India Gold Fish Leather
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INDIA GOLD FISH LEATHER, LTD.1  “You’re writing cases about India?  Well, have I got one for you!  A classic, for sure!  Here’s my card;  let me buy you a beer.  Hey, give us two beers here.”  With this introduction, Mr. Bob Roberts, president director of India Gold Fish Leather, Ltd., settled in to tell his story one night in late October 2013 in Goa.  “Well my company is in the fish skin leather business.  You know what that is, I suppose?”  “No, not only do I not know about the fish skin leather business, I’ve never even heard about it, and frankly, I don’t see why I should want to know.  How can you make leather out of fish skins?” replied the casewriter, somewhat taken aback.  “Here.  Let me show you.  Look at these.  Beautiful aren’t they?  We’ve got them in all sizes and shapes, all colors and designs.  They almost have the tensile strength of rawhide and their deformation is much lower.  Nike here tested this one last week.  They were amazed.  They couldn’t believe their own instruments.  Look, this one is carp;  this one is perch;  this one is grouper.  Terrific aren’t they?  Don’t sniff them like that;  you can’t smell fish on them.”  “We’ve shown them in fashion shows allover the world.  Look at these pictures:  Rome, New Zealand—that dress won first prize with those fish leather insets—Tokyo, Hong Kong, everywhere.  That’s all our stuff.  Soon we’ll be exporting all over.  That’s what the case is all about.”  “Wait a minute,” interjected the suddenly enthusiastic casewriter.  “Fish skins are an agricultural product—well kind of, anyway—and you’re upgrading them and plan to export them.  Right?  I’m supposed to be writing a case about upgrading agricultural products for export.  Maybe I’d better hear your story.  How about over there, out of the crowd?”  “That’s what I’ve been trying to tell you,” said Bob.  And off he went with his story:  After 1 graduated from the University of Nebraska in business administration, 1 went into finance and banking.  About 15 years ago I joined up with the North American Bank—a good bank then, lots of training;  that’s where I had a lot of cases, in their training courses.  So I know about cases.  Anyway, in 2007/2008 the bank sent me over to India as vice president, commercial lending.  Good job;  lots of responsibility;  met a lot of important people;  became familiar with how business is done here.  Well, I liked it here:  nice people, warm climate, good beaches, and good business opportunities.  So, when the bank got into a lot of trouble in 2010, they wanted me to come home.  But for what?  People were getting                          1 This case was prepared by Professor Donald J. Lecraw.  The country and the financial and cost figures have been disguised.  2 fired all over the place.  So I stayed on here.  Did a little bit of this, a little bit of that— mostly financial consulting for the people I’d met through the bank.  I bought a house on the beach here in Goa, not much of a house, but comfortable.  Good life, but not too much money.  So a year or so ago, I got talking with an Australian friend of mine named John on the beach.  I’d known John around town—nice guy and very concerned about the environment.  Well, he was all excited about fish skins and making them into leather.  All I knew about fish was you ate them—and the fish cannery across the bay from my house made an awful smell.  Well, it was that factory that had gotten John all excited.  It was just throwing its fish skins away with all the rest of the junk inside the fish or grinding them up into fish meal.  That’s why the place smelled so bad.  John wanted to take the skins and make them into leather.  He was wild about the idea;  he said it was a natural;  everyone would love it:  save endangered species, reduce pollution, promote exports.  How could it miss?  At least that’s what John was thinking.
Now they’ve been making fish skin leather for a long time—centuries really.  But it’s all been from exotic fish:  shark skin, eel skin, sting ray skin.  Ever seen a briefcase made from a sting ray?  Prettiest thing you ever saw and very expensive.  The Japanese are crazy about them—lasts forever.  They use sting ray skin for samurai vests that can even stop a bullet—so they say;  never tried it myself, you know.  Anyway, about five years ago they figured out how to make leather out of regular fish, fishy fish, like what you eat.  Call them table fish.  See, look at all those kinds of fish in the picture.  We can make leather from them all.  Anyway, I thought, why not give it a try?  What’s a year here or there if the opportunity seems worth it?  So John and I formed a partnership.  Then I asked an Indian friend, Anil, he’s very wealthy, to register a company for us in his name.  Since it was 100 percent domestically owned, there were no problems from the board of investment.  My friend Anil didn’t put any money into it.  Not much to put in, anyway.  We rent or contract out almost everything.  I know Anil won’t try to cheat me.  He borrowed millions of dollars at the bank when I was there—that’s how I met him—and always paid it back.  On time, too.  And John and I didn’t put big money into the company, about $50,000 or so in total—and that’s all we’ve got in the company so far—plus one year of my life;  John’s life, too.  We have a few chemicals and some tanned fish skins lying around;  that’s about it.  So we went to this company in New Zealand to get the technology.  “No way!  For what?”  That’s what they told us.  We worked with some chemical companies and figured out how to do it in about three months.  We buy the fish skins from the processing plant for almost nothing.  The only expensive part is the presser and we contract that out to a tannery.  See, that’s a picture of our office.  That’s me, my friend, my secretary, and the billing clerk.  See that name on the building?  I consult for them, so we get the office free.  That’s the factory there in that building.  We arranged another deal on that.  There’s a leather bag and belt company next door and they do any finished goods we need, like  3 wallets, executive diaries, that sort of thing.  Well, we’ve had a lot of interest lately.  All those trade fairs we’ve shown our products at, you know.  The Australians are interested.  They want to take our fish leather and produce shoes and stuff like that in Australia.  But when they saw our labor costs, they changed their minds.  Now maybe they’ll invest here to produce shoes and buy our leather.  Same thing with the Japanese.  We’ve sent samples all over the world—200 square feet here;  400 square feet there.  All in all, maybe 8,000 square feet.  How much do we sell it for?  An average of $4.50 a square foot.  Beautiful isn’t it?  Look at these pictures.  Would you believe it?