Fresh from being awarded the Guyana Manufacturing and Services Association’s (GMSA) Exporter of the Year, local rice-millers Nand Persaud Investments is upbeat about the future of the international rice market and more particularly about what lies ahead for them.
In just over a decade or so the company has attracted considerable attention on account of its success in penetrating the regional and international rice market. The firm’s aggressive pursuit of these markets has been both impressive and timely. While its earliest venture into the rice sector was confined to milling and a modest rice-growing operation, its entry into the export market has coincided with the global importance of rice, given the sense of urgency currently attached to satisfying the world’s food needs.
It is as much the wisdom of its investments and the timeliness of the initiatives that it has taken as the favourable state of the international rice market that has caused the company to rise to national prominence and come to be recognised as a major player in the sector.
General Manager, Mohinder Persaud, told Stabroek Business in a recent interview that the company now exports more than 90 per cent of its milled rice to markets in the Caribbean and Canada. More than that, Nand Persaud is contemplating possible new markets, which its general manager says are beginning to open up in Europe and Africa.
In the region, Jamaica is the company’s biggest overall market while most its bulk rice is sold to Trinidad and Tobago. Persaud said the value of the regional market can hardly be overstated. The advantage of the Common External Tariff (CET) has made the regional market “the most comfortable market for us”. He said that in the absence of the CET the company would be forced into what he termed a “flat-foot hustle” in competition with cheaper rice manufactured in Brazil and Argentina. In the period ahead he is anticipating too that the company’s rice exports will benefit from the Partial Scope Agreements signed between Guyana and Brazil and the Dominican Republic, respectively and which are aimed at reducing tariffs on certain products.
For Nand Persaud Investments it has been a question of its faith in the sector paying off. That it has been able to benefit from the doubling of rice prices on the international market over the past three years is a function of earlier investments which it had made in new milling equipment. As the global demand for grains increase and prices rise further, the company continues to remain aware of the direction in which rice prices are heading. Accordingly, it investments have assumed a strategic overtone.
Persaud opined that the global rice industry is in the throes of what he calls “a revolution,” which he says began about five years ago. The global increase in the demand for rice has witnessed an accelerated mechanization of the industry and he predicts that over the next five years rice all areas of rice cultivation and milling will become completely mechanized.
During the second half of 2011, the company upped its paddy intake by as much as 13 per cent, a development which Persaud said was due to farmers’ awareness of the profitability of rice cultivation. Reclamation of old fields and the opening up of new ones coupled with heavy investments in mechanization resulting in a shortening of the process between cultivation and harvesting meant that significantly larger quantities of paddy became available for milling.
Chastened by the conflicts in the industry between farmers and millers over payment for paddy, the company has developed a system for paying farmers which is administered by a local commercial bank. The farmers receive payment for their paddy within a day of delivery.
Persaud posited that it is the company’s constant quest to stay ahead of the game that has been its biggest assert. Its multi-million-dollar investment three years ago in new drying and storage facilities, a parboiling plant, a colour-sorting machine and three packaging machines that produce up to 40 tonnes of packaged rice daily have rendered it operations more efficient. Apart from its own Karibee and Crown Brands, which are sold on the local market, the company also packages brands for Trinidadian and Barbadian millers under contract.
Last year the company’s reputation as one of the country’s most aggressive exporters was underscored when it captured the coveted GMSA award. The association is currently preparing to engage the company to support its efforts with international lending to help further expand its operations.
If the hallmark of a successful business operation reposes in a vision that takes it in the direction of strategic diversification, Nand Persaud Investments is eminently qualified to be described as a successful business operation. The group’s operations include an entity responsible for sourcing and marketing spare parts for factories, trucks, tractors, combines and other agricultural machinery in Guyana and fertilizers. The operations also include a trucking service and a bag factory that produces rice and fertilizer bags as well as shopping and garbage bags. Additionally, the company operates a paddy seed treatment factory that supplies farmers with critical planting material.
The second major company in the group is Nand Persaud International Communications (NPIC) Inc, an information technology services provider that is also anchored in the international marketplace. As early as 2002, Rajindra Persaud, a brother of the company’s general manager and an Information Technology specialist, recognized the benefits of setting up such an entity. The subsidiary company, NPIC Outsourcing was established as a business process organization (BPO) with an international call centre for online marketing. The company currently runs its call centre operations from Tain on the Corentyne and Diamond on the East Bank.
Inevitably, expansion into such diverse fields gives rise to challenges associated with skills availability. Nand Persaud Investments has now become the largest single private employer in Berbice and in order to keep its operations efficient, has had to expend heavily on in-service training that targets the secondary school graduates it employs. The shortage of skills, the company’s general manager said, is a function of the high level of migration among post-secondary and post-graduate Berbicians. The lament of the Persaud brothers is that one is unlikely to find “three university or TI (Technical Institute) graduates working on the Corentyne”. They also believe that the structures of some courses offered by these institutions are unsuited to the needs of local industry. They urge a revamp of the curricula to correct this deficiency.
In this regard they appear most concerned with the agriculture sector the rapid growth of which, they say, has created an urgent need for mechanical and agricultural engineers.
