Namit Varma, CEO of Sogo, talks about the plastics industry and about onshoring traditionally off-shored manufacturing.
Please excuse any typos in this hasty transcript.
Jay Curry: And we’re back. Hello, Texas. Welcome to Texas Business Radio. Were having a good time today, and we’ve got a great special guest here. We’re going to be talking about plastics. I have in the studio with me George Walton. George, I think you have a background around that.
George Walton: I do. Most people in the audience know me as an investment banker, but the reality is I grew up in a family business that was plastic extrusion oriented. So what we did was we manufactured plastic pipe. So I’m very excited today to be talking to an owner of a plastic business. Today we’re going to be talking to Namit Varma. Did I pronounce it correctly?
Namit Varma: Absolutely.
Jay Curry: Right on.
George Walton: He is known as Mr. Sogo, and I love that. So you want to explain to us how you got that name and that title?
Namit Varma: When we first started, it’s actually the business was begun by my father, and when we first started out, I was really helping him with the sales. And since I was the one who went to see each store manager, a lot of people had trouble pronouncing my name, so they just called me Mr. Sogo.
George Walton: I love it.
Jay Curry: We’re delighted to have you in here. So let’s start with what is Sogo, what are you doing, who are you doing it for? Tell us all about that.
Namit Varma: Okay, so Sogo is a plastic manufacturing company. We primarily are focused in injection molding, and since we cater to the grocery industry, we have products that range from plastic, foam, and aluminum. But we actually just manufacture the plastics. And we used to import the plastics from China, India, and various parts of the world. And few years ago, we realized we can actually manufacture them to compete with those markets, and that’s the direction we went. And that’s led to some of the products you see in front of you today.
Jay Curry: So you almost want to shout that out, made in America. We’re actually bringing it back home.
Namit Varma: Yes, absolutely. We’re very excited for that. We’re in a good position in plastics, especially in plastics to be competing on a global scale and really bring a lot of export business back to the United States.
Jay Curry: Namit, tell us how that can happen. How can we … For 20, 30 years, we’ve seen things go offshore because of the cost of people actually. How is it it’s beginning to come back in? You called it what? Inshore?
Namit Varma: Reshore.
George Walton: Reshore.
Jay Curry: Reshored. I like it.
Namit Varma: Reshoring, yes. And a little bit like what I had mentioned earlier was we tested some products that in our grocery industry did very well, and we started to make our own versions of those products and bringing them back here. Now, there’s products that require a lot of assembly, and the one thing people always complain about our industry is, “The labor rates, how are we going to compete internationally with the labor rates?” Well, the object of creating more jobs is to be competitive. And what we’ve done is invest a little bit in automation and look for people who have availability in production to make simple products like the ones you see and front of you today. We call them everyday plastics. These are products you use in your everyday home.
You’ve got trays, bowls, pitchers. Sometimes you use them and reuse them, and sometimes you dispose of them. But the thing in America, we have as an advantage on our side is not only the commodity price, but quality. People around the world perceive us as the highest quality in many situations. So when you see our plastic on the shelf in other countries, yeah, we can compete on price, but they usually sell it for more and people are willing to pay more for that.
Jay Curry: Well, that’s interesting. So there’s a lot of things that add up on this. We happen to be now the biggest oil gas company in the world, or country in the world. And this is made from oil, right?
Namit Varma: Yeah, well polypropylene.
Jay Curry: Yeah, so you no longer have to send the oil over to China, have them make something and send it back. That’s got to be a big advantage for you.
Namit Varma: It’s massive advantage, and especially in the state of Texas. We’ve got give plastic refineries coming up within the next three years, and our raw resin consumption is far below our production, or will be far below our production, to where not only will we export truck loads of resin to the rest of the world, but we’ll be making finished goods like the ones Sogo is currently making, and sending those around the world as well.
Jay Curry: So … Go ahead.
George Walton: In our conversation, you were discussing the kinds of things that gave you an advantage. You also talked about a basket of risk when people do business overseas. You want to talk about that a little bit?
Namit Varma: Yes. And in fact, that’s some of our selling points with our customers and our retailers is one of those basket of risks is design protection is a big one. So if you’re somebody going into manufacturing, you’ve got a unique product, when you go overseas, you can get all kinds of agreements signed. But I’ve seen many situations in which those agreements are violated and people don’t … There’s no accountability. Going back to the accountability factor, working with the US producer, working with somebody you can call on the phone and you can hold accountable to their product. And last thing is lead time. Typically, the business cycle of ordering any product from India or China is going to be about 90 to 120 days from the time you reach out to your supplier and figure it out. In that same amount of time, if you come to a company like us, we can do your tooling, bring the tooling here, and manufacture your product for you within 90 to 120 days in the United States.
Jay Curry: Great story. Love it. So how do you get your clients and are we talking about pretty much right now, in the stage that you’re at right now, they’re pretty much big companies, HEBs of the world, Krogers?
Namit Varma: Yes. We try to showcase ourselves at trade shows in the industry and make some connections, and a lot of it is through word of mouth. We’re blessed to be working with some brokers who used to work with large retailers, and so they guide us on the system that the retailers require. And we just want to bring a good quality product at a good price, and that’s usually how we earn their business.
Jay Curry: Okay. How do you decide what you’re going to make?
Namit Varma: Well, we take a look at what’s in the market today and what’s missing in terms of made in USA, and that’s our low hanging fruit to start. And that’s what gave birth to some of the product lines we have today, and once we start it, then we go into different assortments, different sizes, and really deepen the line to make it available for any type of retailer.
Jay Curry: Wow, plastic made in America. Who would have thought it? It’s all coming back, isn’t it?
Namit Varma: Yes, absolutely. And very strong.
Jay Curry: So if somebody wants to learn more about this, or look into your company, or just study and figure out how you’ve done this pretty miraculous change in reversing from importing to exporting, how would they go about doing that? How do they find you?
Namit Varma: I would say the best way to find is through our website, www.SogoINC.com. It give you a little idea of our services. We do from original design, original manufacturing, contract manufacturing, private label. We’ve got a very big array of services. And you can contact us directly through the website.
Jay Curry: Okay, so that’s www. S-O-G-O.
Namit Varma: G-O, yes.
Jay Curry: Just the way it sounds. So go.
Namit Varma: Yes. Yes. S-O-G-O-I-N-C.
Jay Curry: So there you go, folks, you go to Sogo.com. You can learn all about the process, all about the products, all about everything there is to be had.
Namit Varma: It’s actually SogoINC.
Jay Curry: I-N-C?
Namit Varma: Yes. SogoINC.com.
Jay Curry: Oh, I’m glad you cleared that out. But we’re going to put that on TexasBusinessRadio.com, folks. So check it out. But it is I-N-C.
Namit Varma: Yes.
Jay Curry: Not com. Sogo-
Namit Varma: Yes. INC.com
Jay Curry: Okay. Let’s get this clear for everybody. It is SogoINC.com?
Namit Varma: Yes, yes.
Jay Curry: All right. Go to Texas Business Radio. We’ll have it there. I’ve confused everybody listening. But we’ll have it there for you. Well, it’s been a real pleasure. This is a great story.
Namit Varma: Thank you so much.
Jay Curry: Thank you for coming in and joining us.
Namit Varma: Thank you. Thank you for having me.
Jay Curry: Okay. Folks, that pretty well wraps up this segment. We’re going to go pay some bills and we’re going to be right back. We’re going to have another great guest. But before we do that, let me remind you that everything we do is on TexasBusinessRadio.com. You can also communicate with us in 24 hour period on the phone at 844-814-8144. Call us anytime. Matt stays up all night trying to catch that. He promises me he’s going to get it. He’ll get the experts. We’ll get them on. We’ll get you the answer and we’ll get it on the air. That’s 844-814-8144. And of course, we monitor T-B-R, #TBR if you want to tweet, #TBR. But where you really want to go is Texas Business Radio where we have all of our guests, like Namit, and all of our hosts, like George, and all of our sponsors. It’s all there, folks. TexasBusinessRadio.com. That’s where you want to go. Well, we’re going to go pay some bills. Don’t go anywhere. We’ll be right back.
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Along with hosting “Texas Business Radio”, Jay is a Professional Certified Coach and Master Chair facilitating four Houston-based Vistage peer groups. In addition to being a best selling non-fiction author, the 2015 release of his award winning novel, Nixon and Dovey: the Legend Returns, adds novelist to his title. Jay holds a BS in Mathematics from Oklahoma State and an MS in Computer Science from Kansas State. You can learn more about Jay HERE.