As a businessman who has felt the real cost of two global financial recessions — the ongoing one and another 80 years ago, Dr Manu Chandaria, one of Kenya’s leading industrialists, said it’s only by saving and investing that one can create wealth which will cushion him from such a crisis.
In between these two recessions, business empires have been built while others have collapsed.
Dr Chandaria, with his extended family, has been able to build the Comcraft Group that has a presence in 50 countries with companies in a wide range of industries.
Comcraft Group started the very year when the US, and the world at large, was experiencing a cash crunch in 1929.
Then, the man who would later become Dr Chandaria’s father-in-law, brought together a group of 10 individuals including Manu’s father, to buy Kenya Aluminium — a manufacturer of saucepans — from an Indian merchant who had gone broke.
“Progress in the financial world is based on savings,” Dr Chandaria said. “The business of speculation is very addictive. If you go to the casino once you always want to go back,” said the renowned businessman.
But the journey to financial success is littered with a myriad of challenges, key of which are the search for the quick buck and a mind set that wavers in its belief to achieve the ultimate goal, Dr Chandaria said.
Twenty years after his father-in-law had brought the group together to buy into Kenya Aluminium, the group fell apart after going into businesses they did not understand back in India.
“We would work together as a family to build the business,” Dr Chandaria said at a meeting hosted by the Kenya Association of Investment Groups last week.
“Coming together gives individuals and the business capacity to fight, especially when things are going wrong.”
The family bond has been one of the reasons touted for the success of Asian owned businesses in Kenya as they provide a common bond and the access to a cheap source of funding for businesses which might take years to build.
Though, in the African setting, family ties have been falling apart especially with the rapid adoption of the western culture. This has served to reduce the probability of establishing strong family businesses.
Instead in Kenya, for example, investment groups and partnerships have been in fashion as individuals seek to pool their funds to take part in bigger projects than they would have undertaken on their own.
Though, most are dogged with a leadership and long decision making process that often locks them out of investment opportunities.
“There has to be a leader who presents a vision to the team and everyone has to be willing to follow them,” he said.
It was in India where Chandaria had gone back in the early 40s after the outbreak of World War II that he got the opportunity to pursue higher education that helped open up his world.
Modern day education
“Because of education, we are what we are and where we are,” he said.
However, he added, modern day education does not teach about the virtues that should be guarded in society some of which include hard work, discipline and honesty.
But a lack of education should not stop an individual from prospering.
“If you have the time, dedication, and work hard you can succeed even though you do not have education.”
A case in point, Dr Chandaria said, is that of his father who had no formal education but moved to Kenya in the early 1900s in search of work with a target of raising 4,000 rupees and had to work for eight hours, five days a week.
But after working for many hours he had not hit his target, only raising 260 rupees. He opted to quit his job to start his own wholesale supply shop. The rupee was the official currency in Kenya at the time.
This brings another element in getting ahead in life where the individuals have to be bold enough to take risks.
Taking risks requires that individuals have “fire in their belly” and a focus which cannot be easily swayed.
Kenya’s Gross National Savings to Gross Domestic Product stands at 14.8 per cent, according to the latest official statistics. This pales in comparison to the countries like China where the same is at 40 per cent.