BC Business
Entrepreneur of the Year 2005 -- Manufacturing
Every morning when Maheb Nathoo pours soy milk on his breakfast cereal, it reminds him of the time he convinced 1,750 skeptical dairy farmers that the lowly soybean could well become their next cash cow. In the mid-1990s, Nathoo was VP of finance at Dairyworld (now Dairyland) and had guided the Western Canadian milk producers’ cooperative through a tough consolidation. Dairy companies were feeling the pinch. Researchers were linking milk to increased risk of cancer, diabetes, obesity and heart disease, and it trailed soft drinks and coffee as Canada’s No. 3 beverage of choice. Savvy producers were seeking a way to add value to their sacrosanct product with a major image problem. Nathoo found inspiration – and what would be the seeds of a vast, untapped business opportunity – in the family refrigerator, where his lactose intolerant daughter Tasnim stocked a supply of soy milk. He soon realized that with a bit of tweaking, the ubiquitous soybean – already an abundant, high-quality Canadian commodity – could be harnessed by milk producers to prop up the sagging cow. If a juice company could offer a range of juices, he mused, why couldn’t a dairy company sell a range of soy milk products, replacing traditional yogurt, ice cream and cream cheese? In 1997, Dairyworld handed him $250,000 to penetrate this emerging market. It was a giant leap of faith for the company and a big risk for Nathoo, who climbed the corporate ladder through the traditional accounting ranks. That first day, as he sat at his desk with his Dairyworld cheque and a blank sheet of paper, Nathoo knew he’d made the right move. Picking up the phone he set to work, guided by three strategies he still considers crucial to the success of any start-up: building synergistic partnerships, hiring and equipping a strong creative team, and minimizing fixed costs. First, he called Canada’s leading tofu producer, Vancouver-based Sunrise Markets, who agreed to participate in a joint venture and injected another $250,000 into a new company, Soyaworld. As part of the deal, Sunrise contributed its already successful traditional Asian soy milk brand, giving the start-up an instant revenue stream based on $3 million in sales. Buoyed by a second cash infusion, Nathoo contacted an Australian leader in the soy milk sector and acquired the licence to make its flagship product, one more palatable to Western taste, here in Canada. Logistics in place, his next and perhaps biggest challenge was to convince non-believers of the joy of soy. He knew it required a colossal marketing effort to position Soyaworld’s products as delicious, nutritious alternatives to milk. Today Soyaworld is Canada’s largest soy beverage manufacturer and its products are in one in every five Canadian homes. Sales have increased from $3 million in 1997 to $50 million in 2004. Its brand portfolio includes So Good Soy, So Good Non-Dairy Frozen Dessert, So Nice Organic Soy, So Nice Yogurt-Style Cultured Soy and Sunrise, the specialty soy milk for the Asian market. Nathoo, 53, believes a tough start in life prepared him for this new role. At 17 he left the troubled East Africa country of Tanzania for a new start in the U.K. Arriving with only $540 in his pocket, he found a job and invested the money in accounting courses at night school. After six years in London, he joined the rest of his family in Canada and settled in Vancouver. He advises would-be entrepreneurs to never be afraid to stick out your neck. “In the back of my mind there was always the drive to build something from the ground up,” he adds. “Looking back, the challenge of moving three continents shaped the person I am today. It made me stronger, more adaptable, more open to new ideas. It was an advantage, absolutely.” Runners-up James Swanson & Terry Ibbetson Few businesses actually see sales grow as a direct result of increased international terrorism. However, Con-Space Communications, one of the world’s leading designers and manufacturers of specialized voice communications equipment used during the attacks of 9/11 and the London underground bombings, is one. Its products are considered vital by emergency responders, military personnel, local governments and industry in 30 countries. Not surprisingly, this year Ibbetson and Swanson plan both a plant expansion and a couple of acquisitions. Robert Meggy Meggy’s unique corrugated box operation, which he expects to double in size over the next three years, takes pride in the quality of its workforce and on meeting the packaging needs of the little guy. As Great Little Box Company eyes further growth in Washington State and here in its own backyard, early next year the operation is set to move into custom-designed, employee-friendly Mitchell Island digs the size of four football fields. Related stories: Entrepreneur of the year 2005 Entrepreneur of the year 2005 – Natural resources Entrepreneur of the year 2005 – Health sciences Entrepreneur of the year 2005 – Business-to-consumer products and services Entrepreneur of the year 2005 – Information technology Entrepreneur of the year 2005 – Business-to-business products and services Entrepreneur of the year 2005 – Emerging entrepreneur