Devki Mills uses mix of faith and skills to beat rivals

Devki Group chairman Narendra Raval hosts President Kibaki during the opening of National Cement’s new plant along Mombasa Road recently. The president has been chief guest at all of Devki’s key milestones. Fredrick Onyango

His business card bears the name Guru, the highest title that can be accorded a descendant of the Brahmin priestly caste of the Hindu religion. The title is given after one completes 13 years of learning under the temple, allowing one be the community’s guide in all spheres of life.

It is by virtual of these credentials that Devki Steel Mills chairman Narendra Raval is not only in charge of strategic direction for a business empire estimated to have a turnover of Sh21 billion a year but also a priest, psalmist and astrologer.

“Religion has helped me fashion a business model that is more oriented towards giving than profit. If you are honest to self, suppliers and customers, business thrives,” he said during an interview at the company’s Athi River Headquarters, some 35 kilometres south of Nairobi.

In his forecasting role and communication with the other world he predicts the future for a couple of presidents in Africa on a regular basis, including some he insisted should not be named. “I do not charge for the services because the ability was given to be by god for the support of mankind,” he stressed.

Mr Raval admits that he was set apart to play the seemingly discordant roles at birth in 1962, when he was born to a caste that is charged with taking care of the spiritual side of Hindu adherents. Though he still preaches “serving Brahmins with guidance and blessings,” his stint in the temple was ended in 1982 when he married a medical doctor from Thika, the mother of his three children aged between 20 and five years.

With time on his hands Mr Raval started searching for a shop to set a business in Ngara, but could not get one because the available spaces were going for between Sh10,000 and Sh15,000 per month. A friend aware of his predicament tipped him of an opening in Gikomba, then associated with insecurity and filth.

The monthly rent of Sh5,000 asked for by the landlord, Nduati Kariuki, a former MP for Makuyu and Assistant Minister for finance, won him over and Steel Center Limited opened for business.

It was a hardware shop whose foundations were laid on human virtue rather than seed capital with suppliers of materials and commercial banks entrusting the retailer with products and money, respectively, on the promise of settlement once the products were sold.

Astrology, he says, led him to the line of business that had sales of Sh100,000 per day in 1992, when the Devki Steel factory was opened in Athi River to “protect consumers from suffering at the hands of monopolists and create jobs.”

However, he is a qualified Metallurgical Engineer having graduated from Alfred University in India

“I was feeling pain for others. If you work for people, money will come,” he said of a philosophy that is behind the impact investing craze that has recently caught up with the world’s leading conglomerates.

From the Gikomba days, his only regret over a Sh200,000 loan he lend a friend to start a retail shop, only for the borrower to lose the money in gambling.

He did not come back and I had no insurance then. Insurance was to come in handy later when a section of the Devki plant burned down. The company received a compensation of Sh59 million from Kenindia Insurance for the damages, which included lives.

Devki started with an establishment of 300 people and as a group is now employing 3,300 people, 1600 of them at the steel plant and 900 at the Ruiru Devki factory which produces roofing and fencing solutions under the Maisha brand.

The others are employed at National Cement (420), a subsidiary started three years ago that produces Simba Cement and in Mombasa (400), making Devki the only integrated construction solutions firm in East Africa. Another 750 employees will join the group when its new steel plant comes to fruition.

Mr Raval put the steel and cement investment at $200 million, enabling an output of 250,000 tonnes in a year across the various divisions. Devki’s competitors in the various segments include Insteel, Mabati Rolling Mills and Kikuyu Rolling Mills.

He harbours a goal to make Kenya self sufficient in steel production despite the fact that the main raw material, iron ore, would have to be imported from country like South Africa, China, India and Korea. The company presently imports 20,000 tonnes of iron ore per month but Mr Raval is still feeling pain for consumers because of rising commodity prices in the international market.

“The prices are going up and the shilling is depreciating. Consumers suffer because we have to pass on the costs to them,” he said.

He called on the government to create an incubation centre for the steel industry to help the country realise its 2030 industrialisation goals and make the proposed higher gauge rail feasible. Under the scheme similar to India’s, raw materials would be imported duty free, striking a balance between protecting small manufacturers under the EAC customs external tariff and making products affordable to consumers.

With many family businesses unable to survive the founder, Mr Raval has a succession plan already in place with his eldest son doing internship at the world’s largest independent steel trader, Stemcor Holdings, in London before joining the business in August next year.

“Internships are important. Parents also need to invest more in relevant education for their children in production line courses such as engineering, not just B.coms and MBAs,” he said, saying firms are now forced to train people on skills needed by the industries.

As chairman of the group he is not engaged in the day to day running of the businesses but still gets to the office by 8.30 am with his schedule largely punctuated by what he calls networking meetings.

“You have to withdraw from management gradually otherwise the business will die with you. You also have to set up a professional management team,” Mr Raval said. He has left the decision making to the managers who file production, sales and collection records for his perusal every day, except on weekends.

With buildings having collapsed recently because of poor workmanship and lax enforcement of standards, Mr Raval says slaps are not left to cure sufficiently.

While blaming the municipal authorities and inspectors for the safety lapses, he says the approval criteria needs to be involved to include soil bearing tests. The company is presently conducting seminars for contractors aimed at ensuring developers do not take short cuts.

He also says ratios of materials used during construction should be verified by an independent body even after the buildings are completed.

Believing corruption is behind the collapse of buildings and most ills facing Kenya, Mr Raval, who describes President Kibaki as a friend of 20 years, longs to be at state house for just 30 days.

“I would end corruption and ensure funding goes directly to projects. Unemployment would be a thing of the past,” he says with a glint in his eyes that suggest this would be his highest moment.

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