Corporate Newsletter Vol 15 No. 14
August 15 - September 14, 2016

Reflections: My Journey of Building a Global Conglomerate

Generation Next Conference

Organized by: Barclay's Asia

Taj Exotica Goa, July 29-31

My Story

- I come from a traditional family; grandfather brought cloths from India, father modernized it by importing clothes and consumer items from Japan. Father thought I would do great if I could just look after the department store that he started. But I loved doing the unconventional. I started a disco. But then that was not away from business --- others went to the disco for entertainment, I was thinking business. That was in my teens. I started business even before that. As a school project, I ran tuck-shop in school when I was only 10. That gave me a hands-on experience of business quite early on.

- I always dreamed of going to Bollywood, not to act but to the city of 'Bombay' – that was our dream city. I was planning to go there to study chartered accountancy. I was a good student. I secured fifth position in a nation-wide examination of School Leaving Certificate of Nepal in 1972. That was very prestigious achievement at that time. But then father had heart ailment. At that time, medical facilities were poor. Father was advised complete rest and withdrawal from business. So I decided to take over his business when I was 18.

- Father's office was small -- just two desks. I had a choice of staying at the counter of Arun Emporeum, the department store he started, or become an entrepreneur myself. I chose the second option.

- My father had some basic preparations for opening up a biscuit factory, I took that up.

I thought of Indian market – the Northeast of India that had been a long-neglected part of India – even Indian corporate houses were reluctant to go there due to the perpetual problems there ever since 1947.

- I used to visit Darjeeling in college days and had an idea about NE India. I started promoting our biscuits there. Very soon it became a well known brand in NE India. It was at a time when the biscuit market was completely dominated by Britannia and parley.

- We opened a flour mill at Biratnagar in eastern Nepal to support the biscuit factory. But not even 10 percent of that was consumed on biscuits. So I started looking for a product where I could use flour.

- Father used to go to Japan and Korea to buy clothes for the department store. I started doing that after his illness. But soon, in less than a year, I was fed up with clothes. I thought of importing Suzuki cars to Nepal from Japan. It was at a time when even Maruti had not started in India.

- Suzuki did not trust me as I was only a clothes trader and a quite young man. But I did my best to convince them. They gave me a trial dealership, along with 4 others to sell Suzuki in Nepal. Among the five, whoever sold most cars in six months would get it dealership.

- I went from door to door – neighbors, friends, relatives – asking them to buy one car – requesting them to buy car, telling them I would buy that back after six months. At that time I used to sell car for Nrs. 80,000 (Inr. 50,000) for an 800cc small car.

- Then I started Panasonic but there was a lot of politics associated and it is a long story.

Wai Wai

- I used to travel a lot for business. Thai flights had started to Kathmandu. Wealthy Nepali people used to go to Bangkok. They brought back Thai instant noodles. I saw cartons of noodles at the airport baggage belt.

- Then I got the idea of starting noodles plant – I had plenty of flour and Thailand was not far – I took the next flight, met with the company and pleaded to do a joint venture. They said no. Then I requested – let's do collaboration. They said no. Then I asked them to come and visit Nepal and help me start a factory. The owner Kitty Pong Sri came, I took him around, tried to please him for two full days. But he said noodles won't sell here. He suggested me to drop the idea.

- But I was persistent. I have the habit of listening to everybody but doing whatever my heart told me. I asked him for some support system for the factory – they gave me technical support for some fees and allowed me to use the same brand as they had no vision of taking it beyond their country.

- Now it is produced in over a dozen plants in India and Nepal. We are opening up a factory in Serbia, Midle East, Kenya, and Bangladesh.

- Now we have 25% share of Indian noodle market. Wai Wai sells 2.2 billion packets worldwide, which is 2 % of the global noodle market.

Industrial park and going multinational

- An idea came to my mind: I would develop an industrial park with all facilities – water, power, supplies, residence, etc. I wanted to invite corporate leaders from across the world to visit that industrial park, and after seeing that integrated facility, they would be convinced to do joint venture with me. They wouldn't have to worry about a thing as the industrial park would be fully self-sustainable. So the CG Industrial Park came into being in southern Nepal. It is now the one and only integrated industrial park of this scale in Nepal, housing more than a dozen industries.

- However, then the Maoist insurgency started and foreigners were reluctant to come to Nepal for joint venture.

- Then I thought: if Coke and Pepsi can set up factories in Nepal, why not Wai Wai go abroad? If situations in Nepal deter foreigners to invest, why shouldn't I go abroad? Then I started my multinational journey and now CG Corp|Global has become Nepal's first multinational.

Taj partnership

- I was thinking of entering the hospitality industry with some renowned brand. Coincidentally, Taj was facing some issues at that time and I joined them as a bit of a savior. So I started a 50-50 partnership in hotels in Sri Lanka and Maldives. Today we are the largest partner of Taj and have numerous hi-end iconic properties around the world and jungle safari resorts in India and Nepal.

- Hospitality is a great area for doing business globally. The rules of the game are the same anywhere you go – whether in New York or Dubai or India or Maldives.

- Hospitality has big prospects as an area of growth. You don't need big management of your own, you can just partner with a good management.

- Now we run or own or partner with almost 80 hotels worldwide. Our target is to have 200 hotels under our fold by 2020.

Recent trends

I can see changing trends that can redefine business in the days to come. There are a few common things about them. Let us take the examples first:

1. Uber -- the biggest taxi service in the world is a company that does not own a single taxi

2. Airbnb -- the biggest online hotelier with the maximum number of rooms, but does not even have a single hotel of its own

3. Alibaba – the biggest e-trading platform without a warehouse and factory

4. OYO Rooms – In India a young man came up with a new idea. Ritesh Agrawal, who is just 22 now, has already started a groundbreaking hotel room booking platform called OYO Rooms. That has now hotel rooms in 193 cities across India and has recently stepped out into Malaysia. He started it simple --- buying vacant hotel rooms for heavily subsidized price and making profit by selling these rooms online.

Now what is common between them?

First, they rely on modern technology. They use the recent online tools. Geographical and political boundaries do not deter them to do business.

Second, they connect people who need the product with people who have the product and are willing to sell. They provided a forum where the service provider and recipient come together.

Third, they prioritized convenience of the consumers. Today, consumers are far more intelligent than ever. These businesses understand what inconveniences the consumers are facing and provide solutions to them.

Traditional thought – a myth

- To me the traditional thought of what is required to be successful in business is no more relevant. You don't need to come from a big business family. You don't need to go to a big B-School. You don't need to have capital. That you need a business background, good business education, and enough capital to excel in business has already been proved myths.

- Jack Ma, Jan Koum, Ritesh Agrawal (of OYO Rooms) --- they had none of these. They did not come from a business background, they did not go to big schools in Harvard or Stanford or Cambridge, and they did not have capital. They all had an innovative idea.

- You only need that one innovative idea --- a commitment to follow that idea --- fire in the belly ------ and hunger to continue to chase until it happens.

Startups

- I know there are many people with money who are ready to give startup funding to innovative young minds. There are many startup funding options available for innovation in the Silicon Valley.

- I personally encourage young and bright minds to come up with such a groundbreaking idea that can change the whole scenario.

Surfing against the tide

- I request you all not to complain about your situations and circumstances. I can prove you with my own case that it is only a secondary thing.

- I ventured into new businesses in Nepal when the entire scenario looked bleak with Maoist insurgency, which left 16,000 people killed. When businesses were closing down due to losses, I somehow found ways to survive. I made continued and sustained progress over the insurgency years. I faced serious challenges, but never gave up.

- I started hotels in Sri Lanka when they the LTTE terrorism was at its peak. The day I landed in Colombo, they had bombed six aircrafts. Can you believe it! If I had feared, I would have come back the next day and would never ever think about Sri Lanka. But I persevered and hoped for the best.

- I started business in Northeast India where big corporate houses fear to go. I set up factories and started whole new business operations there when outside people had goose bumps just with the thought of going to that place.

- I am setting up new hotels and Wai Wai plants in African countries such as Nigeria, Kenya, and Uganda. Nobody would like to take the risk there. But that is not me. Without risk, life is boring.

Success mantras

- All you need is dedication, a confidence, and a direction in life. Your resolve should be strong enough to withstand any challenge – and I can guarantee you, nothing can stop you.

- Your vision should be clear and you should be your own competent commander. You should have a clear goal about where you want to go and what you want to become.

- Never complain – there is no enabling environment, I couldn't go to the big B-schools, I don't have money, etc. etc. These are not important. What is important is your own sense of worth and a goal in life.

Have a dream

To be successful, you need to have a dream. A dream big enough – dream such a dream that will not let you sleep again. And pursue it whole heartedly.

Dream – because all the great inventions are results of some person's dream

Dream – because it sets the forces around you in action

Dream – because it gives you the direction and a meaning of life

Dream – because it is the unique faculty that you, as a human being, are endowed with

Dream – and have a firm belief that nothing will stop you from achieving your goal

Dream – and pursue your dream - and all accomplishments will follow

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