Gafoor thinks big (really big)
Stabroek News
July 9, 2004
No slowing down for Sattaur Gafoor overseeing work at his Houston Complex.(Ken Moore photo)
You would have thought that at 64, Abdool Sattaur Gafoor, owner of Gafsons Industries Limited might be slowing down. Think again. He is in the midst of a huge expansion of his Houston, East Bank complex aimed at making it into a modern shopping centre, patterned after UK department store, Selfridges.
He also plans to reduce his stock in the family enterprise before he retires in another six years after which he intends to catch up on the education he missed as a young man. "I am hoping in five years' time, we can structure the company in such a way, it can go public. I will not be here and will only hold a limited amount of shares. But if I am asked, I will continue to act as chairman," Gafoor told Stabroek Business.
Gafsons is now held 100% by Gafoor, the only family member in the company. His eldest son, a computer engineer is running his foreign business interests while his two other sons are practising surgeons abroad. His eldest son is not inclined to return, having received death threats during the recent crime wave.
Gafoor says a process begun some time ago to fully corporatise the firm and this is about 80% complete. The company is run by a chief executive officer whose main function is to change the image of the company from a family-owned business to a corporate organisation. This is expected to be fully realised in about three years.
"The future of any organisation that wants to live beyond the life of its founder can only be achieved via a corporate institution...We will take the company public as fully as possible," Gafoor declared.
He says he would be happy to entertain any serious offer for an equity investment and controlling interest in the company if it is made. Three years ago, Metro Trade of Canada made an offer to buy out the business estimated to be worth US$50M.
"While the price was not exactly what was required, I was willing to sell. But the street demonstrations, killings and kidnappings caused the company to change its mind," Gafoor said.
As it is, Gafoor is entertaining a Trinidad company in talks for an equity investment in Gafsons.
Consolidating at Houston
Gafoor, with the help of Canadian consultant, Sugrim Mohan & Associates, has managed to transform his business from an archaic cubby-hole operation to a small department store. But he is not finished. By the time the $5B investment (including stocks) is completed at the end of 2005, he would have transformed the Houston Complex into a modern retail outlet offering hardware services as well as housing a mall.
The ground floor would be used exclusively by Gafsons as a wholesale/retail department store, but offering an expanded range of what the company is already carrying in the self-service section.
The second floor, which currently houses the offices, would be transformed into a showroom, displaying model homes with windows and roofs as well as fixtures and fittings. The middle floor will also house a café.
Space in the third/upper floor would be rented out to clothing merchants and fast food outlets offering Indian, Chinese and local dishes. Visitors would also be able to pay their utility bills on this floor, which will have a pharmacy and other shops.
"By the end of December 2005, the ground, middle and top floor would be fully operational," Gafoor said.
Work is underway to extend the complex and when completed, it will stretch from the East Bank public road all the way to the Demerara River. Immediately upon entering the compound from the public road, one would have access to a parking lot, later to become a four-storey parking lot if the demand is there.
Patrons will be greeted on entering the building with a hall, covered with a translucent glass roof and a waiting area with a fountain.
Seven outlets closed in city
It is all a long way from the horse carts and pot-holes of Sussex St where the 51-year-old company was headquartered between 1978 and 1996. They moved back to the original residence on Hadfield Street.
But with a head office staff of 98 at the time, Gafoor remembers that the space was inadequate and it was time to look ahead.
"Together, we saw the need to consolidate the entire trading operation under one roof. We were experiencing difficulties in getting competent and reliable managers to run our outlets at the time and it was a waste of our resources to have to transport goods to nine locations (in the city). In addition to that, we were not offering every item under one roof and the products at each location were not similar, though certain core products were offered," Gafoor noted.
He then hired Sugrim Mohan who spent two years on and off with the company and drafted a vision of where the company should be in five years and then in ten years.
The sensible thing was to relocate all the small outlets under one roof, offer wholesale and retail services as well as provide secure and easy parking to customers at a location outside of the city. It was on the basis of this vision that Gafoor impressed upon Eddie Vieira to sell him the land stretching from the road to the waterfront for $2B and he subsequently closed seven of his outlets in the city. The two outlets still open are in Regent and Broad Streets.
Gafoor says the vision was to have a strong trading facility where each staff member could be trained in offering not only over-the-counter service, but also being knowledgeable about products as well as suggestions on options.
In May 2002, phase one of the Houston Complex was open offering general building materials. Eight to twelve weeks later, subsidiary items such as home furnishings were also on the shelves.
"But we feel to offer a truly representative service, it is necessary to have a floor dedicated to exhibiting all the goods we stock and we will allocate the middle floor to this. The ground floor would be used exclusively by us and we will be renting out the third floor," Gafoor says.
He feels the consolidation of the operations was the best thing that could have happened to the firm and should have been done earlier.
Why invest in Guyana?
But why does he continue to invest in an economy plagued with political and social tensions and which has been stagnant in the past few years?
"You can never write-off a country. No country ever dies. If only we can resolve our racial differences, this country can take off," was his initial response. But he notes that to an extent, his resilience has been a result of patriotism.
"I could have been sitting in the US or Canada playing the (stock) markets.
"However, there is the question of self-satisfaction...a sense that you are doing for your country, which was in the first place the foundation of your success. You know what it is to see a piece of land and transform this? It gives tremendous satisfaction. It is not money that motivates us." As part of its ongoing charitable budget, the company has this year constructed ten homes for the poor, free of cost.
Gafoor adds that sales have been improving in real terms but not by marked percentages. However, he credits those improved sales to his workers.
The rate of return on investment, Gafoor says, has been rather disappointing but it has been sufficient to allow him to meet his obligations. The National Bank of Industry and Commerce is the major financier of the company and provides at least 25% of its financing needs.
To what does Gafoor credit the ability of his company to stay afloat, when many family businesses have gone under?
Gafoor says his management team monitors its expenses, sales and stock position each day and if there are any deficiencies, corrective action is taken immediately. The company has 25 departments and their sales targets are set every November. The CEO monitors the progress of each department daily. "I keep on top of things and our constant evaluation has helped us stay away from problems," he says.
Smart workers mean more sales
Gafoor takes much pride in his workforce and spends a large amount of time trying to educate them. Today, the company has 750 employees and Gafsons spends $300,000 each month to educate them.
Each week there are compulsory training courses for different levels of staff. On Wednesdays, the sales staff and managers are exposed to the art of public speaking under the directorship of Toast Master's International. This is a two-hour course and the company provides transportation for each staff member to get home.
On Thursdays, Gafoor himself goes through the newspaper with his staff and discusses world affairs and local news and how it may affect Guyana and each worker's life. On Tuesdays, all porters are taught to read and write and to do basic arithmetic.
"A more knowledgeable staff speaks fluently and they are not afraid of anyone," Gafoor asserts. He sees emigration as the greatest threat to the private sector and his business, noting that he lost two senior officers recently.
The company's policy is to try to make workers feel as though they belong and are part of a family.
The challenges
Quick and positive decisions from the government is one area in which Gafoor would like to see improvement. He also calls the recent decision by the Guyana National Bureau of Standards to introduce another step in the customs clearing process, a retrograde step. He argues that the GNBS should be conducting its inspection at warehouses. The GNBS has announced that all entries must be checked at the Bureau before goods are cleared. However, in the case of Guyana where entries often do not correspond with what is imported, this would be a futile exercise.
Gafsons also finds itself facing competition from Trinidad for its exports. The company exports about 17% of its products but competes with Trinidadian businesses which pay US five cents per kilowatt of energy while Gafsons pays US 24 cents.
And the unit cost of production of a similar manufacturing business in Trinidad costs a fourth of what it would cost a manufacturer in Guyana, Gafoor says, explaining that what one worker in Trinidad would do, it would take four workers in Guyana.
Gafsons has also had to counter with losses as a result of poor quality power supply and is hoping to generate its own power from January.
Berbice lad makes good
Gafoor hails from the Number 56 Village on the Corentyne and attended the Central Corentyne High School. After his Senior Cambridge (equivalent to A levels) in 1959, he joined his father's lumber-yard and hardware store which he later took over in 1973. With his influence, the company went further into manufacturing but differences with President Burnham saw Gafoor migrating in August 1980 to Barbados. He would later establish similar businesses in Grenada, Dominica, St Lucia and Jamaica before returning to Guyana in 1992 at the invitation of Dr Cheddi Jagan. His eldest son now runs the Grenada and St Lucia operations while his brother runs the Jamaica operation. The business in Dominica has since closed.
Despite his successes and achievements in life, Gafoor still feels deficient in his education. Gafoor sacrificed his dreams of a tertiary education to help fund the education of his brothers and then his three children. His wife holds a MPhil degree. Now he plans to join the club by reading for an executive MBA on his retirement.
"I was not a very good achiever at school. I had to work to assist my father and my time for my studies was very limited. When I left school I resolved to improve my education capability and to try to achieve something outstanding. I feel I have achieved something...."
"The most important thing now is education for myself." But while he suffers the proverbial chip on his shoulder about his lack of education, he has the street smarts and has achieved success under trying conditions. He says money is not important as he still lives in a simple house and drives a simple vehicle. People know the name Abdool Sattaur Gafoor but not the man behind the name; many would not recognise him if they bumped into him on the street.
His dream would be realised when the Houston Complex is completed and his staff is superlative in the context of Guyana's society.
"My greatest satisfaction has been that my employees respect me and do not see me above them. I do not demand respect but try to earn it. I try to earn their confidence and to my mind when I pass around, they show tremendous respect."
His wish for Guyana is for the political leaders to forget the past and to become statesmen, following the example of Nelson Mandela and to put the country first.