Making It Big

  Ravi Jaipuria, who has started operations for Pepsi and KFC in east and west Africa, invited me to join him on one of his trips to the continent. Being a close friend and a sharp entrepreneur, he was the right person for me to travel with, to know what was really happening on the continent. I flew to Africa with him from Dubai in his private jet and spent a week touring Kenya, Tanzania, Mozambique and some other countries. I was very clear in my mind that Africa is no different from my own country, and if we could build a multinational from Nepal, then why not one out of Africa.

  On my return, I identified an investment banker who brought a very attractive deal to the table—Britannia in Uganda and the House of Manjees, a household name for biscuits in Kenya going back a hundred years. Both were run by a local family who were partners in the companies; their majority ownership was with the Libyan government. A similar situation had resulted when Gaddafi’s rule ended and a new political order emerged. There was a rush on the part of the new regime to sell the erstwhile investments of Gaddafi. We were successful in striking a deal after many months of protracted negotiations. We even posted our team in Africa to take over the ailing outfits and to turn them around. However, some elements in Libya as well as Africa did not allow that deal to happen as they did not want to let go of the hen that laid the golden eggs for their personal benefit. We decided to abandon those ventures.

  Meanwhile, on one of my visits to Africa, I met a leading businessman, Alykhan Karmali. I had met him as a FMCG player, but as destiny would have it, we landed up in a joint venture for starting a series of Zinc hotels in the East African countries. Our first project was at Kigali in Rwanda—Zinc City which is going to be opened in December 2015. We subsequently acquired sites in Kampala, where a project is under design and development.

  Our plans for a Wai Wai project in Africa, which had to be set aside when the Britannia deal was aborted, has also taken a new shape. The Kenyan government has invited us to set up a greenfield plant in Machakos, a new state under the new federal regime. We are now negotiating with another FMCG for an acquisition. Our partnership with a big Nigeria-based group for an FMCG company is also beginning to take shape.

  In our renewed vision for Taj under Taj Asia, we intend to open a Taj in Nigeria too. Things are moving very fast on the global front. Our team in Dubai is working day and night. At this rate, we are certain to create a serious presence in both East and West Africa in the next five years.

  PART IV: MY BUSINESS MANTRAS

  22

  The Mantras

  Ever since I entered the world of industrial enterprise, I have had to assume responsibilities I was not prepared for. I was neither prepared nor had enough education or experience when I started off, but I took each development in my life very seriously. This helped me see clearly where I stood and where I had to reach. My one resolve was to not just take charge of the family business when I was compelled to do so by circumstances, but to take it to new heights.

  Success is a relative concept. An ill-equipped club cannot produce a Maradona. That takes a good field and a government that understands football and is ready to promote the game. It also requires colleagues with sportsmanship and an audience that cheers, besides, of course, the skills and qualities of the player. Nobody can be the best by some fluke and retain that position by chance. I did not go to Harvard, MIT or Wharton. Banking on my own experience, I have, nevertheless, made decisions that even a Harvard professor would recoil from without several rounds of market surveys.

  Drawing from my own experience, I would like to list some of the qualities and skills that an entrepreneur should possess. However, I would like to clarify that though I am elaborating on what I consider as my business mantras, they are not a sure-fire way to success.

  High ambition

  Our society has always accorded negative connotations to the word ‘ambition’. This is the biggest obstacle in an entrepreneur’s path. The stature I have achieved now is the product of my high ambition and strong will. Ambition whets your appetite for success, and that hunger propels you ahead. From the time I stepped into my father’s shoes, I wanted to become bigger than the biggest business families in Nepal. All my plans and efforts were guided by the thought that there was no reason we could not compete with the big houses and ultimately overtake them.

  Even today, there are many businessmen in Kathmandu, contemporaries of my father, who are content with their old grocery shops. Sometimes they envy us, cursing their own feeble willpower. If you do not want to expand your business, establish an industrial group or a multinational organization, you would do well not to opt for it at all. Rara noodles dominated Nepal’s market when I launched Wai Wai in the country. Maggi from India also had a good hold in the market. Had the presence of these brands intimidated me, Wai Wai would have never happened, and the Chaudhary Group would never have achieved the heights it has today.

  Organization building

  Four decades back, the radius of our business extended to the corner of Arun Emporium at Khichapokhari, where our small office stood. We lived in the same building. We had a handful of employees. Even with these limitations, I decided to hire a chartered accountant, a professional secretary and employees who had good knowledge of the import and export business. No business firm would hire a CA in those days. Conduct of the business depended on whatever knowledge the family members had of it. Breaking away from that culture, I laid emphasis on organization-building. You cannot achieve huge goals single-handedly. You need an organization for that. You need a group of experts. That is how the sapling of Arun Emporium has grown into the huge tree of the Chaudhary Group.

  Persistence

  I have encountered many challenges and situations in my professional life that made me feel weak inwardly. I was often overcome with fear of losing the battle. Nevertheless, I never gave up. Though I was inexperienced when my father became bedridden, I left no stone unturned to grow Pashupati Biscuits and the flour mills. In the early 1980s, a powerful political camp tried to ruin me. I did not panic, but associated myself with an even more powerful group.

  There are many more examples of my tenacity. I wanted to invest in energy and cement plants twenty-five years ago, but I was thwarted by man-made hurdles and unhealthy competition. From the Modi Khola project to Butwal Power Company, many of my plans for the sector came to naught. Despite all this, I remained determined to be a presence in the energy sector. Today we are planning joint investment with Coastal Energy, one of the leading power developers of India. As far as cement is concerned, we wanted to take over the state-run Himal Cement Factory many years ago, but got caught in the crossfire between two power centres. Today, when that factory is collecting dust, we are setting up huge cement plants in Myanmar, Sri Lanka, Mozambique and Cambodia, besides Nepal. What I am trying to show is that I have unflinching commitment to my objectives, regardless of the challenges I face. If one project does not work out, I am always prepared to switch to the next one to achieve my goals.

  Market astuteness

  Business does not run on the lines of elaborate theories outlined in thick books. Books may be helpful in generating business experts, but not businesspersons. One becomes a businessperson through market awareness.

  I would like to tell a story I heard a long time ago. There was a village where people did not wear shoes. The promoter of a slipper factory sent a renowned marketing guru to study the market feasibility for his product in that village. After surveying the region and interviewing the local residents for a month, the expert prepared his report: in the village where nobody had ever worn shoes, it was impossible to sell even one pair of slippers. After brooding over the report for a while, the owner of the company declared, ‘I am going to take my products to that village.’

  Everyone was surprised. He said, ‘The people there have walked barefoot their entire lives. That is our biggest potential market. All we have to do is to teach them to wear slippers.’ Shortly, as he had predicted, slippers became so popular
in the village that he opened his new factory in the village itself. This is what I call market astuteness.

  I had not done any market survey before collaborating with Thai Food. Nor did I do any feasibility study before setting up my plants in India. My awareness guided me. This is the main reason I do not undertake market research and stockpile reports submitted by consultants before venturing into a new business. I am fully confident of my market awareness. I have been guided by my astuteness in every business I have ventured into and every negotiation I have undertaken.

  Conservatism brings benefits

  I do not agree with the generally accepted norm that one should always be positive. This might be surprising coming from me, so let me clarify. I take notions such as ‘it’s okay’ or ‘everything happens for our own good’ as complacency. My philosophy in life is that a person should never be complacent or satisfied to accept whatever comes his way in life. That attitude obstructs one’s progress.

  Whenever a new venture is started, people tend to think about its positive aspects. I, however, always focus on the negative. Consider the positive aspects before getting into a project but, once you embark on it, you should focus on the negative aspects such as the challenges to be faced and the likely response of competitors. I make my colleagues focus on the negative aspects of my projects. It helps us to identify the possible or imminent problems so that we can duly address them. You start to mull over contingency plans. If you do not have contingency plans, then you might end up losing what you already have.

  Restlessness ruins negotiation

  The more you appear restless at the negotiating table, the more you lose. The person in front of you tries his best to corner you. A deal hinges a lot on how you talk and how you present yourself. I give the highest priority to my terms, my competence and my stake when I negotiate. For instance, when I am seeking fifty points, I will start asking for 100. In most cases, I succeed in striking a deal at seventy-five. Also, since everybody wants the best deal in negotiations, you can get a better deal if you can create a win-win situation for both sides.

  Making unnecessary demands can also lead to failed negotiations. I have already mentioned how I lost the Lands End hotel deal in Mumbai on account of my intractable stance on equal sharing of the management fee. I also failed to take the right position in my negotiations with Airtel. The telecom giant was ready to forge a partnership with us even before UTL and Mero Mobile had entered the Nepali market. It wanted at least 51 per cent stake in the venture, and would not settle for anything less than equal partnership. The talks broke down due to my intransigence. As a result, I had to put off my plans to invest in the telecom sector for a long while.

  Nothing succeeds like success

  As the saying goes, nothing succeeds like success. If you become successful in any venture, more successes will follow. You have to create a strong success story for the world to see if you want to establish yourself in business. You should create a persona that persuades others to trust you. However, if you try your hand at a new venture before your earlier business is established, you will not make your mark in the market. Try to look for a complementary sector when you are ready for a new venture. You have to put in a lot of extra effort if you venture into a field in which you do not have sufficient experience. I started Maha Laxmi Maida Mills to complement Pashupati Biscuits. I went on to start Wai Wai only after both these ventures were established. All three ventures are interrelated.

  Costs must be pruned

  The total cost of cement plants that we are launching simultaneously in Nepal, Myanmar, Sri Lanka and a few other countries is more than Rs 12 billion. These projects are at advanced stages of completion. However, you will not even get a hint of this if you visit our corporate office. There are only three people behind this huge project and they, too, are taking on the project simultaneously with their other, regular work. The cost to the company on each of these three people do not exceed Rs 250,000 a month. Other business houses would have probably set up project offices in all the countries concerned and hired a large number of staff. They would have already spent several millions by now. But we are working quietly and cost-effectively

  Discipline

  Discipline is about two things: personal conduct and time management.

  How do you conduct yourself with your colleagues? How do you present yourself before your partners, sales agents and buyers? These things determine your personal discipline. Talking idly with everyone you come across will diminish your stature. I do agree with the notion that you ought to treat your colleagues like friends. However, there is a limit to everything. If you become too intimate with your junior colleagues, then you struggle to give orders to them or to counsel them if they do something wrong. Nothing is more detrimental to an organization than a situation like that. To sum up, you need to strike a balance between respect, affection and fear when it comes to your relationship with your employees.

  Time is the most precious thing in this world. You cannot get it back when it is gone, regardless of how much you are willing to pay. How do we make the most of the limited time we have? This is a billion-dollar question. Do not forget that life is not just about business. We also have family and friends, and personal and social lives. You have to optimize the time you have allotted to your professional life to your maximum benefit so that you still have time left over for other things in life. If you cannot handle the most precious thing in the world with care, you may not be able to handle other matters either.

  Keep yourself updated

  I am a self-taught person. Whatever I have learnt is from observing others. I mingle with a lot of people. I make new friends wherever I go. I listen to them attentively. I study them carefully. I learn their tricks. They are my business school. Those who are happy limiting themselves to a narrow sphere cannot be big-timers.

  It is really important to keep yourself updated and stay abreast of what is going on around you. The more you are in step with the world outside, the more your personality shines. I had many weaknesses, and still do. But I did not have the inferiority complex that often circumscribes one’s world into a narrow zone of comfort. I have always striven to overcome my weaknesses so that I could grow as a person. That is why I never shy away from learning things I did not know anything about.

  Since my childhood, I have always wanted to make my presence known in every new situation or role. This is possible only if you keep a tab on the developments around you. I am an avid reader. I try to collect information on many subjects that I feel may come in handy at some point. I have initiated a system in my office to keep myself constantly updated with the latest information, no matter which part of the world I am in. Success is related to your personality.

  23

  Self-evaluation

  My temper

  I always strive for optimum use of time and resources. To manage this efficiently, tasks must be completed as scheduled. I have a level of expectation from my colleagues in this respect, and if they fail to deliver or perform poorly, that becomes a headache for me. In that situation, I easily lose my temper.

  Another factor that sparks my anger is my way of evaluating people. I always wonder why, if I can do something, others cannot do it too! I would have accomplished this task in this way if I were in his or her position. I would have met the target in this manner. And why couldn’t this person have done the same? I know this is an illogical approach, but who thinks logically when they are angry? As a result, many of my employees have felt offended and even quit, which only adds to my burden.

  To bypass this weakness, I have started to interact only with a small circle of employees. I used to meet with all the departmental heads during our monthly evaluation meetings in the past. These days, I invite only a handful of senior executives to the meetings.

  My aggressive nature

  When I lose my cool, I start to become aggressive. Due to this aspect of my nature, I have quarrelled bitterly with many people, including members
of the FNCCI and the CNI. When in a fit of anger, I use harsh words, intentionally or unintentionally. Though I do not harbour any ill intent towards the people to whom my words are directed, they take it personally. I soon forget about the incident, but those who have been offended remember the insult and look for an opportunity for revenge. They harm me when the opportunity arrives. My aggression has overshadowed my good qualities. Perception has a stronger impact than truth itself. Nobody analyses the person behind my conduct. They form their opinion of me from my projected image.

  My management of human resources

  I expect more than I should from my employees. I want them to accomplish everything as soon as possible. What I tend to forget is that not all people are equally capable. Some of them plunge into nervousness when pressed to deliver, further spoiling the task at hand. That eventually harms the company.

  The society and the environment in which we work have their own limitations too. We cannot meet all our targets even if we strive relentlessly. Governmental red tape or the different priorities and working pace of one’s partners can be impediments. As managerial leaders, we should expect outcomes only after considering our social milieu. Sometimes I become extremely impractical, focusing on my targets even if the world around me turned upside down. This must have been disheartening to many of my colleagues.