“It was definitely a bad year to start any business, but there was no way to know that then,” said Sunny Khatnani, Head of Divico, the distribution company that marks its quarter-century existence this year. It was not Divico, however, that Sunny, as he is affectionately known, was referring to. It was his first business – a jewellery store on Front Street.
The year was 1995 – the year that changed everything. Sunny had recently returned home to St. Maarten after completing his studies in the United States, and his parents were eager to set him up with a business. The jewellery store was outfitted, ready for merchandise and to open its doors to the public. The month was September and five days in Hurricane Luis hit the island causing widespread devastation.
Sunny described this forage into business as “a difficult start.” The tourism market changed drastically by the time the island had some post-hurricane recovery. He pushed through with the jewellery business until 1999, putting energy into it, although he was eager for a new challenge.
Retail was just not his thing. “It was not challenging enough for me and I needed something new,” he said.
“I was not looking forward to going to work on most days. I knew I had to, so I did,” said Sunny. “I realized how bad it was on a drive to work one day with my Dad. All I could think about was, ‘I hope there’s no cruise ship in port.’ I know that was crazy. Cruise ships were our business. It was how we made a living. Worse yet, this was my own business and I was thinking like this.”
The hardest part for Sunny was not making up his mind about retail. It was having the conversation with his parents about leaving the business they started for him. “It was not the culturally-acceptable thing to do. It took a lot of guts,” said the businessman of Sindhi heritage.
Sunny had not only focused his energies on jewellery upon returning to St. Maarten after college, he had also started up a small telecommunications company providing services to cater to the needs of cruise ship passengers. Though this was a business he loved, it was an uphill battle for him. The roadblocks he faced were primarily due to acquiring licences and permits to expand services.
Amidst that struggle, an unexpected opportunity came calling in 2006 via his uncle Danny Ramchandani. Divico, headed by a former Nestle executive, was for sale. “It was a wholesale distributor business, a long way from what I was doing in telecom, and even further from retail jewellery. I told my uncle even if I wanted to I would be his competitor. He didn’t mind. I was still not sure it was for me,” said Sunny.
To get a feel for the business, he would later transform into Divico, Sunny approached the owner and offered to work for free for three months. “I started out in the warehouse and immediately started changing and reorganizing things from shelving to placement of products. I enjoy fixing things. I knew this was the place for me within three to four weeks, and here we are 10 years later,” he said.
The celebration of the 25th anniversary pays homage to the continuing distribution business. Sunny acquired the company with a team of 16. Today, the team has grown vastly and spans to the Philippines, where Divico’s back office services are rendered, from accounting to placement of large orders. With the local and Philippines’ operations, Divico’s staff now number some 60 employees.
Divico has faced tremendous human resources issues over the years. This is one of the reasons the company chose to do its back office operations overseas. Sunny explained the permitting process to acquire needed staff is lengthy and drawn out. “Investors want to invest, but it is difficult to operate with the laws and the existing structure. This situation is why investors are shying away from St. Maarten. Everything is just a headache,” he said.
The distribution company had its warehouse in the Cole Bay Industrial Site. Three small warehouses were across the road from each other. Carting products from one warehouse to the next became a nightmare, as the number of brands grew under the Divico umbrella.
“Just imagine it – we were moving products across a busy street. Something had to be done and soon,” Sunny said, explaining how he started to look for a more suitable location. He landed on Divico’s current location on Union Road in Cole Bay. The former supermarket building gave Divico the space it needed to continue to grow and expand. Today, after seven years in the former Lido Food Centre building, more space is needed, but the company is making do for now, Sunny said.
The versatile businessman said he wanted to do more innovative things with the distribution business. “Perhaps it’s the seven-year itch. I am combating it by seeking new avenues of business, expanding with new categories and ideas. This is how we recently became the distributor for Intermarché, one of France’s biggest supermarket chains,” he said.
Divico is also sprouting a new branch by moving into the distribution of prescription and over-the-counter pharmaceuticals and liquor. “We are working on getting more brands and brands are also coming to us. We get about two brands a week,” Sunny said.
Past and present
Sunny is a long way from what his childhood aspiration were. “I wanted to be a pilot like all kids do,” he said. When he headed off to Boston University he pursued studies in business administration and electrical engineering. Upon graduation he decided to return home to St. Maarten and create opportunities for himself here.
In 1999, Sunny married Nisha. She first joined him in the jewellery business before moving on to Divico. For almost two years now, she heads up Divico’s cash and carry section. It is always challenging to work with a spouse, said Sunny. “But, we are in different departments. That’s keep it interesting and minimizes challenges,” he said.
Today, Sunny is happy with the direction his life has taken. His only drawback is not fully understanding what he was getting into at the very start. “I needed an exit strategy. Anyone who gets into business needs one. I just started to work and grow my company. It is difficult to sell a business like this one in the Caribbean. Had I known the challenges I may have kept the business small,” he said.