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“Mark and Sue: entrepreneurs not marking time” (FT 18/2/2017)

20/02/2017

Mark and Sue: entrepreneurs not marking time” (FT 18/2/2017)

Mark Halabe is a multi-millionaire.

For those who know the couple well, the quiet Mark, when beside his exuberant partner, may even appear to be a mouse.

But Mark is not a mouse, whatever his gentle exterior and character may suggest to the less discerning.

Beneath his calmness is a driven entrepreneur who in partnership with his wife, Sue, did what protected businesses in Fiji rarely ever do.

Mark weaned his business (Mark One Apparel) off the protectionist advantages offered by SPARTECA, to compete successfully with the garment manufacturing and exporting giants from China, India, Brazil, all countries which pay wages far lower than that paid in Fiji.

Mark One pays far better wages than the average garments wages in Fiji, with his employees enjoying other benefits not offered by other employers, a lesson for all employers in Fiji.

Despite his wealth, children’s schooling decisions by Mark and Sue were not those typical of the wealthy and elites in Fiji.

Mark is generous with his commercially valuable time, with International Secondary School enjoying a quality assistance that their money cannot buy.

Unlike many a millionaire, he is a friend to those in need, without fear or favour.

For budding Fiji entrepreneurs and employers, there are worse models around than Mark and Sue Halabe.

A silver spoon?

Fatefully born in Lakemba (Sydney) next to a house named Suva, Mark may have been destined to end up in Fiji.

We are often scornful of successful people who come from wealthy or privileged backgrounds, labelling them as “born with a silver spoon in the mouths”.

Given his rich Lebanese family’s business background, Mark may even be accused of that.

With his father running a menswear retailing business in Cronulla (Sydney) and his four uncles owning a shirt manufacturing company in Lakemba, Mark’s future involvement in their ventures appeared natural, and he did spend much his off-school time there, invaluable for his future career.

But at age 19, like many questioning youth, he rebelled and joined Australia’s Military Collage for future officers at Duntroon.  As part of his military training, he began a degree in Science, until he became seriously ill and was medically discharged.

His uncles made him “an offer he could not refuse”: study anywhere in the world, in any subject. but return and work in the business.

Wow.  That was a big silver spoon indeed!

But don’t we in Fiji know of lots of rich kids who spit the silver spoon right out in order to  live a life of luxury, enjoying and dissipating their father’s money (baap ke paisa is “easy come and easy go”).

But not Mark.

He did a Bachelors Degree in Science in Textiles at what is now the Montford University in Leicester, UK. On the way he met Sue (no doubt another interesting story which only Sue can tell).

When he returned to Australia he was made Factory Manager of three hundred and fifty staff.

Mark was made for life, you might have thought?  But no.

The setbacks

A lesson to many in Fiji who think that a university degree is the answer to a successful career, Mark became disenchanted that his Bachelor’s degree had little of relevance to managing a factory.

He then did a Masters degree in Industrial Science, of far greater relevance and value to what he wanted to do in life- another lesson to the massive number of graduates being churned out by our university factories to be ever evolving from their first degrees, as their needs changed over time.

Then in 1983 the family-owned factory was completely destroyed by fire, and Mark became unemployed.

In a typical example of what economists call the process of “vertical integration”, Mark approached a major customer who respected Mark enough to join him in starting a new company using the unemployed staff. Mark was an employer who cared about his employees as well as himself.

The fledgling business was successful and within a few years purchased another existing business and merged the operations into a more efficient operation (“horizontal integration”).

From one protection to another

At that time, the Textile Clothing and Footwear (TCF) Industry in Australia employed over three hundred thousand workers, but survived only because of 60% tariffs against cheap imports from low wage countries like China and India.

And the writing was on the wall.

Pressures from the WTO and Australian government policy of gradually reducing all protection from local industries, saw the collapse of Mark’s factory (as well as many other industries like car manufacturing).

Mark began to look around for new locations for his entrepreneurship: China, Indonesia, Sri Lanka and Vietnam were all considered.

Fortuitously, soon after the 1987 Rabuka coup, a friend suggested he look at the successful Fijian company, Ranjit Garments.

It is ironic that Mark One began his garment operations in Fiji largely because of tax holiday incentives offered by the Interim Fiji Government following the coup, combined with Australia reducing duty on imports from the Pacific countries under the SPARTECA agreement.

Mark One Apparel did very well for two decades, in the process generating thousands of jobs.

As importantly for Fiji’s objectives of gender equality in employment, ninety percent of these jobs were for women who had no other income earning opportunities, who learned valuable skills in the process, using some of the most technically advanced machines available in the world.

The company earned foreign exchange for Fiji, and purchased a whole range of other Fiji goods and services in their manufacturing and exporting business, spreading the “multiplier effects”.

Adaptation to survive

But doom loomed again.

Just as in Australia in the 1980s, duty concessions under SPARTECA began to be reduced by the Australian Government as Australia entered into free trade agreements with China and other countries.

Their exports came into Australia at incredibly and sometimes ridiculously low prices, hurting the Fiji garment exports to Australia.

Employment in Fiji’s garment industry collapsed from above 20 thousand to around 5 thousand.

To survive, Mark One had to adapt and their key strategy was to find niche products that its international competitors could not match in “price, service or logistics”.

While this textbook strategy may be easy for MBA lecturers to preach, it is easier said than done, especially in a small South Pacific Island economy which is geographically far from its input suppliers and export markets, with costly and infrequent shipping links, with workers who are not used to being disciplined and hard-working as in China, India or Bangladesh, and other logistical disadvantages.

Mark One, like all exporters from Fiji, also had to deal with an expensive air-freight option from an airline whose plane purchasing decisions focused on “bums on seats” even if it wrecked their cargo capacity to allow exporters to supply overseas clients in a cost effective and timely manner.

To add to all that was the sovereign risk posed by Fiji’s coup culture, begun in 1987, but repeated in 2000, 2006 and 2009, when actual trade bans or expectations of trade bans played havoc with buyers’ ease of mind about delivery of stock on time.

Nevertheless, Mark One survived and indeed prospered.

Today he has faithful clients from the Australian sports apparel industry, with ten NRL and five AFL clubs, with more expected this year.

Which Australian rugby club would not be comforted to know that their Lebanese Fiji manufacturer (with origins in Cronulla) was willing to hand-carry their orders to Australia to ensure that players did not run out with old jerseys?

Just treatment of workers

Many Fiji employers believe that the only way to counter competition locally or internationally is to squeeze their workers’ wages and benefits to the bone.

Some brutally oppose unions, using whatever dirty tactic available, including pressure on Government Ministers to not grant wage increases under the Wages Councils.

In contrast, Mark One is a unionised company which believes in collective bargaining.

More than that, Mark One believes in improving the lives of their workers at the workplace with better than OHS compliant factories and meal places, with Sue keeping her eagle eyes on them in the factory.

Mark and Sue Halabe also believe in improving their workers’ home lives, with savings schemes, medical checks, eyesight tests, financial assistance.

There is even an in-house day care for the children of their employees, thereby enabling mothers with young children to continue being employed and earning income.

Women’s organisations might want to note that garment manufacturers Mark and Sue Halabe are a positive force for the empowerment and gender equality of working mothers with young children, worthy of emulation by other employers.

I am sure there are others around as well and such companies need formal recognition.

Cooperation rather than conflict

Most Fiji companies believe that the Darwinian Law of the Jungle requires them to engage in vicious cut-throat competition with others in their industry.

Mark believes in working closely and cooperatively with other garment manufacturers, sharing resources and even customers when the need arises, to ensure greater flexibility and service for their clients.

Despite solar energy costing far more than FEA, Mark Halabe is making his contribution to the future of sustainable energy by investing in solar panels for his factory roof, supplying a significant 30% of their electricity needs, and powering his solar car!

Mark One is an industry leader and Mark is ever willing to speak in forums and share his experiences, a genuine inspiration to young business leaders in Fiji.

A humble couple and family

Mark is typically soft-spoken, usually seen with a wry smile on his face.

Sue, his partner for 42 years, is known by their friends to be a micro-manager, who believes in tightly controlling their factory, their thousands of workers, her “softie” husband, and their home.

Perhaps that is one secret behind the success of Mark One Apparel and all businesses in which the wives are the “power behind the throne”.

A reflection of their humble nature, Mark and Sue’s first three daughters were sent not to the elitist International School, but to Yat Sen, where the couple wanted their children to mix and have friends amongst local children, which they did.

Mark and Sue, despite their busy work schedule, always participated in PTA gatherings and fund raisings, not just with cash but also their labor.

One daughter with special needs was sent to International School, which thereby also enjoyed windfall benefits of Mark’s free specialist advice on a $25 million upgrade project.

Mark quietly endures personal disappointments, such as the significant reduction in the value of one of his large investment properties because local building codes may have been circumvented by someone who was allowed to plonk down a tall building  obstructing the beautiful views of Suva Harbour that were once enjoyed by Mark’s tenants.

Mark and Sue are not afraid to stand by their friends in need, despite the personal risks of doing so in a capricious Fiji.

Just rewards

Mark and Sue Halabe have amassed thirty years of good will from their own industry, from different governments, and from Fiji society.

Mark One has been twice winner of the Prime Ministers Exporter of the Year award and recognised in the Fiji Business Excellence awards.

In 2000, Mark was awarded Membership of the Order of Fiji for his services to Fiji.

Fiji is lucky indeed to have such decent, hard-working entrepreneurs and committed citizens like Mark and Sue Halabe, worthy models for other budding entrepreneurs.

 

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