The Karibe Rice Story – Berbice transformation because of one aggressive company. Family introduces Parboiled Rice, Call Centres to Guyana
The predictions earlier this year were grim. Unless the world raises its food production levels 60 percent by the year 2050, there will be shortages and hunger.
According to United Nations Food and Agriculture Organisation (FAO), the population rise is expected to hit the 9 billion mark at that time.
Guyana, no stranger to food production, has been attempting to play a role. With large swaths of land already converted for farming, the country remains a significant player in the rice and sugar markets overseas. Hundreds of farms line the coastlands with many families in the hinterlands also dependent on farming for food and for a living.
But a major constraint has been holding Guyana back: The lack of cheap, reliable power has stymied the march into more processed foods, a big demand on supermarket shelves.
With a major challenge faced also in the marketing department, local farmers have largely remained reluctant to take the plunge.
But one family is leading the way in charting the country’s food production forward.
It has literally placed Guyana on the food map, in the region. Not only has it introduced parboiled rice in Guyana, the company has created a brand that has taken the local, regional and international markets by storm, with its colorful bags and aggressive marketing. With its spare parts and fertilizer programme, Nand Persaud and Company Limited has also taken doing business into another sphere. The Berbice-based family enterprise has diversified, entering the call center market, the packaging business, and even introducing a special credit facility to farmers for tractors and other harvesting equipment.
The entity is now thinking of introducing aircraft spraying for rice-fields in Berbice, a measure to make it easier for farmers and which has the potential to revolutionalize the industry. Its state-of-the-art facilities at Number 36 Village, Corentyne, now has other operators visiting to learn how one company has done it.
Nand Persaud, recognized for their exports achievements by the local business community, has literally created a community out of swamplands, taking rice production to a whole different level.
So what is the story behind this company and its phenomenal success? It has been one filled with frustration, hard work and knocking on doors.
Mohindra Persaud, or ‘Mohin’ as he insists everyone call him, is the 49-year-old General Manager of Nand Persaud’s facilities.
FAMILY-OWNED
Until eight years ago when he passed away, the older Nand Persaud, had been leading his two sons, Mohin and Rajendra, in building the company.
While the patriarch was cautious, the two brothers were hungry to expand.
“It was the three of us. This place was an ocean… we had a big pond here which was used for recreational activities, including speed boat.”
Mohin recalled his dad as an aggressive, hardworking person who believed that it was alright for one person to do more than one job. And the family knew about hard work.
From an early age, the family was involved in not only rice farming, but cash crop, cattle and poultry.
“My dad was not born into money…he worked his way up… we were not famously rich but we were comfortable.”
Mohin himself is no stranger to working the combine in the rice field. Though the family was into rice farming, they never acquired lots of land as many other successful families did. Rather, the Persauds worked lands belonging to others.
“When my dad died eight years ago, we owned only 13 acres of land.”
In the 80’s, Nand Persaud was into agriculture spare parts also, a business that forms an integral part of the group now.
Rice farming 40 years back was everything to Berbicians. Land was scarce. “So what my father did was to invest in machinery, and soon after he started to rent other people’s land to plant rice. When I finished school it was then that my dad and I thought we would put more emphasis into renting more rice lands and during that time we became the biggest rice farmers in the Corentyne. We were planting over 100 acres of land.”
Mohin attended the Manchester Secondary School but did not proceed further. “When I started to work full time with my dad I was just about 15 years. My mom, Sakuntie, would also help.
She took care of the poultry and cash crop part of the business. She also worked really hard, we grew up not too far away from this factory…just about two houses away.”
The poultry farm, a huge one, was also not too far away. It was in 1982 that the family opened Nand Persaud Spare Parts Store.
It was rice farming and the spare parts that the family concentrated on from 1979 to 1999.
The business was growing. It was in the mid-90’s that the Persauds thought it best to venture into a whole different level of rice business.
The company had been investing in machinery like tractors, and farmers looking to increase production, readily bought into the attractive hire purchase terms offered by Nand Persaud.
MAJOR RISKS
According to Mohin, the company found a huge demand for parboiled rice in the region. While Guyana was mainly into exporting the white rice, parboiled was unheard of.
The company went to the bank, and pledging their assets in the Corentyne area, managed to secure financing for Indian equipment capable of doing partial processing. Using monies from its spare parts operations, which was doing well, Nand Persaud built up the swamp area at Number 36 Village.
It was a huge undertaking with Nand Persaud banking on the ready market it thought it had in the region.
“We felt it would have worked because parboiled rice was never done in Guyana, so although there were many other mills, we were confident. I travelled a lot with the spare parts business so that was how we were able to discover the huge market for parboiled rice that was available.”
The family even travelled to India for the special machinery needed to process the rice.
Even back in the 90’s, there were still suspicions about the local ‘brown’ rice because of the high smell. Housewives simply preferred the cleaner looking white rice.
Production started in 1996. Nand Persaud had arrangements with producers in the region to buy the semi-processed parboiled rice. But the arrangement was an unsteady one.
The arrangement fell through and Nand Persaud faced their worst nightmare…they were left with huge stockpiles in their facilities. With farmers to pay, the pressure was building. “We had to eventually sell some as animal feed to recover the monies.”
Not daunted, the company took the plunge. It went back to its bankers and borrowed more, buying equipment that would produce the best of parboil. It entailed installation of the best of machinery on the world market. It was a huge gamble that had even Mohin’s father a little nervous.
“My dad was just about 55 when we started this factory and it was a joy for us because together we worked as a team. My brother, Rajin, myself and dad worked really hard to set this factory. We came up with the name Karibee and started production.”
The challenges did not stop there. Nand Persaud had parboiled rice and it was the first time that a company in Guyana had such equipment to produce in such commercial quantities.
But the markets had to be found. And steady ones at that. Guyana still was not yet buying into the idea of parboiled rice.
“It was lots of work and we struggled but we managed to talked to just about everyone to put this product on the market. We were basically catering for foreign market because nobody wanted it in Guyana.”
The company’s struggles were getting the distributors to buy in on Karibee Rice and placing it on their shelves. Mohin and his brother were travelling to all parts of the region, especially Trinidad and Barbados, to convince distributors.
It was tough going. Tax breaks at that time for such a large investment was not readily forthcoming. Nand Persaud was forced to pay heavily on the equipment.
“We invested a lot and almost all our assets were at stake. As a family we really held together and believed in what we were doing.” Karibee Rice was slowly gaining ground in the regional market, especially Trinidad and Barbados. Taking note of the attractive packaging offered by its overseas competitors, Nand Persaud immediately started experimenting with doing the same. “The packaging of the Karibee Rice was a boost. People loved the sizes and looks.”
The demand for proper packaging aspect caused to Nand Persaud to invest in another company…packaging. The packaging arm has grown rapidly, conducting business with other producers involved also in rice, chowmein, and other products.
DIVERSIFICATION
Around 1999, when Karibee Rice was just starting to gain traction, the Persauds became first in another area: call centers.
Hearing about the growing business of outsourcing by developed countries searching for cheaper labour, Nand Persaud conducted its research and decided to plunge headlong into an area that again, to Guyana, was in virgin territory.
The call center was up and running in 2000. “It was after we saw that the rice was moving. We decided to take up another challenge. It was an opportunity and we didn’t want to refuse it. We were the first persons to introduce call centers in Guyana. It was our baby just like the parboiled rice.”
Today, the call center, NPI Communications, has stretched its tentacles from Berbice, establishing another branch in Diamond, employing a total of 350 persons. Mohin’s brother, Rajin, has been concentrating on the call centers operations.
“Between the two call centers we have about 350 people working. We have at the mill about 200 persons. In any business that you do, you have to invest time and concentrate on what could benefit the company and that’s what we did. We didn’t just plant rice. As the opportunities came we took the risks or chances and we struggled to make it a success because we knew it would do well,” a confident Mohin said.
“We sat down and discussed ideas to make our products better and I think that was one of the many reasons we are successful. We never allowed our resolve to weaken.” While initially the intentions were to just do parboiled rice, the company has brought more equipment and is producing white rice. It is a big part of the milling complex. It is but testimony of the aggressive nature of the company. “The white rice helped us a lot because the parboiled took a while to kick off.”
In the 2000’s, Nand Persaud managed to, through a US partner, find a crucial market in Haiti, which had a huge demand for food. “The Haiti market loved the white rice and we made a lot of profit off that.”
But Guyana had to ease off the Haiti market as shortages hit the local market.
In Region Six, Berbice, Nand Persaud’s demand for rice has now moved the company to become the largest buyer of rice. As a matter of fact, the company is the largest buyer of paddy in the country. In Berbice alone, they are responsible for buying 65% of the paddy from farmers.
“We control about 60% of the rice market in Guyana,” the General Manager explained. “When we started we basically wanted to cater for a small market, but the market just kept on growing. In Trinidad we have surpassed our expectations, and in Barbados too.” The company has gone as far as the Eastern Caribbean, tapping into places like St. Lucia and St. Maarten.
Mohin, who married Sharda in 1988 is a father of two- Akash, 22, and Sherry, 25. The fact that almost all the family members are involved in the business is another strong indication of the family’s belief of togetherness, a factor which has helped built it into what it is today. He made it clear that he nor his family never thought of chucking it in.
“We stood our grounds even when there were times when things got rough and I worked even harder. I…we… wanted standards and that’s why we chose to excel in the parboiled rice.”
Nand Persaud has now ventured further. It has established a seed paddy facility for farmers.
The Corentyne teen who went no further than high school has taught himself a whole new business world. “I have learned a lot over the years. We keep ourselves informed all the time and we keep people around us that would benefit us information-wise. We also had good advisers.”
Nand Persaud has even ventured to places like Panama for its market. He believes that it is all about marketing. “There is always market for rice but you have to stay within the price range, you cannot price yourself out.”
To even keep up with the market, Mohin, who is fully in charge of the rice operations of the group, is venturing into producing rice for the high-end market. “We try to be unique in whatever we do.”
HELPING FARMERS
Last year, Nand Persaud took over the operations of the former Alesie rice mill in Black Bush Polder after being approached. It is already looking to produce another brand that will compete with Karibee Rice…just another indication of the Persauds’ genius.
Of course, with the demand for fertilizers, Nand Persaud has also been importing, introducing attractive credit facilities for farmers.
“We are also educating them, teaching them different ways of applying fertilizers. It is all part of who we are as a company. Based on a credit system, farmers do not even have to pay any money until they are harvesting their paddy.”
The group has also been offering a line of Chinese-made, low-maintenance tractors and other equipment that are designed to reduce overall, long-term costs for farmers. While a number of other companies have entered the parboiled rice market, it is Nand Persaud and Karibee Rice that have been leading the way for the value-added product with its attractive bags. Its catchy advertisement, “Some kinda rice…any kinda rice”, has made Karibee a household name.
And Mohin is proud of it. “There is no other company or family that does what Nand Persaud does for Guyana. We have given this country parboiled rice…it is our baby. We are very devoted to what we do and we are very proud of it. Nand Persaud is a 24-hours working factory. We never sleep.”
In the factory itself, Mohin is proud of Nand Persaud’s achievements. The company, using its knowledge, built its own driers from scratch.
In its lab, the operations are fully computerized. In five minutes, at the touch of a button, a farmer can received a statement of his transactions with Nand Persaud to take to the bank. It is new technology in the market. There is no need for an accountant.
Another few clicks will bring up all Nand Persaud’s transactions for the day…or the year. It is one of the most sophisticated systems in place at a rice operation in Guyana. Even other millers have been visiting to assess the operations.
In the mills itself, health and other safety requirements are strongly enforced.
According to Mohin, Nand Persaud is now in talks with the possibility of using aircrafts to apply fertilizers to rice fields in Berbice. “We are looking at it and this has the potential to reduce the work of the farmers and make things easier for everyone, including us.”
The long lines of trucks in front of mill as the last rice crop gets into swing for this year, is also testimony of how much regard the farmers have for the company.
Nand Persaud itself has not been concentrating on business alone. Its corporate and social responsibilities have stretched from charities to the sponsorship of two local cricket teams…one male, one female.
It has also received numerous awards including the “Presidential Annual Award For Rice Export Achievement” from the Guyana Manufacturing and Services Association. The award, presented in 2011, was for breaking into new markets into French-territories- Martinique and Guadeloupe.
Indeed, Nand Persaud has broken new grounds, threading in territories few would dare. They have done remarkably well for themselves, for the farmers, and for Guyana.