It all started with a bunch of keys

Pradeep H. Paunrana, MD, ARM Cement Ltd. Photo/DIANA NGILA
Pradeep H. Paunrana, MD, ARM Cement Ltd. Photo/DIANA NGILA 

We meet at ARM Cement offices on a Saturday morning. Pradeep is looking dapper in linen and chinos. In the boardroom where we meet is a large portrait of his father, whom he resembles uncannily. Pradeep is a windy and enthused storyteller.

He’s also impressively educated; Financial Modelling and Cash Flow Accounting from Manchester University; MBA from New York University’s Stern School of Business. He frequently gives talks on building businesses in Africa at the London Business School, Columbia Business School in the US among others.

He joined his father in 1984 to help run the business (formerly Athi River Mining Ltd) that is now in the top 10 largest companies in Kenya, and in the top 25 best performing public listen companies in Africa with shareholders in New York, Singapore and Johannesburg.

That’s a very nice shirt you have on!

Oh, thanks. It’s linen. It was popular in the late 70s. I prefer a practical look to a fashionable one, and I don’t pay too much attention to how I dress up. In fact, most people say I don’t know how to look rich.

Talking of riches, on a random Saturday like this, how much money would you be having on you? Like right this moment.

(Pause) In terms of money? (Pause). Put it this way, I’m practical; I will work today until about 3pm then leave for a swim at home, maybe use the gym, then dinner with friends later. (Pause). I don’t know how much…(trails off).

You are being modest. Look, there is only one rule here, if I ask an uncomfortable or intrusive question, you can either choose not to answer or answer it off the record and I will respect that.

(Smiles) I have very few secrets. I’ve built my business and life on transparency and so I have little to hide. When we decided to go public with this company, we decided that paramount to our business was to give confidence to our partners and stakeholders, our policy therefore has been to offer all what they see.

You studied something called Financial Modelling, it sounds very glitzy, what is it exactly?

Whilst at University (in 1980- 81), I developed a passion for cash flow accounting and wrote my own code for financial models. We now use spreadsheets and ERP systems to manage a very detailed and real time financial model for our company.

To illustrate: we can track sales of Rhino Cement at a hardware shop in Kisii on a daily basis. If sales go up or down, we immediately know the impact it would have on our cash position at the end of the month.

Similarly with expenses, if some cost increases even marginally in a particular activity, we are able to track its impact on our monthly profit, and be able to take action in real time.

You have built something good here, haven’t you?

I think so. I quit a good job in the States to come back and help my dad run this place, that was in 1984. When I sat down with him after landing, he told me that he needed me to show him what I could do with the company, and he slid a bunch of keys across the table, that symbolised him handing over total control of the company to me, which was an unusual thing for a ‘mhindi’ father to do during that period. Our turn over then was 6 million. Now we are doing 14 billion.

How was your relationship with your father as a businessman?

He was supportive, we had a fantastic relationship but the first two or three years we argued a lot but 90 per cent of the time, he was right. He taught me what isn’t taught in business school, that is emotional motivation.

He taught me that the biggest challenge is how to inspire people to believe that by being a part of your vision, they can achieve their own dream and add value to their lives and family. Leadership is about the heart not the brain.

How were you like your late dad?

We were both introverted. Shy. You will hardly find me at parties; I seek comfort in small company.

How are you unlike him?

He was far more intelligent than I am. I’m short tempered. He was resilient and always knew tomorrow would be a better day. I’m a worrier. I’m in this habit that when all is going well, I worry about what will go wrong. My dad was calm.

You have kids?

Yes, four. Three girls and one boy. Navishka, my eldest daughter worked at ARM for four years, and has just started a two- year MBA programme at the London Business School. She will come back to work at ARM.

Meera, my second daughter, is a business graduate and just completed a two- year contract at Citi Bank in London and has joined a software company specialising in financial services, also in London, heading a team of several people in IT-based product development.

My third daughter is studying law at Durham University, and my son is just starting an Engineering degree at UCLA.

Will you also, symbolically, slide a bunch of keys to your son when he graduates?

Attitudes have changed now. I have girls who are equally ambitious and capable of doing what my son can do. I’m a 50 per cent shareholder of the company and the company has a strong succession planning policy.

The person who will take over the running of the company will be decided on merit and contribution and not because they are my kids. We need to safeguard the company by making sure it’s always in capable hands.

What’s on your Bucket List?

I made my list when I was 23 and I have achieved everything I had written on that list.

What do you live for then?

In 2007, when we celebrated our 10th anniversary as a company by being listed on the stock exchange, I stated that as we grow business in Africa, our success would be measured by not just the financial growth but our ability to contribute positively to the community.

We now have the Rhino Cement Foundation, supporting poor kids through education. I contribute about 1 per cent of my income to this foundation and about two per cent of the income made by ARM every month. So it all goes to education, environment and health. That’s what I live for now.

What is your idea of fun, when you aren’t thinking about business?

I like bird-watching. I’m a keen birder. I also love photography, so I will take a few hours to engage in that. You will rarely find me playing golf. I also spend time with family and also gardening.

In the next life, what would you like to reincarnate as?

Steve Jobs said the best invention of life is death. We know we have a finite time to do our best, to be successful in whatever we do and to enjoy a life of fulfilment. And for me, this is the one chance to try and help others to achieve success and fulfilment - being significant in the lives of others is the true measure of success in the life we have.

What’s your greatest fear?

The company going wrong, business collapsing. This is why the leadership of this country is key.

Do you sleep well?

Really well. I do six hours.