Mohammed Gafoor lshmail is one of several Guyanese entrepreneurs who have hedged their bets, returning to Guyana to set up businesses over the past decade or so after having made earlier successful investments in their adopted countries, mostly in North America.
After living in Canada for more than two decades Ishmail returned to Guyana in 2010 to establish a manufacturing enterprise along with a friend. Cuddles Touch Inc was a modest factory that produced toilet tissue, paper towel and paper napkins for the local market. The enterprise ran for two years before it folded in 2012.
Two months before this year’s GuyExpo, Ishmail recommenced production with a view to using GuyExpo, the country’s annual product display event as a launch pad for a second tilt at investing in Guyana. This time around he would go it alone, a buyout agreement having been reached with his one-time partner.
Cuddles Touch Inc is situated at Lot 581 Track ‘B’, Section C, Golden Grove, East Bank Demerara. The factory and office are housed in a 200 x 80 building erected in 2013 at a cost of US$500,000. The earlier investment had been located in a factory at Eccles on the East Bank Demerara.
Ishmail believes that official efforts to have Guyanese adjust their tastes to favour local goods over imported ones have still met with only modest success, there being a long-held view that foreign is better. In more recent years that view may well have hardened on account of local access to an increasingly broad range of imported products.
The earlier advent of Cuddles had required a somewhat less aggressive marketing effort, there being at the time fewer brands available of the commodities the company offered. These days, he says, with additional brands – primarily imported ones – having come on the market the extent of the challenge has become greater. While he insists that the quality of his products compares favourably with imported brands he understands only too well that part of his marketing would be to change minds that have been made up over a protracted period of time.
GuyExpo, he says, was encouraging. Sales totalled more than $200,000, and perhaps more importantly the exposure afforded by the event allowed him the opportunity to interface with several potential long-term customers.
Stabroek Business’ own investigation has revealed that the Cuddles brand is yet to break into the major supermarkets. However, price comparisons suggest that at $1,200 for a 24-roll bale of toilet tissue its price compares favourably with the other brands on the market. At around $1,800 for a bale of 12 rolls, its paper towels also compare favourably with others on the local market.
Up until now his clientele comprises mostly restaurants and hotels and he applauds the fact that at least some local service providers are prepared to support the local manufacturing sector.
At the Golden Grove Factory, Ishmail’s staff of eight produce approximately 200 24-roll bales of toilet tissue, 150 bales of sanitary tissue and 150 bales of disposable paper towels. The raw material is imported on huge rolls and several machines are employed in the production process which includes treating the paper and placing it on smaller cardboard spools which are manufactured locally. The hand napkins are produced by the same machines. All of the Cuddles products are hand-wrapped.
Having previously imported paper from China and Mexico Ishmail has now found a cheaper source. That, he says, should not be taken to mean that his present paper imports are inferior. The paper employed in his production process, he says, is identical to that used in the manufacture of other brands of similar product including Cascades, Bounty and Royale.
While Ishmail now appears to be committed to being part of the local manufacturing sector he says that his enterprise is already beginning to feel the hard edge of doing business in Guyana. At the moment Cuddles is being powered by two generators. Monthly fuel costs amount to $20,000. He explains that the absence of power from the national grid is a function of the fact that he is required to pay $1.5 million to the Guyana Power and Light Company for the installation of a transformer, an amount which he says he cannot afford at this time.
Ishmail says he has encountered some measure of frustration in securing the refund of “returnable” value-added tax which is paid to the Guyana Revenue Authority on imports of raw material. He says the process of recouping money from the GRA (Cuddles products are all zero-rated) can sometimes be the devil’s own job: time-consuming and often frustrating. Time spent ploughing through what many businessmen say are notoriously cumbersome procedures can have knock-on effects, including financial ones. Ishmail says that it is not uncommon to find that the 12-day land-free storage facility for containers has expired long before the goods have been cleared. Once that happens importers become liable for a fee of US$80 per day which accrues to the shipping line and the local shipping company.
These days, Ishmail frequently finds himself commuting between Guyana and Canada. He must divide his time between his fledgling local enterprise and his two businesses in Canada: TR Towing and Storage and AM Auto Collision, the management of which is shared by himself and his son Alan.
Ishmail is currently focused on placing his local business on a sound footing and he appears to be in no doubt that effective marketing of his products will do this. It is, he believes, a matter of both persuading local consumers of the worthwhileness of what he manufactures as well as addressing a local proclivity for foreign tastes which has long been deeply embedded in the Guyanese society.
