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CanadExport is the official source of news and advice on trade and investment opportunities around the world, for Canadian entrepreneurs who want to compete, partner and prosper in the global marketplace.						CanadExport Vol. 25, No. 2 (PDF)

Trade Secrets

February 2, 2007

Shampoo venture brings jobs, hope to Afghanistan

For most small Canadian companies, the thought of doing business in war-torn Afghanistan may seem incongruous, but not for Druide International Inc. The Montreal-based company has teamed up with an Afghan business to open a shampoo factory in Kabul. The project may be small, but its early success has many hoping it is a sign of things to come.

The Canadian-Afghan shampoo joint venture has hired Afghan war widows, most of whom are the sole income earners in their families. (Credit: Interpôles)

Opened last November, the shampoo manufacturing facility is a joint venture between Afghan businessman Waheed Daqeeq and Druide, a company that specializes in environmentally friendly skin and hair products.

The venture was facilitated by Paul Desjarlais of Interpôles, a Montreal-based consulting firm that assists Canadian companies in mounting joint projects with foreign companies, largely in Asia.

"I was approached by an Afghan-Canadian who invited me to travel to Kabul to look for joint-venture opportunities. As an international development advisor, I had worked in Indonesia building affordable houses but after meeting Waheed Daqeeq, the first project to take shape was a shampoo factory instead."

When asked how Desjarlais managed to help set up a factory in a country at war, it's clear he saw opportunity where many would not have.

David Sproule, Canada's Ambassador to Afghanistan (fourth from left), inaugurates the first local shampoo factory in Afghanistan.

Where there's a market, there's a way

"The entire country needs to be rebuilt. In 2002, there were virtually no production plants. Even today, nearly all of Afghanistan's consumer goods like soaps, clothing, shoes, candy, soft drinks and other everyday items, are imported from neighbouring countries. Even though a large portion of Afghans are poor, they are still consumers."

Desjarlais says that, to his knowledge, all shampoo in Afghanistan is currently imported from Iran, Pakistan and Turkey, which makes the products more expensive.

"Because of the large water content in shampoo, this amounts to the transport of bottled water across borders, which greatly inflates prices in Afghanistan. So we think that prices of locally produced shampoo will be highly competitive," he says.

Locally produced products also mean jobs for Afghans. The facility, which produces a brand of shampoo called Florance, currently employs twelve widowed Afghan women and four men. Eventually, the factory aims to employ some 40 women.

"We had asked our Afghan partner at the outset if he would agree to the employees being women, preferably war widows," says Desjarlais. "He said yes and kept his word even though he lives in a very traditional setting. These women live for the most part in the neighbourhood, they have children and they are the sole income earners in their family."

Desjarlais adds that while most of the women work in bottling, the laboratory is run by a female chemist and the accounting is also done by a woman.

The factory mixes shampoo ingredients based on quality-controlled procedures and produces 4,000 units per day in recyclable plastic bottles for distribution across Afghanistan.

Desjarlais says that the challenges run deep.

"The country's infrastructure is practically non-existent after all these years of war, so raw materials have to be imported. Also, the literacy rate is very low, so training needs are greater."

But in this area, the Government of Canada has a role to play.

"The Canadian International Development Agency's (CIDA) Industrial Cooperation Program contributed to the viability study that we first did," says Desjarlais. "Then, during set-up, it participated in the training, coaching and technical transfer phase. It goes without saying that this help was highly appreciated given the difficulties we feared."

"I am delighted that Druide, with the assistance Interpôles and the Government of Canada, has opened its doors to the emerging Afghan market," says David Sproule, Canadian Ambassador to Afghanistan. "This venture supports many of the key objectives which Canada is working toward in Afghanistan and is emblematic of the type of contribution the Canadian private sector can make here."

Desjarlais is also hopeful about the country's prospects and advises other Canadian companies looking to do business in Afghanistan to do it quickly.

"At the moment, there is a lot of opportunity in Afghanistan, it is still easy to launch a business and competition is low."

For more information, contact:
Nathan Naidoo
Canadian Embassy in Kabul
and
Paul Desjarlais
Interpôles
Tel.: (514) 277-2095
Website: www.interpoles.net

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