Narendra Raval is a palm reader, a priest and an astrologer; credentials that have seen high-ranking people – including presidents – call on him.
Despite his powers, Guru, as he is known, did not foretell the meteoric rise of his integrated construction firm, the largest in East and Central Africa, with an annual turnover of $650 million, according to FORBES.
The rise is even more remarkable when you consider he was born in India’s Gujarat state, to a family so poor that they couldn’t afford to send him to school.
Raval, now a Kenyan citizen worth around $400 million according to FORBES, is the industrialist behind the Devki Group of Companies, a conglomerate of three companies which manufactures cement, roofing sheets and steel.
But even with his sizeable bank account and reputation, Raval has maintained a down-to-earth character; repeatedly crediting his company’s success to his God and more than 4,000 employees.
“When we started the steel manufacturing company in the early 1990s, my 70 employees agreed to go months without pay; we were not making any sales,” says Raval. “A majority of those loyal pioneer employees are still working with me and so are their children.”
He’s also an indefatigable philanthropist who spends millions, including half his annual salary, on scholarships, plus clothes and food for hundreds of hungry children. He has also poured his money into government schools.
“When you are blessed, it is your duty to bless the less fortunate,” he says.
When we meet in his office early on a Friday morning for this interview, it quickly becomes apparent that Raval is an extremely busy man for whom 24 hours in a day is not enough. His two mobile phones buzz every five minutes.
Two of those calls were from top-ranking government officials. As he ends one of the phone conversations, he apologizes and explains that the Minister of Industry was scheduled to tour his roofing sheets factory in two days’ time.
It’s not surprising. The government has lined up several multi-billion-dollar infrastructure projects, making Raval a highly sought after entrepreneur.
His journey to the top began at the age of 11, when he joined a temple in India as a priest’s assistant. There he studied Hinduism and astrology in exchange for a $50 monthly bursary for school.
Raval was sent to Kenya in 1978, to serve as the head priest of the Swaminarayan Temple in Nairobi. He was 16.
At the Nairobi temple, he pioneered mentorship classes and counseled youngsters against drug abuse. In 1982, his father instructed him to get married in order to set a good example for his two younger siblings.
“My family forced me to get married,” he says, as he excuses himself to answer yet another phone call, which this time, incidentally, is from his wife Neeta, a medical doctor.
“In order to get married, I had to leave the temple, which I did in 1982. Three years later, I married Neeta.”
The newlyweds tried their hand at business in 1986. They opened a hardware shop called The Steel Centre, in Gikomba, a market area in bustling downtown Nairobi.
Gikomba was not their preferred site. A former Kenyan finance minister rented a small shop to the couple for $70 (then Sh3,500) per month, a rate four times cheaper than shops in the smarter end of town.
“My wife and I did everything ourselves; one of us would make the deliveries while the other manned the shop,” he says.
The Steel Centre churned out $24,000 a month, a pretty penny in 1986.
Raval ventured into steel manufacturing. He approached one of his acquaintances, and his mentor, former President Daniel arap Moi, who promised to help with plans provided Raval made it his priority to employ Kenyans. It was an easy promise for Raval to keep.
Some of Moi’s friends offered to sell land to Raval but asked too much.
In 1989, he secured 30 acres of land in Athi River, a vast industrial zone about 35 kilometers south of Nairobi, for Sh365,000 (around $4,000 now). Today, this amount can only buy an eighth of an acre in the same place.
This piece of land, which Raval shared with wild animals, became the launch pad for the Devki Group business empire.
“It was a piece of land that hid any potential it had away from us,” says Raval.
Kenya Commercial Bank (KCB), a government-owned lender, lent him a $700,000 to set up the factory, import the raw materials to kick start production in 1992.
It wasn’t an easy birth. The three established steel manufacturers at the time fought back.
“They priced their products a few shillings below ours. They had established markets so their dubious pricing tactics did not affect their bottom lines,” he says.
Six months after commissioning the plant, Devki Steel was selling less than 10% of what it made. It had a growing pile of finished product and raw material in its warehouses.
It was at this point that Raval froze salaries. They heard him out; agreed to go three months without pay, and survive on food allowances. It was hard but good news was around the corner.
In the third quarter of 1992, international steel prices skyrocketed.
Devki Steel was in the pound seats. Its warehouses were packed with $1.2 million worth of raw material and finished products. Raval made a killing, earning $1 million in profit right off. Devki Steel was on its way.
“The profit enabled me to settle my workers’ dues, clear my bank loan and invest in expanding the factory,” Raval recalls, shaking his head in disbelief at his luck.
In 2015, Devki Steel produces 250,000 tons of over 100 different finished products every year, a huge climb from 7,500 tons in 1992 when it produced merely steel reinforcement bars and tubes.
Seventy percent of Devki Steel’s products are sold in Kenya. The rest is exported to Rwanda, Uganda, South Sudan, Tanzania, Burundi and Ethiopia.
After working his way up from a humble priest to one of Africa’s leading entrepreneurs, Raval is far from ready to slow down. He wants to offer Kenyans construction materials to build a house at an affordable price.
In 2008, he took $72 million from his steel business to set up Maisha Mabati Mills. It manufactures aluminum and zinc-coated iron sheets, the most common form of roofing material in many parts of the continent. The company’s size, in terms of assets, has since grown to $125 million, churning out 200,000 metric tons of iron sheets every year.
Raval was investing again in 2010, this time commissioning a $100-million cement factory, National Cement, with an annual capacity of 350,000 tons. Investments have pushed annual output to 1.2 million tons.
Kenya’s cement industry is no picnic either. It is highly competitive with players jostling for control against Lafarge-owned Bamburi Cement.
New Kenyan players, like National Cement, Mombasa Cement and Savanna Cement, have entered the market, driven by a slew of infrastructure and housing projects in East Africa.
Kenya’s six cement makers produced 5.2 million tons in the 11 months to November 2014, a 13% increase from the 4.6 million tons manufactured in a similar period the previous year, according to the Kenya National Bureau of Statistics (KNBS).
The new cement players, despite already producing excess capacity, are now announcing plans to expand.
Raval last year accepted $70 million ($55 million in debt and $15 million in shareholding) from the International Finance Corporation (IFC). In return, the World Bank’s lending arm took a minority stake in Devki Group of Companies.
“We would like to send a strong signal of IFC’s confidence in a Kenyan company making a difference in the local economy,” the IFC said when the deal was announced.
The money will be used to expand National Cement’s annual production capacity to 2 million by 2016. This includes the construction of a clinker (cement’s main raw material) factory.
The $200-million expansion will make National Cement the largest manufacturer in Kenya, for now. ARM Cement and Bamburi Cement have also announced plans to increase capacity.
Johnson Nderi, the corporate finance manager at ABC Capital, says that these enhanced factories and investments in improved equipment has driven the price of a 50 kilogram bag of cement down from approximately $9 to $7 in three years.
“Kenya is experiencing a construction boom and it is therefore logical that the monopolistic cement industry in the country has finally come to an end following the entry of new local players,” says Nderi.
By agreeing to do a deal with the IFC, Raval snubbed an offer from Africa’s richest man, Aliko Dangote. The Nigerian cement king wanted to buy Raval out and then changed his offer to a majority stake. Raval said no.
Undeterred, Dangote is planning to enter Kenya’s cement scene with a $400 million factory in Kitui.
“We had our reasons for not accepting the offer from Dangote. IFC, other than the substantial financial support, will also bring on board their expertise in infrastructure management,” he says.
The IFC’s expertise will be useful in Raval’s grand plan to expand across the continent. He plans to set up steel and cement factories in the Democratic Republic of Congo, Uganda, Tanzania, Zambia and Nigeria over the next five years. The expansion will cost around $150 million, with a portion of this coming from the IFC.
“Beginning next year, we shall be setting up factories in one new country every year. I traveled to Zambia in February to view some potential factory sites,” he says.
Raval could be onto something as the IFC estimates that Africa needs to increase cement production by between 10 and 15 tons per year, every year, for the next decade, to meet demand.
In the four years to 2013, production of cement in the continent increased from 33 metric tons to 88 tons, growth the IFC and Raval hope to sustain ahead of a listing.
“The intention is to list the Devki Group at the Nairobi Securities Exchange (NSE) after 2020. I want to give Kenyans a chance to own a part of what is innately their company,”
he says.
Raval dreams of being the man who put a roof over every Kenyan’s head without breaking the bank.
Raval doesn’t like to waste time. He is a trained pilot who flies his helicopter to visit his factories.
“There is still a lot more to be done. Our intention is to become the biggest pan-African manufacturer of steel and cement.”
So, if you see a chopper swooping over Nairobi, it could be a steel-and-cement-making priest on a mission.