinidad, Barbados and Jamaica.
In 2009, Badal acquired the prestigious Pegasus Hotel, located on the tip of Georgetown’s Atlantic Coast, and made his mark on the local hospitality landscape.
Badal spent his early childhood in a tiny village on the East Bank of Berbice. The eldest of three children, he lived with his father Robert Badal Sr., a farmer, while his brother and sister lived with his aunt nearby. The business mogul’s mother died before he started pre-school, and being the eldest, he had the responsibility of helping his dad on the farm on weekends and holidays.
“I really did not have much playtime. During the week I attended school, and weekends I assisted on the farm. At first, I thought it was unfair because my cousins had the entire weekend for themselves while I had to be on a farm but I quickly got into it. Initially I believed that it was the company my dad needed, but as I grew older I started to help paddle our boat on the five mile trip to our farm and then assisted with the weeding, cutting bushes, and harvesting plantains, pumpkins, cucumbers, and papayas, and so. It was hard work to leave early in the morning and returning after dark,” Badal related.
Continuing, he told Guyana Inc. “What I particularly liked was traveling with my dad to New Amsterdam, the nearest town 25 miles away, to sell our produce. After a few trips, I was convinced that I was a better salesman than my dad.”
After graduating from primary school, Badal got a break away from the farm to attend secondary school in New Amsterdam. He boarded with an aunt and rode five miles every morning on weekdays to attend the Berbice High School. “My bicycle was my tool of trade as I couldn’t afford the fare by bus or car,” Badal shared.
Badal enjoyed his high school days, but tragedy soon struck; halfway through high school, his dad passed on. Despite the setback, he managed to complete high school, graduating top of his class.
This opened doors to many opportunities for Badal but finding a job to assist his aunt to support her five children and sister became his immediate priority. Though he had an offer to teach at a nearby primary school, Badal chose to work in the sugar cane fields as a water boy. He had already considered that he could earn a higher pay when overtime was taken into account.
“I was only 17 years old but I would be on GuySuCo’s truck at 5AM each day with the cane cutters. I would not return until around 7PM: my skin and clothing all blackened from the burnt sugar cane dust. I would be the first to arrive at the worksite and the last to leave the cane fields, Sunday to Sunday. Even though I wanted to further my studies at the University level, I needed the money,” Badal confided.
“It was unusual at the time to find anyone with seven subjects GCE O’ Levels in the cane fields. Everyone aspired to have a well-dressed, fancy job in an office or to be a teacher but my responsibility was my drive and motivation,” the businessman added.
Fortune favoured Badal. After a few years in the sugar cane fields, someone “spotted him” and offered him a GuySuCo (Guyana Sugar Corporation) cadetship to study for a Diploma in Agriculture at the Guyana School of Agriculture (GSA). Two years later, he graduated with distinction.
Badal continued in GuySuCo as a field supervisor. In fact, he was the youngest at the time. Badal quickly realized, however, that he needed a career much more exciting and he started preliminary accounting studies in the evenings after work. It was two years after Badal registered with the Association of Chartered Certified Accountants (ACCA), the prestigious London based professional accounting body, that he completed the entire program, a record even up to today.
“The rest was history. There was some degree of restlessness in me throughout my working career. I was quick to get settled in a new job because I am a quick learner, highly motivated and disciplined. I would work on multiple assignments at the same time and get a lot done in a given day. I was never the one to walk around, chatting or being distracted in anyway and there was no social media at the time. All social activities were after work,” the hotelier reflected.
It was no surprise that having the qualifications of a certified accountant provided many opportunities. After a few senior executive posts, locally and overseas, the restlessness returned. Badal needed a greater challenge. “This time I was ready and eager to be my own boss. The active field of entrepreneurship provided the answer to my lingering restlessness,” the businessman said.
It was 1994 that he found his first business calling. At the time, Badal had started studies for a Master of Business Administration (MBA) at the University of the West Indies, Mona Campus in Jamaica. It was there that the idea of trading rice between Guyana, an efficient producer, and Jamaica, a large consumer of white rice, emerged.
A number of conditions in both markets facilitated his easy entry. Guyanese rice millers had a poor reputation in the Jamaican market, in terms of quality and reliability. Even though Guyana was a CARICOM member state with tariff protection of 25%, most of the rice entering Jamaica annually came from American producers. Additionally, the large Guyanese producers preferred the lucrative European markets that sported duty-free access via the OCT (Other Countries and Territories) route for semi-milled cargo rice. But, this route was then coming to an end with the global review of preferential access.
“My strategy was to take the first-mover advantage in developing a brand of rice in advance and marketing this to distributors in containerized shipments instead of shiploads. I identified a number of rice millers willing to work with me, negotiated forward contracts in return for providing financing. Consistent quality was demanded,” the businessman shared.
He said progress was slow at first but word of great quality, lower prices and reliability of smaller shipments soon spread and his market share gradually accelerated. Within four years, Badal’s “SUPA” brand had wedged its way to securing 30% of the Jamaican market.
During the out-of-crop season when, at times, supply from Guyana was low, he would co-share a vessel with a grain company and ship his supply from the USA.
His business model was a resounding success but was it sustainable? Even at the height of strong market position, Badal was aware that the almost perfect market conditions he created and enjoyed would attract other players, even some of his own suppliers. The OCT route to Europe ended and it was only a matter of time that the floodgates of suppliers and supply would open, depressing both prices and margins.
Strategic Diversification and Expansion
The Guyanese Government, under its privatization agreement with the International Monetary Fund (IMF), had placed a number of state entities up for sale. These included the country’s leading livestock feed manufacturer, Guyana Stockfeeds Inc., and the adjacent edible oil producer, National Edible Oil Company.
“My thinking was that these two companies provided an attractive vehicle in building an integrated industrial complex whereby my rice business would provide needed cash flows and raw materials for livestock feed production. The by-product of the edible oils operations would also provide essential raw materials, further expanding total synergies,” the renowned entrepreneur shared.
It was not long after that Badal emerged the successful bidder for both companies, having offered the highest prices and the best business plans. And so, the curtains were drawn for large industrial expansion in the livestock feed business.
Building Core Competence
Most companies under government control are weak. Guyana Stockfeeds, on acquisition, was weak strategically with a low production capacity, poor product quality and high unit cost. Faced with the scenario of increasing imports with the opening of the economy, the company needed to strengthen its core competence, capacity, reliability, competitive price, integration with sources of raw materials, and strong brand support among customers, inter alia.
Financing was obtained locally as well as from the USA Exim Bank insured facilities. Storage capacity for corn, rice byproducts, and soya meal were doubled. The feed production processes were automated; pelleting technologies were installed to enhanced quality and give farmers better feed conversion into meats; staffers were trained in the new technologies; energy management and production were enhanced; and strong linkages were forged with farmers around the country with an attractive incentive scheme. A hatchery – the missing link to supply day old chicks – was built. All profits were reinvested and dividends minimized during this period of expansion.
As a result, feed production went from 15,000mt in 1998 to 55,000mt where it presently stands, as local poultry production expanded.
Transition to Parboiled Rice Production
As predicted, the margins on trading white rice were gradually declining. With the acquisition of Guyana Stockfeeds Inc., a strategic decision was taken to introduce a higher value, higher priced rice with higher margins; one that is least affected by market conditions.
Unlike white rice, parboiled rice is pre-cooked to retain its B vitamins. It attracts higher prices but require large investments in specialized parboiling technologies.
In 2007, the company opened its state-of-the-art, computer controlled parboiled rice mill. Its “Uncle Bens” quality marketed under its brand “Angel” distinguished it from other brands produced locally. Within a short time, Angel Parboiled Rice made itself a favorite in supermarkets in Trinidad, Barbados, Grenada and Jamaica. Today, this brand is marketed in retail sizes and holds a dominant share in those markets.
Business Diversification – Acquisition of Pegasus Hotel
The opening of the parboiled rice plant immediately preceded the global financial turmoil of 2008. Although it had no impact on its exports and even helped its entry into overseas markets (because of its strategic advantages in relation to suppliers from US), Badal recognized the need for further diversification of his group’s overall business risk. Soon, he was on the lookout for attractive opportunities.
He didn’t have to look too far. Conveniently, that opportunity presented itself in Guyana’s most prestigious hotel, the then Le Meridian Pegasus, which sits on the tip of Georgetown’s Atlantic Coast.
A part of the then Le Meridian Group, the hotel was internationally renowned and it boasted of high repeat customers, among them diplomats, heads of state, business executives and the English Royalty.
“It never crossed my mind that one day I would be having an interest in this prestigious national treasure. Then, one evening while have a drink at its famous Poolside Bar, an executive from Pegasus’s London Office approached and said that the hotel is on the market,” the businessman recalled.
“I took a few extra drinks at the idea of this prospect, but by morning my regained soberness had me asking ‘Why? Can I afford it? Where would the money come from?’”
Within a month of reviewing the financials and other information he received, Badal made an offer. “I questioned my offer because I thought it was on the low side but it was configured on the basis of the amount of financing I believed I could raise on an optimistic basis.” Much to his surprise, the seller’s agent’s – Merrill Lynch, the reputable wall street firm – response was that his proposal was among their two most favored proposals and that the final decision would be based on each bidder‘s ability to immediately pay the deposit and raise the financing subject to contract.
Badal wasted no time in requesting the draft contract and quickly reviewed it with legal advice. He requested a number of changes and within a month signed a legally binding agreement to buy the hotel. The deposit was paid the same day. “I could not believe it, even shortly after I signed,” the hotelier admitted.
“Confident of my credit worthiness and my previous successes in business deals, little did I anticipate the problems in concluding financial closure and the political obstacles and abuse of power I was about to confront,” Badal shared.
He related that it took him eight months to conclude this deal. During this time, Badal faced interferences from political quarters which he believed were intended to frustrate his legally binding contract.
This is what he said: “It was almost a drama that would make a best-selling movie, but on April 9, 2009, I walked into the lobby of Pegasus Hotel with my attorney, took the seal of the company, the minute book, the share certificate and share register from its General Manager. I was now the first local owner of the Pegasus Hotel. I had defeated the odds,” Badal recalled.
The next day, the local media went wild with the news.
The hotel was built in 1969 and it was always profitable but little was spent on refurbishment over the years. With no experience in hotel management or interior designs, Badal’s priority was to upgrade its facilities and enhance guest experience.
“I learned quickly with a few consultants but added my own touch to what is today a great hotel to stay at with continued repeat customers,” Badal said.
All of its 130 rooms are now completely redone with a clean cut contemporary decor, a sprawling, defined Pool Bar and Grill, a lobby wine bar, two restaurants and an executive Bar and Lounge on the roof with stunning views of the city and Atlantic Ocean that caters to the entertainment needs of local and overseas customers.
Secrets to His Success
In every industry, there are some factors that are fundamental to the success of any business within it. It is important to identify these from the onset for initial and continued growth, Badal said, as he added that every industry changes over time as it matures and the competition increases.
He told Guyana Inc. that more qualitative factors define continued success since one’s competitive advantages are eroded by other players.
“Successful businessmen identify these factors driving changes within an industry and ensure that their human resources and company as a whole are equipped to take advantage of the opportunities emerging from these changes. Hard work, careful and strategic planning, innovation and creativity, empowerment of staff are all hallmarks of a strong, stable and competitive business,” the tycoon divulged.
He added “Personally, I have competent leadership in all my businesses. My job is to steer the ship, motivate the crew and allow them to do their job and express their own creativity and innovation needed to deliver consistently good results. This is what I refer to as management by exception. I receive one-page reports every morning from each business via email. This guides any intervention I may decide to make.”
This leading entrepreneur is of the view that success in business comes not by looking at the bottom line, as important as this is, but by focusing on and expanding the top line. “There could be no healthy bottom line if the top line is unhealthy or unstable,” Badal told Guyana Inc.
“Looking back at where I started and where I am today, there was never any doubt in my mind that I would get somewhere significant but I believe that, to some extent, I have surprised myself,” he said.
After spending more than 20 years building his empire, Badal shares “For every young aspiring entrepreneur I would ask that you never underestimate your talent or capability, believe that anything is possible, and set realistic goals and work hard towards their achievement. It is rare that success would come right away, therefore be persistent and patient. At times, you may not have all the answers to immediate problems, seek advice and reach out to a mentor. Remember that success breeds success but such would be short lived if you spend your gains unwisely.”