In many ways, Rizwan Sajan has literally helped build Dubai.
As the billionaire founder and chairman of Danube, one of the emirate’s most successful business conglomerates, he has supplied building materials to just about every development since the property boom began.
The company is now the undisputed market leader in building materials in the emirate, created through years of astute growth under Sajan’s leadership. Danube also is evidence that Dubai’s property market is back: “The business doubled in the past year,” Sajan says.
And some business it is: today the Danube group is a sprawling empire with 38 offices spread across the Gulf, India and China, with 1,800 employees and revenues on track to touch a billion dollars by 2015.
If that is not enough, he is now also dipping his own toes into real estate, launching Danube Properties after much urging from friends. The development arm’s first project, Dreamz by Danube, sold out in hours.
Like most Dubai expat success stories, Sajan’s started from small beginnings to become number 21 in the latest Arabian Business Indian Power List.
When former Iraqi leader Saddam Hussein invaded Kuwait in 1991, Sajan, then 28 years old, had been living in the country for ten years, working for his uncle Moses Jacobs in his brokerage business, Atlas Commercials. Sajan says he has never forgotten what he learned from his uncle.
“I started as a salesman, but when I left him — I was his right-hand man — I was managing his business,” Sajan says.
“He has taught me everything that I know today.”
Following the invasion, Sajan fled to Dubai where he continued to work for his uncle for a year before branching out to establish his own brokerage business.
“I would buy [building materials] and sell it on and get a commission,” Sajan says.
“I knew exactly what building material we could buy [and] we could sell; I knew all the companies overseas and buyers I had to find over here.”
But it was tough to make headway in the early years.
“It was a very difficult period for me when I first came over here because all the buyers were directly connected with all of the sellers and they would say ‘why would I need you?’ and ‘why would I pay you commission?’” Sajan says.
“But somehow I made my roads into it with one agency and I started selling to all the connected people.”
The next hurdle was finding cash so he could start trading and grow the business.
“I didn’t have the money but [I had] a very good and clean reputation over the previous 10 to 12 years working in Kuwait and [Dubai] so the suppliers who I was dealing with, I told them to give me some on consignment basis and I’ll sell material for you. That’s how I got into the trading,” Sajan says.
In his first year of trading he turned over AED8m ($2.2m). “In building materials, the volume is always high,” Sajan says.
His first warehouse, in Sharjah, was only 5,000 square feet (sq ft) and so basic he had to use the building’s lift to help load materials onto a cart to be transported. He did not even have a truck.
Bit by bit, Al Danube — as it was known then — grew, with Sajan always keeping an eye on the wider picture, looking to see where he could expand to next and always trusting his innate business sense.
“What was important was that at every stage in my life I took a different risk, a different turn where a calculated risk was taken,” he says.
“Somehow I think that I had God’s gift of business sense. I’m not a very well-studied MBA type of a person or a BComm graduate but I had a sense of whether this is going to work or not. The calculated risks that I started taking gradually [started to pay off].”
Those risks almost always involved branching out into something that none of his competitors were doing.
The first was timber, where he expanded into different species such as ash, oak, cherry, maple and beechwood when no one else was.
“That gave me a little bit of difference compared to what my competitors were doing,” he says.
A chance meeting in a bank saw him take AED1m worth of medium-density fibre board (MDF) from a tile importer who had taken the delivery by mistake. He on-sold it for a 50 percent profit, and there started Danube’s MDF business.
The company now has its own factories in Jebel Ali and China, manufacturing MDF 24 hours a day.
It is an example of how Sajan takes an idea, makes it successful and creates another arm of the business. It left Danube well placed to soar during the construction boom, between 1997 and 2008.
“It used to grow by 40, 50, 60 percent every year. There was unbelievable growth. We took this facility in Jebel Ali almost 20 years ago,” Sajan says.
“When we took this office, we had taken only 225,000 square feet. It was huge at the time and I didn’t think we were going to take any more.
“But today, in Jebel Ali itself, we have 2 million square feet (almost nine times the size), plus in Techno Park we have another half-a-million square feet of warehousing.
“If I take any banker around, by the time he finishes he’s really sweating. It’s like a big jungle of building material.”
When the crash came in 2008-09, Sajan proudly says the business grew by 25 percent.
“The policies of the company have been so well laid down — we’ve invested well in HR [human resources], logistics and most importantly, the credit control department,” he explains.
The crash also coincided with his decision to open Danube Buildmart (now called Danube Home) – a retail showroom, selling building products like you would sell goods in a supermarket. Based on the models of international do-it-yourself retailers B&Q and Home Depot, it turned out to be a timely development.
“When I opened my first showroom, we were in the peak of the recession in 2009. I didn’t know whether I should go ahead and open it or stop the expansion, but I took the risk and it started paying off, because there was nothing like that sort of concept in the UAE,” Sajan says.
“Buildmart allows a person, like you and me, to buy building materials like you would be buying electronic goods or furniture like you would in a department store.”
It is safe to say that practically every development in Dubai since then has used Danube for its materials.
“It’s the number of items that we are dealing in and the number of branches we have,” he says. “Today, if you look at it in the UAE, we have 19 branches. We even have one in Dibba [northern tip of Fujairah]. In every corner you’ll find a showroom of Danube, with all of the varieties that you’ll want. There is no other competitor that has so much variety.”
Recently, Danube moved into the eCommerce market, with an online shop, handled by Sajan’s son Adel.
“It’s doing okay, still a lot of work there yet. It hasn’t picked up the way we want it to pick up because to people in this part of the world, online is not that popular. Hopefully, in the coming years, if we give the focus to it, it will pick up.”
The company’s turnover has grown from those early days of AED8m to an expected AED2.5bn this year, while profit is expected to double compared to last year.
“What we created [in profit] in the whole of last year — this year the profit will be equal to the last six months,” Sajan says.
Expansion of the Danube network also continues, with more showrooms opening each year. There were plans to explore the markets in Egypt and Libya, but the uncertainty in those countries swiftly ended that. He has, however, moved into the African market. “We opened a showroom in Kenya and that’s going fantastically well, because the margins there are huge,” he says.
In India, he decided to go with the franchise model, with 16 branches open across the country. “It’s a big market and I don’t think I would have been able to manage it. It’s not a simple market. It’s a very tricky market,” he explains.
Recent talk of a possible bubble has not dampened his expansion plans. Danube will open some of the region’s largest stores in the coming months — a 50,000 sq ft store in Riyadh; 45,000 sq ft in Sharjah and 38,000 sq ft in Oman.
In fact, when it comes to a bubble, he welcomes it.
“I enjoy the bubble every time it comes because we are in a much stronger position than any other competitor and immediately we are able to move what is available and buy at the lowest prices and get back into the market,” Sajan says.
Danube’s strength lies in its network and the ability to sell materials quickly, thereby allowing it to buy again at the lowest prices.
It was that strong brand that led Sajan to make what many have described as a long-awaited move into property development. He says he had delayed the decision because of concern over the instability of the market during the boom years of 2006-07.
“[Now] they [the Dubai government] have created a very good RERA department which has imposed a lot of controls for a developer — how you launch a property, how you sell a property — and I said this is the time,” Sajan says.
Launched in June, the $136m Dreamz By Danube project will contain 171 three- and four-bed townhouses within the Al Furjan community when it’s completed in 2016.
Billed as “luxury living at affordable prices”, the project sold out within three hours – thanks in no small part, he says, to a strong marketing campaign.
Buoyed by that success, he is ready to return with the next phase of Dreamz By Danube “before December” — another AED500m project that is expected to include 170 villas (100 are currently committed). Before that, Danube Properties will unveil its 1,000-apartment project in Studio City.
Sajan has no concerns about a possible bubble in the property market.
“I’m doing one property development at a time. I’m not buying a land bank, and keeping it in reserve,” he says.
“I’ve sold one property [development], bought another part of Furjan, and bought another for apartments. Only after I sell this, I will look for the third project and the fourth project. So even if there’s a bubble, it’s a very calculated risk that has been taken.
“I personally feel that the second project will be sold as fast as the first project, because we already have very strong vibes.”
Sajan insists, however, that he has not sensed any bubble on the horizon, just a correction.
“I don’t think there’s anything coming. Okay, there might be a little bit of correction here or there — the prices went up after the Expo 2020 [win] by 40 or 50 percent, and they have come down by 10 or 15 percent,” he says.
The move into property is the latest by a man who does not sit still in business for too long. The drive to succeed in everything he does has brought rich rewards, but he insists he doesn’t delve too deeply into the luxurious side of life, despite owning houses in Emirates Hills, Palm Jumeirah and four in Dubai Marina.
“If you come to my house, it’s not that you’ll have some branded, different types of paintings — the luxury is there, but there’s a way how you flaunt the luxury,” he says.
“Everybody would be wearing a Gucci or Armani suit going out. I don’t fancy that; I would rather go and stitch my AED3,000 suit and be happy about it.”
The Rolls-Royce Phantom parked outside his office window was a present from his brother (and work colleague) for his recent 50th birthday. Most days Sajan still prefers to drive his Range Rover, upgraded with each new model.
Considering the vastness of his empire and the company’s considerable growth in its 21-year history, there is a refreshing humility about Sajan and an appreciation of where he has come from.
Relaxing and getting away from the business side, he enjoys cruises all over the world (“we still have to try the Bahamas”) and loves cricket (legendary Indian cricketer Sunil Gavaskar is Danube’s brand ambassador). His morning starts with a swim and yoga because “it energises me for the day”.
There are no plans to slow down any time soon and the appetite for growth remains strong.
“Every day, for me, I keep thinking what’s going to be next. It’s never that feeling ‘okay, now I have enough and I should stop’.”
What’s in the name?
Founder and chairman of building supplies company Danube, Rizwan Sajan explains how he was inspired by the River Danube.
“[I called the company] Danube because we used to buy a lot of timber from Romania and I used to go in that small river and bring the timber on barges,” he says.
“The River Danube was always in between where we used to go and I liked that name.
“We tried to get that name certified [in Dubai] and they wouldn’t do that. Then somebody said make it Al Danube and they will probably approve that name. At that time, Danube was an English name, and we should probably have some Arabic connection, so I put Al Danube and they approved that.
“And of course now we only use Danube — the Al Danube has slowly gone.”
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