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The spice king

Published by Forbes on 1998-07-27

THE EAST COAST of South Africa has been known for its spice trade for well over a century, but it took Durban's Chimanlal K. Haribhai to create a major company in the business. In many ways Haribhai, a scrappy man of 71 and a descendant of immigrants from India, is typical of a new breed of businesspeople who are rising in the new South Africa.

Haribhai's Spice Emporium, occupying a full block in downtown Durban, offers a dazzling assortment of condiments, sweetmeats, utensils, nuts, fruits, juices and grains. The store is always crowded because the spices it stocks are important in the diets of both the black and Indian communities. But the store is only the most visible part of the Haribhai enterprises, which grossed 45 million rand, the equivalent of $ 7.7 million, last year -- big money in the still small South African economy. He also supplies spices and rice to wholesale customers all over Africa and in Europe -- and to a small but growing extent in the U.S.

His father, Khetsi Haribhai, ran a small provisions store in a predominantly Indian neighborhood in Durban, the city where Mohandas K. Gandhi gained fame early in this century for launching his nonviolent protests against racial discrimination. At 14, Chimanlal had to leave school because his father needed someone who could read and write English to help him sort out bills and supervise inventories. During the day Haribhai kept the books; at night he studied accounting and typing at a local technical school. "My father had only three lines -- potatoes, onions and dried beans," Haribhai told FORBES. "How could you grow a business with just three lines? I felt we could do better, so I advised my father to expand his inventory -- after all, we Indians can't live without spices for our cooking."

The young Haribhai learned the business under difficult conditions amidst South Africa's political turmoil. In 1950 the newly independent government of India -- whence Haribhai imported his spices -- imposed trade sanctions against the apartheid regime of South Africa. Haribhai, barely out of his teens, worked out deals whereby suppliers in Belgium, Holland and Turkey would import Indian spices and reexport them to South Africa. Eventually Haribhai found out that he could get better deals from spice suppliers in Singapore and Sri Lanka, and expanded his sources to include Australia, Pakistan and Thailand, from which he imported rice and pulses. Because he was not white, there were limits to how much his enterprise could grow in the apartheid era. Haribhai was handicapped in two ways: limited access to credit at home, and sanctions against South Africa from abroad.

In 1994 South Africa -- its population of 43 million dominated by a black majority -- held its first nonracially based election, and Nelson R. Mandela became the country's first black president. Because many white landlords in downtown Durban were selling off property in "distress sales," Haribhai was able to acquire real estate at dirt-cheap prices, enabling him to expand his warehouse and processing facilities.

At the same time, new business opportunities began flooding in with the lifting of trade sanctions against South Africa. Thus, Haribhai was now able to import almonds from California, lentils and chick peas from Turkey, tea from Kenya and India, aniseed from Holland, cashews from Indonesia, dates from Saudi Arabia, coriander from Egypt, pistachios and cumin from Iran and pulses from Australia. Remembering the bad old days, Haribhai says: "I never thought that I would see the day when I simply would have to turn away suppliers!"

To assure succession, he recently persuaded his daughter Chandrika, 44, to join the business, and she and her husband, Vinod Harie, help run the retain end of the operation. (Haribhai's four other children are physicians.)

Chandrika has plans to start a kitchen to demonstrate Indian cuisine and to franchise the Spice Emporium across Africa and possibly Europe. Haribhai himself is increasing his role as a middleman in supplying rice and other provisions to armed forces across Africa. The popularity of Indian cuisine all over the world -- especially in the U.S. -- has meant the opening up of dramatic new possibilities for Haribhai.

It is a safe bet that business will go far as African development speeds up. "I owe my success to a deep and abiding belief in capitalism," Haribhai says. "And that means, above all, serving the customer honestly, no matter what the politics of the times. If I've succeeded, it's because I've done business the old-fashioned way -- I've always kept my customer first."

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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