Arun Chadha has done well for himself far from home. He overcame racism, built a company from the ground up and now runs a steel exporter that employs 300 people and turns over billions of rands, in a cutthroat business, in Johannesburg.
It all began in India, 7,559 kilometers from Johannesburg. It was humble fireside teachings from his father, who worked for the government, that led him to a career that took him to Africa 28 years ago.
“The one thing my father gave us was good education. I did my chartered accountancy, took up a job in the Middle East and then moved to Zambia in 1988,” says Chadha.
He was poached by another company and transferred to South Africa as an expatriate. It was here where trouble began.
“I came and took over as the Chief Executive of a British company. I faced a lot of problems because people refused to come and meet me because I am Indian. I used to get phone calls from people threatening me because of the color of my skin or cars following me,” he recalls.
It was hard but Chadha was harder. It took him just three months to show people skin didn’t matter to him.
“Surprisingly these same white guys became some of my closest friends as soon as they realized that our blood is all red, it’s not the skin that makes the difference, what makes the difference is the approach to things and the important thing is work.”
In 1994 he was transferred to New York. He decided South Africa was a beautiful country and he came back, became a permanent resident and Allied Chemicals and Steel, a general export business, was born.
“I had no problems setting up the company, getting a VAT registration or opening a bank account, none at all. I got all my approvals within three weeks,” he says.
Running his own business wasn’t easy. The first year’s turnover was R9-million ($656,000) but profit was a mere R20,000 ($1,500). This wasn’t enough to sustain the comfortable life he was used to as an expatriate.
“Life as an expatriate is very cushy because your house, car, furniture, children’s education and everything is paid for by the company. All of a sudden when you resign and start your own company, you have to pay for everything yourself,” says Chadha.
Expenses rose. He had to cut back. With his wife, they moved to a small rented flat for R3,500 ($250) where they stayed until the year 2000 when they bought their first home.
“Everything that was earned went back to the company to grow the company. What you see today is from those beginnings. The one [thing] that was there, which was on my side, was education… You might not use your education but it’s a stepping stone towards your next level,” he says.
In 1996 the company focused on its core product, steel. The business grew at a rapid rate. From the year 2000 to 2008, they touched a turnover of over a billion rand ($73 million).
“The problem thought though was always that I am a trader and not manufacturer. Sooner or later, someone will override me or overstep me and I will not be able to compete with them.”
In 2010, Chadha bought a piece of land, near Vereeniging, south of Johannesburg, to build a steel factory.
“That’s when I met Warne Rippon, he used to have a company called Steelrode and we decided to merge the two companies because we were not conflicting with each other. One was exporting into Africa and the other was focused on South Africa,” he says.
It was a long process. It took six months for the merger to be approved.
“From the days of 1994 where it took me 24 hours, it took us six months to get a VAT registration. That’s some of the frustrations new business people are facing now. I do not understand why it takes so long…,” he says.
The merger was finalized on March 1, 2013, giving birth to Allied Steelrode, which employs 300 people. The company has tripled its turnover in the last three years; but not without problems.
As an export company into Africa, it deals with emerging markets, some suffering from a cash crisis and others with unstable politics which weakens the economy.
“In Zimbabwe we are facing problems because the people we export to have the money in the banks but the banks can’t remit the money to us. We now have to accept money in pounds, euros, US dollars, and whatever is available… The devaluation in Zambia has been great. But after the elections are over and [President Edgar] Lungu has come in, it has been fairly stable.”
For Chadha, the biggest problem in Africa is the falling commodity prices.
“We hope the commodity prices start looking up in 2017. We see that oil has gone up, gold prices have gone up and that’s why steel prices are shooting up at the moment. I have a feeling 2017 is going to be a better year than 2016.”
It is optimism, steadfastness and kindness that led him to the top at the end of a 7,559-kilometer journey.
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