Jose Thomas

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THE NELLORE SAGA
Thursday 06th January, 2011



     

 

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Dear friends,

Hope all of you had a great entry into 2011.  I hope you have read the message I posted on 31st midnight and found it inspiring.

With Christmas and New Year behind us, I am now going back to my life experiences – my blog…..my stories.

The factory in Cochin started making lots of money.  The shipping business was at its peak representing various shipping lines, Choice School and Choice Constructions started – everything was looking good, everything was in my favour and I was in top gear.  This built a lot of confidence in me and I started to look out for more opportunities.  This is when I heard India was gearing up to get into the blue revolution: The Aqua culture boom.  Aqua culture is where seafood (in particular shrimp), could be grown on land by pumping sea water into ponds, simulating conditions of the sea, producing larvae in hatcheries and raising them in these ponds by feeding them and then harvesting them in about 120 days.  This was something unique compared to what I was used to (depending on the sea catch for my factory).  This created a lot of curiosity in my mind and I saw an opportunity here.  Research by scientists pointed that the best area for aquaculture was towards the coastal area of Andhra Pradesh, India, starting from Nellore District and going all the way up to the border of Orissa.  Everybody was new to this, even the government.    The potential was huge and many engineers ventured into this business because aquaculture required a lot of engineering skill.  So I saw young technical people coming into this field, supported by the rich landlords in Andhra Pradesh. With the government giving the backing, a lot of support was available.

My focus, as you all know, was not just the money.  It was growth and this kept me on the lookout. 
I did some study and evaluation and started to visit the Nellore district and found that there was an opportunity for us.
THE BLACK TIGER SHRIMP ERA BEGINS:  its value equivalent to gold those days.  1 kg of black tiger was fetching around Rs.500/kg.  Wow! What an opportunity.

The man market for black tiger shrimp started off with Japan.  The Japanese just bought the black tiger in raw material form, of course block frozen and took it to Japan for further processing. 
You know I have always believed in value adding and hence decided not to participate in the Japanese trade because there was nothing interesting for me to do.  So I looked toward the U.S., my favourite country, but I found out that getting into the  Black Tiger business, that too, into value addition needed a strong partner; an importer or distributor with a powerful brand name, having an excellent relationship with retailers, wholesalers and of course, with tons of money.

The shrimp I was processing and exporting from my Cochin factory was valued at only RS.100 per Kg whereas the black tiger shrimp, when processed, value added and shipped, realized at about Rs.1000/kg.  This simply meant more capital, more money, and more exposure.  Even though Choice U.S. at that time could have ventured into this, I realized due to paucity of resources, it was wiser not do this.  Hence I scouted around for a partner.

During 1992-93 there were four major players in the U.S. who were already importing Black Tiger value added products from Taiwan, Indonesia and China.  India had no presence in this market. 
I established contact with two of these four players. They did not give any sort of encouragement as they did not want to take any risk buying this high value product from a country with an unproven track record.  They had already established a line of trade with other Asian countries.  So I saw a road block here, but I was not going to give up.  Amongst the four, the topmost was a company based in Los Angeles, headed by a highly flamboyant industrial-minded individual who had created a branding edge into value added black tiger shrimp (I do not wish to name the company nor the individual).  Instinctively I knew I had found my partner and began to prepare ground to find an opportunity to meet with him.

My initial attempts were futile as he was not interested in meeting me with my Indian story.  Yet I was not about to give up. I employed many tactics and with the help of the Indian Embassy in Washington D.C I finally got an opportunity to meet with him.  I was awed by his personality first, his office, organization, style, flamboyance, his cars and so on. Suddenly I was acutely aware that I was a nobody in this country whereas in Cochin, my little town, I thought I was someone.  The scale of my ambition grew from the moment I met this individual. 
I sold him idea of Choice setting up a factory in Nellore, Andhra Pradesh to process value added Black Tiger shrimp under their brand and made a deal with them for a complete buy back trade relation.  They were very hesitant, but I persuaded this gentleman and his deputies to visit Cochin.  They were convinced and decided to go ahead.  The deal was that we would make the investment for setting up a factory designed by them.  They will provide the processing technology, supervise our production and by-back all that we produce.  What a deal!!  I was on cloud 9 especially that I was partnering with this particular company.

The process began - factory was ready in 90 days.  Magical!!  This factory was situated in the middle of nowhere in Nellore; even soda water had to come from Madras. Nothing was available   I built this factory with all facilities in the same compound – housing for 250 female workers and close to 100 male workers with complete infrastructure – air conditioned dormitories, cafeteria, kitchen, toilets attached to the dormitories of international standards and trained the labour force into becoming super efficient individuals because my partner expected all this.
This company taught me a very important lesson. In a food processing company you can make a good or bad judgment from the quality of hygiene in the workers toilet.  I learnt it well.  Even today, I pay attention to the toilets in my factory, school and every business that we own and operate.  People in India generally lack hygiene.  I will talk about this later.  The project soon got off the ground, production commenced, shipments started to go and there was money flowed in.  My sales jumped three fold, the banks were impressed, more friends were added to the list, more parties.
All the trappings of success!
I still remember during this time I was in Delhi and I saw a brand new BMW car.  It took me just a minute to buy this car. I had not seen another in the state of Kerala.  Friends, I was in fifth gear. 
My relationship with this company grew manifold. I began to imbibe a lot from this individual, mostly his style and he became my hero.  This company grew every year and this individual even bought his own private jet. I was fortunate to travel in it.

Doing business in this little village in Nellore District of Andhra Pradesh was altogether a challenge.  No phone or train service, bad roads, a cyclone prone area, everything had to come from Madras – from rice to engineering goods, crop failure, disease in the shrimp and so on.  After a good run the business did take a down turn but I look back with no regrets. I learnt a lot.  What a great experience.  I liked this challenge because I wanted to gain experience and I was bold in facing this challenge.  It helped in making me a positive thinker.  Positive thinking and good decision making is the key word to success.
Go for it.

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Responses to
 k.p.joseph says:
very inspiring story. the marxists teach people that money making involves expoitation of fellow human beings . but money can be made by innovative ideas and enterprise and treating people as dignified assets . The most inspiring bit in your story is the importance you give to 'worker's toilets. 'Small' things are not small in great endeavours .Go ahead and contribute to India's GDP growth the right way .
 
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