Trade Talk with Umang Bagaria/
The importance of organic growth and the key to success in business

Tell a little about yourself Umang. What initially attracted you to the industry?

I came to Australia back in 2003, where I did my Master's in finance. I started out in the finance industry, in investment banking, where I stayed for three and a half years before deciding to return back home. I’m from Nepal originally and my parents and the family business are all there. Our family business focuses on agricultural derivative products, such as processing pulses and crushing soybeans – we're the largest feed millers in Nepal. So, I looked to the family business as a starting point and that's where I stayed for six years, getting to grips with the business and learning the ropes of agriculture, logistics, and operations. While I was there, I did everything from working on the factory floor to sales. 

Having lived in Australia, I knew that it was a good origination country, and I saw that there was a big gap in the Nepal import market: no one was exporting to the market from the origin. There were more traders and middlemen. So, to fill that gap, I decided to move back to Australia in 2014 and started exporting as a broker, using some of the companies here to establish connections. I did that for about a year and a half, and then I realized that I wanted to work as a principal rather than a broker. So I got in touch with two childhood friends, and we started Mandala trading in 2015.

What was the goal of the company back then?

The purpose of Mandala was to cater to the Nepal market, understanding it was a landlocked country and very dependent on imports of staple foods. So, Nepal was the market we started out targeting, specifically with canola seed as a staple, stable product, and that became the backbone of our business. With that, word spread around. More and more people in the industry in Nepal wanted our products.

Australia has a lot to offer, particularly pulses, cereal and oilseeds, and, being in the origin country, I learned all about how, where and when to buy. Slowly, we started gaining market share in Nepal, which gave us the confidence to move into other countries. We also realized that having one origin country was not good enough because the weather cycle and agricultural patterns are different in different countries and, if we had stayed with Australia, we'd have been stuck with one season. So, we focused on diversification.

Having established yourself in Australia, where did Mandala target next?

We ventured into Canada, established a company there and started exporting, which worked very well to our advantage because Australia was in a severe drought for two years. Being able to use Canada as a base allowed us to keep our supplies intact as both countries have similar products to offer. With that, our destination countries increased. We went to India, Bangladesh, Pakistan, Sri Lanka and the Middle East. We slowly started expanding into the South East Asian market to China, Thailand, Vietnam and the Philippines, which really expanded our buying and selling base, and our team internally grew too. We grew from three directors to 15 people and we created a back office in Nepal as our base. 

We're a young team, and have the energy to drive things forward. We like automation and systems and use that in the day-to-day management of our sales and documentation, which affects how we move them and how we interact with our people and stakeholders.

You mentioned that canola is the backbone of your company. Can you tell me a bit more about that and the other products you offer?

Yes, one of our staple products is canola seed, which we procure from Australia, Canada, Ukraine, and Russia. It's a year-round product that goes mainly to millers. Around 40% of our sales come from canola seeds. We also deal with pulses, too and this includes lentils (red and green), chickpeas (desi and kabuli), and peas (green and yellow). In recent years, we've also expanded into sorghum, barley, wheat and oats.

Can you tell me a bit about your links with the GPC and your sponsorship of Pulses 2022?

We started sponsoring the GPC conventions two years before the pandemic started, the first being in Sri Lanka, and the second in Rio de Janeiro. The response we received from the industry was very encouraging. It was great for a number of reasons: there were lots of people who wanted to meet and talk to us, it helped us to expand our buyer base, and it also helped us to source products out of South America and other countries. So, being linked with the GPC was a great way to gain exposure and gain both knowledge and confidence from partners. It also helped us to build our brand, with people seeing us as there to stay and serious about the job. 

Looking ahead, what's on the roadmap for Mandala?

It's important to grow. With every year, we've been growing well and that's where the excitement lies. We've grown very organically, too, at a pace that can be managed. We've chosen our buyers and destinations very carefully. The next bit of growth will come from forward and backward integration. We will be looking at other ways of using our agriproducts to value add. We've got a few projects in mind that we'd like to execute in the next few years. Covid has delayed us, but we’re back on track again.

It sounds like Covid-19 put the brakes on some of the company's plans. Can you tell me a bit about how you dealt with the challenges brought by the pandemic and how things are looking now?

The biggest challenge Covid-19 introduced for the business was related to logistics. Everyone struggled with that, whether it was exports or imports, so managing expectations around that and the financial aspect was important. Banks took a while to understand the situation, and working from home was challenging, too – we had to build systems and processes to deal with those issues. At first, communication wasn't great, and cash flow management was challenging. Banks were closed; people were not working, documents were not moving, flights weren't taking off, goods were not reaching their destination countries on time. However, I feel we managed to find ways around these issues early on. Of course, like everyone, we're still facing challenges, but we can handle them better now.

You mentioned value-adding. Can you tell me a bit more about your plans relating to that? It's definitely an area that's exploding in Australia at the moment, especially with regards to pulses.

Value addition can come in various forms. One of the projects we're looking into is a packing and splitting processing plant for pulses and other cereals. That's a backwards integration that would give us closer access to the farmer level, more secure supplies and value-add to sell more into the domestic market. This will be great for buyers overseas and give them an added service from Australia.

Mandala Trading is ultimately a young company looking to grow organically with the right partners. We're not a traditional company, and we're looking to incorporate more people into the business, not just as a buyer or seller but become more of a partnership-based business. We're looking forward to building those partnerships.