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Earlier this month, the FT profiled Moni Varma, founder of Veetee Rice, for its entrepreneur column. As an immigrant from Malawi, Mr Varma’s journey to success in the UK will have obvious resonance for many south Asian shop owners.
Mr Varma has built a public profile on the back of a successful track record as a supplier to the multiple supermarkets and more recently through developing his own Dine In range. Late last year he joined the chairman of Asda in signing a letter to the Daily Telegraph supporting the government’s cuts to public spending.
Interviewed by Jon Snow of Channel Four, he said his optimism in creating new jobs and investing in the Dine In range was fuelled by the downturn because people were going to be eating in more frequently.
Mr Snow challenged Mr Varma’s view that the private sector could kick start the economy, saying that most small businesses could not get the loans from banks. Mr Varma’s answer was that he ran a small business (£80 million turnover BUT competing with Mars) and he achieved the loans.
How to get loans? You have to tell the story right and you have to get the results right, he says. There are difficulties but they are not insurmountable.
Spotting an opportunity
What Mr Varma is good at is the hard work of spotting an opportunity. He built his business on a simple fact. He saw that import duties for milled rice into Europe were £400 a tonne and for unmilled rice they were £200 a tonne. He knew nothing about rice but knew this was a good margin. He worked out that he could borrow the money to build a factory in the UK and the business would pay if he could sell 1,100 tonnes a year. His challenge was to get the volume of sales. The answer was own label for Marks and Spencer initially and then the supermarkets.
When to say no
Another important lesson is that of when to say no. Technology developments in Japan meant you could put rice in a pouch and sell it to UK consumers who could not master the art of cooking rice. Uncle Ben’s was the first mover in the UK and supermarkets asked Veetee to do own-label pouches. Mr Varma refused: “The brand leader and first-mover advantage was taken by Uncle Ben’s so anybody else would only struggle along behind…And I was so used to being mucked about by private-label, where margins went wafer-thin at times, that I was not prepared to go into another product just chasing someone else.”
Instead, he went to Japan to see what he could develop and the result was the Dine In range, targeted at the convenience market in the UK.
“What motivates people like me is that there is a problem that you want to solve,” Mr Varma told the FT. Pick the right problems to solve and your business is likely to be successful.
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