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.
The Bolt And The Beautiful
From cheers on the track and field to cheers of a different kind, Jamaican sprinting champion Usain Bolt was in South Africa recently to launch his signature champagne.
Widely considered the world’s fastest man, Usain Bolt, the nine-time Olympic gold medalist who has broken records, is now breaking new ground in the business world.
He was in South Africa in January to launch a limited edition champagne in collaboration with champagne producer G.H. Mumm.
Having graced some of the world’s biggest Olympic stadiums, the retired Jamaican sprinter was at the swanky The Maslow hotel in Johannesburg, promoting the pink bubbly as it poured endlessly into fluted glasses.
As the $45 Mumm Olympe Rosé bottle was being passed around, all attention was on the world champion.
“In Jamaica, we do this naturally; we mix cognac with champagne, and it’s something I enjoy. So when we sat down in the first meeting and we were trying to figure out what direction we wanted to go with for the bottle and with the drink, I mentioned it and asked ‘is it possible?’ and they said ‘yes’. So for me, that was something I was happy about. When you taste it, you’ll taste the cognac and together it’s very nice, trust me,” Bolt tells FORBES AFRICA, aptly marketing his product.
The A-list sports star poses with two bottles, symbolic of the two years it took to create what he calls a premium drink.
G. H. Mumm’s Senior Global Brand Manager, Etienne Cassuto, says collaborations of this magnitude have to be a reflection of authenticity and teamwork.
“This is not something we created and said ‘great, put your name on it, sign it and we sell it’; he created this wine with us and that is why it is something that is truly collaborative and that is where some brands get it wrong,” he says.
“It took a long time to really get to know Usain Bolt… as an athlete, as someone who has broken records and who has surpassed everything in life to get to where he is today. This desire to partner with Usain Bolt, who is now a retired athlete but still pushing the limit to what he can achieve and really daring himself to go beyond to find his next victory… that is why since 2016, we have been collaborating to try and understand how we can build something in common.”
Bolt, who retired from athletics in 2017, has since pursued a career in football; he decided to hang up his boots in 2018.
His short-lived football career saw him play for Central Coast Mariners, and train in South Africa with Mamelodi Sundowns F.C.
The Olympic sprint champion says athletes should focus on building a brand beyond the track.
“In sports, I was always trying to be the best and do things that have never been done before, it is the same thing in business. You have to find things that no one has done before… As athletes, you should focus on trying to build your brand. Try to work hard and try to develop a personality.
“I think I get sponsorships because I have a personality. I am different, and I stand out. Develop a personality, a brand that people know, this is Bolt, this is Simbine, this is Wayde. I always tell Wayde ‘it is good to be fast and to be great, but if you want to build your brand you have to show your personality’. People will want you to be a part of their brand’,” he tells us.
Akani Simbine and Wayde van Niekerk are South African athletes.
And Bolt loves South Africa. “When they called and told me we are launching in South Africa, I was happy. Last year, I had so much fun. The energy was different. It felt like home because this is the only place I have been to that I have danced so much. In Jamaica, we dance a lot, but in Africa, you guys dance. A lot!” he says joyfully.
The whole vibe is that of celebration.
“Africa is an exciting market for champagne. African consumers want more premium goods; they want to really discover new things, new products, new categories and they want to spend a little more to discover high-quality products, whether it is luxury or premium goods,” adds Cassuto.
South Africa’s affluent market is no different, and Bolt attests to that – the man fast on the track and faster with his soundbites.
This Bioengineering Startup Just Raised $90 Million To Make Your Veggie Burger Taste Better
One of the ag tech world’s few unicorns is spinning off a new food ingredients company called Motif Ingredients with a $90 million Series A.
Motif will leverage intellectual property and facilities from its parent company Ginkgo Bioworks, which was last valued in 2017 at $1.38 billion, when it raised a $275 million Series D. Gingko is known for the ability to rapidly produce DNA for applications from microbes that replace fertilizer to ones that produce perfume fragrances.
At Motif, that technology will be inserted into yeast cells. The yeast is then fermented, as in beer brewing, except that instead of producing alcohol, the yeast creates whatever by-product Motif’s customers want.
These ingredients can be customized to mimic flavors or textures similar to those found in protein products like beef and dairy—a potential game-changer for the budding industry of plant-based foods, which has seen everything from burgers to cheese alternatives gain popularity in recent years.
READ MORE | The Foodies With A Drive For Business
Take Impossible Foods, backed by top investors from Bill Gates to GV. Its soy-and-vegetable-based burger still bleeds like the traditional beef version because of an added ingredient called heme, a molecule found in nearly all living plants and animals.
Impossible’s products rely on this ingredient, which is hard to source. But, as Jason Kelly, Ginkgo Bioworks cofounder and CEO says, Impossible doesn’t manufacture its own heme in-house. And that’s where labs like Motif come in.
“Instead of making another Impossible, we’ll be an ingredient supplier. We’ll supply the Impossible nugget or the egg-free whatever. There are many people who have branding and food development expertise who’d love to make new products in this space, but only a handful have the funding to do,” says Kelly.
“We’re focused on what you’d add to the existing supply chain to make it better. All these companies need it to make a veggie fish stick that tastes good.”
Motif investors include Breakthrough Energy Ventures, Louis Dreyfus Cos., Fonterra and Viking Global Investors.
Ginkgo Bioworks was first founded in 2008, based largely on research developed at the Massachusetts Institute of Technology by scientist Tom Knight, one of the company’s cofounders who came to biology after decades of work as a computer scientist. Knight’s philosophy of synthetic biology is to treat it as akin to computer programming, and Kelly sees his company as being a biological programmer.
“We’re like app developers writing a microbial app,” he said. “And our customers come to us and say, ‘Hey can you make me an app that does this?’”
This is Ginkgo’s second spin-off. In 2017, Ginkgo formed a joint venture with Bayer called Joyn Bio, which leverages the company’s assets and IP to create microbes that can replace or supplement fertilizer for different crops.
That company kicked off with a $100 million Series A round with investments from its parent companies and Viking Global Investors LP.
Similarly, Kelly sees Motif as a company that will operate in the same way for food ingredients, and he expects that as Ginkgo grows, it will spin out others. “We want to keep, in many, many verticals, popping business up that have access to our platform and ask for specs in different markets.”
-Chloe Sorvino and Alex Knapp; Forbes Staff
Handcrafted In A Cottage, Bottled For The Globe
The sisters had no idea their love for healthy food would catapult them into the international food market.
Siblings and foodies Mosibudi Makgato and Rosemary Padi grew up in a yard filled with fruits and vegetables in South Africa and with a mother who could rustle up any healthy dish using produce from the garden.
It was only natural that they started a catering business as a hobby in 2003.
The growing interest from customers drove the business to become a success until recession hit in 2008. The demand for catering decreased because people had less money to spend. However, the wedding season would always bring more customers for the sisters.
That avenue led to the birth of an idea – to develop an authentic South African drink known in some black communities as gemmer, which is commonly known as ginger beer.
“We catered at a wedding and guests kept saying it would be nice to have gemmer. We did the gemmer and people were raving about it more than the food. From the response we got, we thought this would be a nice way to push it into the industry,” Makgato recalls.
With the help and advice of their mother, the sisters did numerous tests and were impressed with the 18-day shelf life of their product. The pair decided to introduce the beverage at a contact’s shop that sold scones – Vero’s Cakes in the north of Johannesburg.
“Gemmer and scones go well together,” 37-year-old Makgato says.
Business was initially slow. They would deliver bottles at the Vero’s Cake store and two weeks later, the spoiled drinks would have to be replaced because they were not sold. This led to them hosting tastings for market research. As a result, they were able to establish that some people had bad experiences with gemmer in their childhood.
The duo went back to the drawing board, and worked on changing the perceptions of people and assuring them that they don’t use yeast in their product compared to the traditional way of making the drink. This was a healthier alternative and it was African, which meant it did not contain preservatives, Makgato says.
“We would set up a table, put cups, serve people at weddings and funerals and have conversations about gemmer with guests or attendees. We would invite ourselves to women’s gatherings, ask to be guest speakers and educate people about food, in general, because we are from a green-fingered family.”
In 2010, the sisters left catering completely to focus on the beloved South African drink. They registered their company as Yamama Gemmer after they had mastered their mother’s lessons on how to brew gemmer.
In just two years, people bought bottles without questioning and business was growing. They made enough money to buy their own double-door fridge instead of using the one at Vero’s.
The business finally had assets, at this time, Makgato and Padi were producing from a cottage in Randpark Ridge, about 33kms north of Johannesburg’s Central Business District. The cottage was once a storage facility and kitchen. Now, it has evolved into a factory filled with gas stoves and pots leftover from the catering business.
“In 2013, things were becoming busy; I would always have stock with me, I would go to functions and sell from the boot of my car, and would have to meet people who wanted to buy at petrol stations. People were talking about it. Gemmer was becoming a thing. In 2014, Rosemary left her high-paying position in banking to do gemmer,” Makgato says.
While Padi focused more on the business, it boomed further and they moved to certified premises, with a full-time employee at the store.
“When customers come in, I explain everything about gemmer. Customers are very happy, especially after the first introduction to it, even those that know ginger beer are happy with our product,” says Lynette Seleke, who has been working for the sisters for two years now.
The sister duo has also established distribution channels, reselling throughout Gauteng. Managing stock at Vero’s Cakes was becoming a challenge, so they opened a store in the same area in 2016, located not far from a restaurant selling African cuisine.
“Every year, we almost double the previous year’s turnover since 2016,” Makgato says.
Yamama Gemme has catered at a number of international events in South Africa like the Sanlam Handmade Contemporary Fair, the Delicious International Food and Music Festival, and they also had a stall at the popular Neighbourgoods Market.
The appeal is in their presentation. They infuse the drink with fruits and herbs and sometimes encourage people to have it with gin or rum, turning the drink into a cocktail.
“We guarantee that you will not have a hangover because ginger beer is a rehydrate. When you have a hangover, it’s because you are dehydrated, gemmer pulls those fluids that you were missing in your body, that’s why athletes love gemmer,” she says.
Padi adds: “Over the years, the demand has morphed to include a ready-to-drink bottle.” The two have since shown interest in the international market and have rebranded, as they have qualified to export globally. They could well be on their way to becoming known as the ginger beer baronesses of Soweto.
30 Years And Still Grooving
African footballers are a wanted commodity but are not necessarily from the continent
The Million Dollar Game
Noëlla Coursaris Musunka The Trailblazer In The Congo
His Bosses Rejected His Idea. Then Hans Langer Became A Billionaire From His Plan For Giant 3D Printers
- Cover Story2 weeks ago
Businesses Of The Future: 20 New Wealth Creators On The African Continent
- Cover Story3 weeks ago
The Monk Of Business: Ylias Akbaraly Talks About Secret To Success And Plans To Take Africa With Him
- Current Affairs4 weeks ago
Botswana Offers Zimbabwe $600 Million Of Loans: Report
- Billionaires2 weeks ago
At 21, Kylie Jenner Becomes The Youngest Self-Made Billionaire Ever
- Brand Voice4 weeks ago
Rising Africa Series: Thought Leaders Africa
- Woman2 weeks ago
Naomi Campbell: Africa Is One Of The Leading Continents In The World
- Cover Story3 weeks ago
A Solution To Improve Madagascar’s Local Economies
- Billionaires2 weeks ago
The Richest Woman In The World