Connect with us

Entrepreneurs

One Small Step For Neil Armstrong, One Giant Leap For Vivian Reddy

When he launched an electrical company 35 years ago, Vivian Reddy started out in debt. Today, the billionaire owns Africa’s largest power conglomerate.

Published

on

It all began rather inauspiciously. Vivian Reddy grew up in one of Durban’s poorest neighborhoods, on South Africa’s east coast, as the youngest of nine children. His father, a schoolteacher, was earning a meager $3.70 a month—which was a pittance, even in the 1950s.

“Times were really tough. And when you’re one of nine siblings, you’re always fighting for things. Those were very humble beginnings,” says Reddy.

Being the youngest he had to fight for his place, which toughened him up. After a somewhat mundane childhood, he joined the Boy Scouts at the age of 12, where he learnt about teamwork, self-reliance and leadership. The group sparked his ambition to succeed in life.

“It’s an amazing organization that helped to shape my future,” he says.

It also led to one of the most defining moments in Reddy’s life. When he was 16, he was chosen to head the South African delegation at an international Boy Scouts jamboree in Japan where he encountered a man who would become his life-long inspiration: astronaut Neil Armstrong, the first man to walk on the moon.

“He made an indelible impression on me. When I talked to him, he told me about his life, and how important it was to persevere. I still remember his words: ‘Perseverance prevails when all else fails.’ He also told me: ‘If you can dream it, you can achieve it.’ His words stuck with me. They were my source of inspiration for many years to come,” says Reddy.

As if Armstrong had a hunch, perseverance was indeed a character trait Reddy would need in his professional life. He had trained as an electrician and found a job with an electrical company in Pietermaritzburg, 60 kilometers north of Durban. A few years later, he was promoted to branch manager. His career prospects looked good, but when his bosses held a corporate Christmas party in the late 70s, during the height of Apartheid, in two separate rooms—one for the white management, the other for the black workers—he could not keep his mouth shut.

“I have always been very radical in my views, and I could not tolerate injustices. So I took the workers over to the other side. The white managers were very upset. On Monday morning, I was called into the office and fired. I was very angry and I told the managing director that, one day, I would have an electrical company bigger than his, even though I didn’t have two cents in my back pocket,” he says.

Freshly unemployed, Reddy was about to face some tough times. Word had spread in the industry that he was a troublemaker. His job applications were met with silence. That left him with only one option: to open his own business, Reddy Electrical.

The first contract he netted was an electrical installation worth $5,300, which was a substantial sum of money at that time. Reddy had just got married to his first wife, Mogi Naidoo, with whom he would have three children, still lived with his parents and was saving up for their honeymoon. He worked day and night to finish the job. But when he went in his ramshackle pick-up truck to collect his money, he found a note on the company’s door that sent a chill down his spine: ‘Company in liquidation. Contact our attorneys.’

“My whole world fell flat. I was shocked to the core. I couldn’t believe it. I had the naïve expectation that if you deliver a service, you will be rewarded. Then I was confronted with the real world. I realized how important it is to have securities in place before you do a job. I was a good tradesman, but I had no financial experience. I had to learn the hard way to become a good business person,” he says.

When he lay in bed that evening, wallowing in depression, the words of Neil Armstrong came back to his mind. He realized it was time to live up to his ideals. He had to persevere and work towards achieving his dream of becoming the biggest electrical company in South Africa.

“I got up at 2AM and started to make a plan about how I was going to overcome this. And I tell you what: it inspired me. I decided I was going to succeed. The first thing I did the next morning was to go to see everyone I owed money and told them the truth, that I was unable to pay them back,” Reddy says.

There was very little sympathy. He received threats and legal letters from all of his suppliers but one, while his bank pressured him to settle his small overdraft. Only when Reddy proved month after month, that he was paying back his debt in small installments, did his debtors relent.

“Only one company allowed me to continue trading. I still do business with them. I’ve given them billions worth of contracts because they stood by me,” he says.

Today, as Reddy has made billions with his diversified Edison Corp, many may wish they had done the same.

It would be a long journey. Reddy borrowed $53 from his sister and launched into rebuilding his business. He worked 18-hour-days. Within five months, much earlier than he had hoped, he paid back all of his debts.

“One thing I learnt from this experience is financial discipline. One of the problems in business today is that start-ups overspend. They have a business plan and think it’s going to work immediately. But it takes at least three to four years before you can even turn a profit. That’s a reality a lot of people don’t want to see,” he says.

The first years were hard. Whenever he tendered for contracts, Reddy didn’t receive a reply. Then he realized: it was his firm’s name, Reddy Electrical, that was detrimental to his business as long as apartheid ruled South Africa. His luck changed when he renamed his company Edison Power, after the inventor of the electrical light bulb, Thomas Edison.

“I realized that because my name indicated that I am Indian, people were not going to give me work. I decided to masquerade as a white person. People used to phone and ask to speak to Mr. Edison. So I said: ‘Mr. Edison is not in. Can I help you?’ It was the only way I could succeed at that time,” he says.

The ruse worked until the firms found out. They retaliated by delaying payments and sabotaging contracts wherever they could, Reddy says.

“They did everything to make us lose money, but we persevered. I kept on investing in my staff, training them. We became perfectionists. Our workmanship became so good, that after four years, we became an exemplar company. We even had to turn away work,” he explains.

Reddy’s business really kicked off in the early 1990s, towards the end of Apartheid, when Nelson Mandela, the leader of the African National Congress (ANC) was released and activists, like President Jacob Zuma, returned from exile. Reddy became a major benefactor of the ANC and a close friend of Zuma’s.

“I wasn’t politically active, but I was always conscious of Apartheid issues, so I got involved. I financially supported the ANC, and have been very consistent in my support since then. It’s not a new-found relationship,” Reddy says.

Reddy, who in the South African media regularly gets tongue-lashed for his controversial funding of politicians and involvement in various empowerment deals, insists that his success in business is based on excellence in service delivery, not on political connections.

“We win tenders because we are good at what we are doing. We are the biggest electrical business in the country. A ‘tenderpreneur’ is someone who gets a tender because he knows someone, not because he is good at his job. I believe that when you have friends that are of influence, it is morally wrong to use that relationship to prejudice them in your favor. I’ve never made any demands,” he says.

Today Edison Corporation, which employs 7,500 people, has become a diversified, family-owned conglomerate with interests in property, casinos, wind and solar energy as well as medical waste management. It is the oldest surviving electrical company in South Africa and, with a multimillion US dollar turnover, the biggest in Africa.

“I have achieved my dream by working towards a policy I called BABA, which stands for biggest and best in Africa. We are very dependable. We still have the same clients we had 30 years ago. Building relationships is very important,” Reddy says.

Over the years, Edison Corp has netted countless lucrative electrical engineering contracts, including the $750 million Durban’s Dube Trade Port, international airports, casinos, hotels, shopping malls, convention centers, theme parks and golf estates.

“He is charming, persuasive and extremely self-confident. Whatever he sets his mind to, he makes happen. He is an achiever,” says Durban lawyer Ashwin Trikamjee, an old family friend who has known Reddy for more than 40 years.

Reddy, who is estimated to be worth billions, but does not want to disclose his net worth, says with a wink of an eye: “If I give millions of my personal money to charity, it means I can afford it.”

There is certainly no restraint to his cash flow. It’s no secret that Reddy, whose trademark are lightly-colored, tailor-made suits, likes to lead a lavish life of travel, luxury and style. He bought a huge, modern mansion in one of Durban’s most exclusive suburbs where he lives with his second wife, TV and radio personality Sorisha Naidoo, and their children, Saihil, four, and Kalina, two. In the garage are parked a fleet of luxury cars, including a Rolls Royce Ghost and a Bentley Continental GT. He is also a family man who loves to play chess with his wife, spend time with his children and grandchildren and watch soccer. His other hobby, is gambling, and that one he has turned into a flourishing business. In 1994, when gambling was legalized in the newly democratic South Africa, Reddy smelled opportunity and launched himself into a sector that, at that point, he knew little about.

“I love gambling. When I told people I wanted to own a casino, they laughed at me. But I knew casinos are all about good management, so I went in with the right partners, an international management company. We put in a bid, scored the highest points and won the license,” he says.

By 1999, he opened his first casino, Monte Vista, in his home province KwaZulu-Natal, which would over the next decade be followed by two multi-million dollar casinos in Durban, Suncoast and Sibaya, and interests in many others. Reddy has cast his eye even further. His next goal is to open five casinos on the continent, expanding into Uganda, Tanzania, Nigeria, Kenya and Zimbabwe.

Reddy says it’s a myth that one can only be successful in a business sector one has specialized in. It’s all about doing in-depth research, selecting the right partners and learning as you go along, he says, adding that only entrepreneurs who are willing to take calculated risks and explore new opportunities will enjoy major success.

“You’ve got to go beyond your borders. You’ve got to remove the blinkers from your eyes. That’s what life is all about,” he believes.

From the casino business, he branched out into real estate. Most recently, Reddy built a $53 million shopping mall in Newcastle, and is about to finalize a posh shopping, medical, office, hotel and residential complex outside of Durban.

“Property is one of the easiest businesses. People just make it sound difficult. I don’t understand why more people don’t invest in real estate. I see great investment opportunities all over Africa. People must just go out and grasp them,” he says.

Like every good entrepreneur, Reddy is never content with what he has, always on the lookout for new opportunities, ways to innovate and expand.

“You have to constantly evolve your business. When you’re in business, you have to do research. Business is all about knowing what’s happening next, how the market evolves. That’s what innovation is all about, and that’s what we do. I’m always planning five years ahead. And I diversify,” he explains.

What helps him to reach new horizons, he says, is a second philosophic principle he came up with, called CANEI, or ‘constant and never-ending improvement’.

“It simply means that today must be better than yesterday, and tomorrow must be better than today. You’ve got to strive for improvement, whether it’s in business, sports or your private life. This principle is the mantra of my business,” he explains.

It’s a principle Reddy applies not only to grow his own business. It also forms the basis for his entire supply chain. In the past three decades, Reddy has kick-started dozens of Black Economic Empowerment (BEE) businesses and dished out millions to previously disadvantaged subcontractors. Through his involvement in development and mentorship programs to help grow South African businesses, he has been credited for ensuring that small and medium-sized firms get a piece of the BEE cake.

“My goal is to empower people. I started implementing BEE policies 35 years ago, from the time I started. Whenever we give out contracts, we pay attention to BEE. It’s very, very important to me. We have very strict internal policies that we apply. I know what it is like to start from scratch, to be struggling,” says Reddy, whose Edison Corp is a Level 2 BEE Contributor, which means that the group has reached somewhere between 85 and 99 points on the 100-point scorecard.

Empowering people is also a motto Reddy, whose real first name is Vathasallum, which means ‘child of peace and tranquility’ in Hindu, applies to his staff members. It starts with creating a work environment in which people feel appreciated to help them rise to their full potential. Edison Corp’s offices have a quiet room, where staff can relax, and every once in a while, the computer screens are automatically turned off for a few minutes, to ensure people take breaks. Reddy also regularly organizes staff lunches to create team spirit.

“He wants people to feel comfortable at the workplace and enable them to grow in their work. He takes an interest in everyone, from the office cleaner to the top executive. He doesn’t micromanage but makes sure people meet their targets,” says Edison Corp’s brands and communications manager Roderick Ephraim.

Reddy also places emphasis on Edison Corp’s social responsibility section, which has a strong focus on assisting children. To share some of his wealth more permanently, he launched a private foundation on his 60th birthday in February, which he celebrated with an event for 10,000 disadvantaged children—apart from a glamorous $1 million, two-day birthday bash with hundreds of guests, including family members, friends, business partners, royalty and politicians. The Vivian Reddy Trust, to which he pledged $10.6 million of his own money, focuses on improving the lives of poor children. In five years time, when Reddy plans to retire, he will even go further and donate half of his wealth to charity, he says.

Meanwhile, the electricity tycoon is grooming his 32-year-old son from his first marriage, Santhan, to take over the chairmanship of Edison Corp. Despite the fact that Reddy has built a business empire that includes the biggest electrical company on the continent, there remains a lot to accomplish and conquer.

“The legacy I leave for my son is a $300 billion opportunity to electrify Africa. If you look at a satellite image of Africa at night, it’s still largely a dark continent. The opportunity is massive.”

Continue Reading
Advertisement
Comments