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Business
BY PAUL RODGERS Business Editor rodgersp@jamaicaobserver.com  
February 28, 2012

Date with destiny

GROWING up in Uganda, Dhiru Tanna was determined not to join the family business, his parents’ soap factory. He immersed himself in the study of economics, followed by stints as a university lecturer, a civil servant, a banker, a corporate executive, and a consultant before opening his own hardware store. But you can’t escape destiny; Tanna now runs the largest soap factory in Jamaica.

Blue Power is a bit of an oddity, created almost as a challenge to conventional thinking. Tanna had closed his original hardware store on Victoria Avenue, Kingston, in 2001, but kept the building as a warehouse and office for his bigger store, Lumber Depot, on Gordon Town Road, Papine. But what to do with the extra space? “Everyone said you couldn’t succeed in manufacturing in Jamaica,” says Tanna. He decided to prove “everyone” wrong.

He started with a vintage 1922 soap-making machine from England, now long retired. “Jamaica is one of the largest markets for laundry soap. If we could get five to six per cent of that market, we would be able to cover the rent, utilities and so on,” he says. But retailers were reluctant to carry his upstart brand. For the first two years, he lost money.

Undeterred, he experimented with the packaging and pricing, which helped. But the secret of his success was, aptly, a sweeter smell. Most laundry soaps use citronella, traditional in Africa because it repels mosquitos. “But Jamaicans love a fresh scent compared to a soapy scent. We added a sweeter, floral perfume.”

Often in Jamaica, people use only one type of soap for laundry and washing up and personal hygiene. But the company makes many different kinds, often branded for other companies such as Lasco. Among his lines is an anti-bacterial carbolic soap for hospitals and garages, where it’s prized for its grease-cutting properties. But he categorically denies claims that his flagship blue soap will bleach people’s skin, noting that his wife uses it to remove her make-up.

Although challenged by imports that dodge government duties and hampered by the cess on coconut oil, the company could still thrive in the global marketplace. It currently exports five container loads a year to the US and one to Britain. “Why would I be able to export if I needed the duty to survive?” he asks. In the year ending April 30, 2011, the group had a net profit of $54.7 million, up from $29 million a year earlier.

For a man who has swept through the corridors of power, both corporate and governmental, Dr Dhiru Tanna is strangely at ease touring his soap-caked factory or talking in a pokey little office. His posture is as ramrod straight as a sergeant major’s, yet his casual loafers are worn without socks. His hobby, he says, is bridge, but that’s an understatement. He has represented both Uganda and Jamaica at world championships. He is engaging and enthusiastic –how many people could make an interesting conversation out of soap?

The most dramatic episode in his life came in 1972, when the murderous Ugandan dictator Idi Amin, the self-proclaimed Last King of Scotland, ordered the expulsion of the African country’s 80,000 Asians. Almost half fled, including Tanna’s relatives, who held British passports. Tanna had a Ugandan passport with an expired US visa.

“Amin announced we were sitting on a fire,” says Tanna. “He was a great admirer of Hitler. The fate that awaited us was to be put in a concentration camp up north that was already under construction.”

His boss at Makerere University persuaded the family to flee, but Indians were not allowed to take luggage the 21 miles to Entebe airport. His wife, Laura, “a blue-eyed blonde”, had to go first with their possessions. Despite his expired visa, the couple were allowed into the US where he finished his doctorate in economics at University of California, Berkley.

Although offered a job in Michigan, he decided to spend a year teaching in Jamaica, where the couple fell in love with the country. He became a research fellow at the Institute of Social and Economic Research, doing work on Caricom and exchange rates. From there, he became an advisor to the minister of Public Utilities and Transport, then worked for the Jamaica National Investment Corporation, which handled the Government’s bauxite interests.

Tanna considered leaving the country when political violence peaked in 1980, afraid that the fiercely nationalistic Michael Manley might prove to be another Idi Amin. But he was persuaded to stay by Sidney “Bullmoose” Knox, the CEO of Neal & Massey. He stayed with the Trinidadian company for 15 years, joining the holding company’s board in 1983.

His defining characteristic is perhaps that he’s an iconoclast, a man who demolishes cherished beliefs. Consider his Lumber Depot, which serves as a slap in the face to modern retail theory. In an age of self-service, big-box stores, it’s an unabashedly old-fashioned, full-service shop. “Everything is done at the counter,” he says. “In many cases, the customers come with lists from their contractors. At my competitors, they would have to go through all the aisles to find what they want, and often they don’t know what things look like.”

Most retailers have security guards watching the premises during opening hours, adding to costs and inconveniencing customers. Not at Lumber Depot. Nor does he have a fleet of expensive company vehicles. Customers who need help getting their purchases home don’t have to wait for delivery, they just hire a driver at the gate.

Cutting the delivery service has other advantages. His competitors insist on minimum sizes for orders, to justify the delivery cost. “At our store, you can buy any quantity. People come and ask me how much for a dozen dry wall screws. The same thing applies to blocks.”

Even if they do buy in bulk, customers don’t have to take everything home at once. “People building up in the hills will buy, say, 50 bags of cement but they don’t want them all at one time. We’ll keep anything in stock for 30 days.”

He’s also open on Sundays, offering a 7.5 per cent discount and lollipops for children and women. “On Sundays, I work there myself. A lot of people like to see the boss. They use me as the suggestion box or the complaints area.”

Blue Power was the second company to list on the junior stock market, and the first that wasn’t affiliated with a broker. Some of the $88 million raised went to expanding the soap business, but one of the main reasons for the move was to ensure the company’s future. Born in 1943, Tanna is now approaching 70, and he has no children to inherit. “This creates a situation where the business will survive,” he says. It also allows his backers to sell their shares on the market. “The exit strategy is important.”

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