Raphael John-Lall

Elec­tri­cal In­dus­tries Ltd's (EIL) con­tract with the multi­na­tion­al, Gen­er­al Elec­tric (GE), high­lights the com­pa­ny's ad­vances glob­al­ly de­spite chal­lenges in the in­ter­na­tion­al econ­o­my, says di­rec­tor Hay­den Kublals­ingh. "At a time af­ter the glob­al cri­sis, we in our strate­gic plan­ning dis­cussed our way go­ing for­ward. Are we go­ing to be scared or are we go­ing to fight? We de­cid­ed to bold­ly go for­ward and think strate­gi­cal­ly." Kublals­ingh was speak­ing on Feb­ru­ary 9 at the Arthur Lok Jack GSB's sec­ond an­nu­al Dis­tin­guished Alum­ni Se­ries 2012 at at the school in Mount Hope.

In re­sponse to ques­tions from the Busi­ness Guardian, Kublals­ingh e-mailed ad­di­tion­al in­for­ma­tion last Mon­day. Last month EIL signed a con­tract with GE, which al­lows Agos Man­u­fac­tur­ing Ltd, based in St Au­gus­tine, to man­u­fac­ture light­ing fix­tures. Kublals­ingh de­scribes the EIL Group as the largest elec­tri­cal com­pa­ny in the Caribbean with lo­ca­tions in ten is­lands in the Caribbean and in Flori­da, US.

The group em­ploys 585 peo­ple and 50 per cent of its sales are in ex­ports. These mar­kets in­clude Puer­to Ri­co, Pana­ma, Do­mini­can Re­pub­lic and the Caribbean.

For­eign con­tracts

Kublals­ingh calls GE "one of the largest and most recog­nised com­pa­nies in the world." "Agos cur­rent­ly man­u­fac­tures UL list­ed flu­o­res­cent fix­tures, 80 per cent of which is sold in­to the US mar­ket. The GE con­tract al­lows Agos to man­u­fac­ture a spe­cial light­ing fix­ture un­der the GE brand, which GE will dis­trib­ute in its mar­kets in Cen­tral and South Amer­i­ca." He said the com­pa­ny is able to stand up to in­ter­na­tion­al stan­dards. "Agos was able to pass GE's metic­u­lous fac­to­ry man­u­fac­tur­ing stan­dards and Agos be­ing an ISO 9001 reg­is­tered com­pa­ny, a UL list­ed man­u­fac­tur­er of light­ing and a com­pa­ny run by us­ing the bal­anced score­card, has made the lo­cal firm an at­trac­tive part­ner for this multi­na­tion­al," he said. "It is EIL's in­ten­tion to suc­cess­ful­ly man­age this con­tract with GE and pos­si­bly ex­pand on op­por­tu­ni­ties as the re­la­tion­ship fur­ther de­vel­ops."

Kublals­ingh said EIL's sub­sidiary in Flori­da was set up to al­low EIL to com­pete on pric­ing and time to mar­ket ad­van­tages, two ar­eas in which US sup­pli­ers of wire and ca­ble had the com­pet­i­tive ad­van­tage.

"EIL has part­nered with a com­pa­ny in Flori­da that is well po­si­tioned to ser­vice large elec­tri­cal whole­salers and re­tail­ers in Flori­da. It has al­so al­lowed EIL's wires and ca­bles to be sup­plied in a large elec­tri­cal re­tail chain with over 350 out­lets in the US. "The mod­el min­imis­es risks to EIL as EIL main­tains in­ven­to­ry own­er­ship, car­ries in­ven­to­ry in­sur­ance in the US and con­trols the range of cus­tomers and re­ceiv­ables in the US. EIL is cur­rent­ly ex­pand­ing the range of prod­ucts to in­clude its Agos flu­o­res­cent fix­ture range and its Cen­tu­ry Es­lon pipes and fit­tings," Kublals­ingh said. Speak­ing about EIL's en­try in­to the Do­mini­can Re­pub­lic (DR) mar­ket, he said the com­pa­ny had to come up with its own mod­el to sur­vive and com­pete there.

"The DR mod­el was de­vel­oped as a mar­ket en­try strat­e­gy to re­place EIL's com­peti­tor with the sec­ond largest chain of elec­tri­cal stores in the DR. It is recog­nised that as a large buy­er, the cus­tomer need­ed to have com­pet­i­tive prices that matched fluc­tu­at­ing raw ma­te­r­i­al prices (cop­per prices), read­i­ly avail­able in­ven­to­ry, what they want when they want, and pay­ment terms that were bet­ter than their ex­ist­ing sup­pli­er. "By sup­ply­ing our cus­tomer with 'con­sign­ment' stock that would on­ly be paid for when sold by the DR cus­tomer, EIL cre­at­ed com­pet­i­tive ad­van­tage at time when the glob­al re­ces­sion had put un­cer­tain­ty in the mind of the DR cus­tomer." Kublals­ingh gave ad­di­tion­al ad­van­tages of this mod­el, say­ing it has "es­tab­lished an aware­ness of EIL's brand" in the DR. "By hav­ing EIL's 'free' wires and ca­bles in their ware­hous­es, EIL re­moved the risk in­volved in the DR's cus­tomer shift to a new sup­pli­er. The mod­el al­so lever­aged EIL's ad­van­tage of hav­ing low­er cost of fi­nanc­ing from T&T as com­pared to DR cus­tomer's cost."

Ac­qui­si­tions and in­vest­ments

How and what did they do to de­vel­op growth?

Kublals­ingh gave an ac­count of the ori­gin of the busi­ness and where it has reached. In 1982, Dave Ramkissoon start­ed the busi­ness with a $10,000 in­vest­ment. In 1987, his com­pa­ny Elec­tri­cal Dis­trib­u­tors Ltd (EDL) ac­quired the ca­ble man­u­fac­tur­er Trinidad Ca­bles Ltd (TCL) from the Ram Kir­palani Group of Com­pa­nies. The Trinidad Elec­tri­cal Man­u­fac­tur­ing Cor­po­ra­tion (TEM­CO) was then formed as an amal­ga­ma­tion of EDL and TCL. In 1997 TEM­CO Ltd ac­quired EIL from the Neal and Massy Group. In 2009 EIL ac­quired Agos Light­ing, a flu­o­res­cent light fix­ture man­u­fac­tur­er from Agos­ti­ni's Ltd. In 2011 EIL ac­quired Cen­tu­ry Es­lon Ltd, the PVC pipe, tank and pack­ag­ing man­u­fac­tur­er. Re­al­is­ing that the lo­cal mar­ket was too small for the com­pa­ny, EIL took the risk to in­vest abroad.

"We de­vel­oped a strate­gic plan for the three-year pe­ri­od 2009-2012, based on mar­ket­ing, ac­qui­si­tions and op­er­a­tional ex­cel­lence was the strate­gic key for us. What type of com­pa­nies were we run­ning? We took our strate­gic plan and in­crease on rev­enue through mar­ket­ing and through ac­qui­si­tions, we drilled down on ways of get­ting these mar­kets." "The sec­ond pil­lar has to do with in­vest­ment over the years in sig­nif­i­cant­ly acute ar­eas. We re­alised the lo­cal mar­ket could not sus­tain us in the medi­um- and long-term and that we had to take our prod­ucts out there. How did we take the prod­ucts in­to the in­ter­na­tion­al mar­ket? So over the last ten years, we spent $80 mil­lion. Those were times when peo­ple were hold­ing back."

The $80 mil­lion in in­vest­ment from 2000-2011 re­sult­ed in in­creased plant ca­pac­i­ty, high­er qual­i­ty prod­ucts, low­er unit costs of pro­duc­tion, new­er prod­uct de­vel­op­ment and im­proved cus­tomer de­liv­ery.

He said that more than $5 mil­lion have been spent in help­ing EIL get ac­cred­it­ed with in­ter­na­tion­al qual­i­ty cer­ti­fi­ca­tions like UL, British Ap­provals Ser­vice for Ca­bles (Basec), KE­MA, ISO 9000 and HSE Sys­tems. Kublals­ingh gave re­sults of some ac­qui­si­tions. Speak­ing about Agos Man­u­fac­tur­ing and the ac­qui­si­tion in 2009, he said it re­sult­ed in flu­o­res­cent light­ing fix­tures that were added to the range of prod­ucts. There was al­so an in­creased pres­ence in the US mar­ket with EIL ship­ping 15 con­tain­ers month­ly. The ac­qui­si­tion of Cen­tu­ry Es­lon in 2011 re­sult­ed in added PVC pipes, new dis­tri­b­u­tion chan­nels in the Caribbean and added 15 per cent to the rev­enue base.

Hu­man re­sources

Kublals­ingh at­trib­uted the com­pa­ny's suc­cess to how it utilis­es its hu­man re­sources. One of its strate­gies for growth was to hire smart peo­ple and the best tal­ent. "We looked at our gov­er­nance mod­el and, as a pri­vate sec­tor com­pa­ny, we strate­gi­cal­ly went out and brought in on our board of di­rec­tors peo­ple who were smarter than us and who had much more ex­pe­ri­ence than us. We brought in di­rec­tors who were able to add tremen­dous val­ue to our or­gan­i­sa­tion. "If we want­ed to grow and get in­to in­ter­na­tion­al mar­kets, if we want­ed to take a lo­cal man­u­fac­tur­ing plant and take it to the rest of the world, we have to take the best peo­ple and we strate­gi­cal­ly went about get­ting the best peo­ple who can take us for­ward. It is about how we build a com­pet­i­tive or­gan­i­sa­tion."