When he first came to dubai in 1990, Yogesh Mehta wasn’t feeling too great about himself, he confesses. “I had just failed my business in India, I couldn’t pay my debts, and had borrowed so much that other lenders either didn’t want to give me any more, or I was too proud to ask,” he says. “I was a failure.”
Nearly three decades later, Mehta is jovial, energetic, and fun. By chance, at the studios that Arabian Business and CEO Middle East call home in Dubai, he’s stumbled across an old Petrochem drum and couldn’t be happier at the coincidence; he’s come in for a photoshoot with his son, Rohan, and what better way to celebrate his good fortune since the fateful 1990s than with the name of his company emblazoned on one of the many drums with which he’s built a billion dollar company.
The picture on the left was the elder Mehta’s idea. He built Petrochem from scratch and raised his son while he did it. That’s not to say that Mrs Mehta wasn’t essential to the process. However, at thirty years old, Yogesh Mehta owed everyone a debt. A few days later on the phone is when he tells me, “I had to sell my wife’s jewellery to make ends meet. Can you imagine that… to feel that your wife must also think you are a failure?”
Today, Mr and Mrs Mehta name Indian designer Manish Malhotra among friends – he’s styled the outfit worn by the 59 year old billionnaire on the list of richest Indians in the UAE covered by Arabian Business last month (log onto Arabianbusiness.com to read it in its entirety). But the two sides of Mehta’s history are bridged by a generation of lessons – and an MBA at Harvard Business School. “And I’ve never stopped learning,” he says.
More than 23 years after building the Middle East’s largest chemical distributors Mehta is looking at his son to push the company towards its next journey. 31 years old, Rohan Mehta is heading business development at the company and is also “looking for markets that Petrochem could grow into.”
This is important, because for a while Petrochem’s chairman has been interested in an initial public offering for his company that generates $1.4 billion in revenues. Last month however, he announced that Petrochem would hold off on any such plans until 2022.
“We are watching the IPO market, but this is not the time to do it. The markets are not ready at all, they will erode our value,” Instead Petrochem will look to “acquire chemical specialty companies in the $100-$150mn range. Rohan is on the hunt in fact looking for markets that are lucrative for us,” says Mehta.
What Petrochem could also do is build storage terminals around the Middle East and maybe Egypt. “If we do that we could distribute further,” he says. However, any plans to do so aren’t “concrete yet,” he says. “But we’re considering them because being able to distribute multiple products closer to our markets would increase our value.”
It’s obvious that Mehta’s mind is constantly churning in terms of possibilities. But he is also keen to understand how the mind of his son works, not just in terms of allowing for trust, but because his age and generation allow the Mehta Sr. access to all new information. “I think I’ve learned more from him than from myself,” he says. “The young are smarter and more educated about the wider world. They’re nudging us and are guiding us even if we don’t want to be guided away out of being stubborn.”
How you’ve described a key determinant to your success is very rare to hear..
YM: Probably because of how traumatic it can be. It’s very tough to accept that you could be a failure. But between 24 and 30, that’s what I felt like. I was a small trader, my business failed, and my son had been born. I couldn’t pay bills, or debt. The last recourse required seeing failure in a way that was traumatic. Even more traumatic was realising that your ideas don’t work. The frustration can make go into bad ways, but I found a way out. And I’m glad it happened earlier instead of later to be honest.
How did you do that, find a way out?
YM: With ambition. I wanted to be a tycoon with offices around the world. But I was living in tomorrow and waited for it to appear, and when it didn’t appear is when I couldn’t believe it. So I decided to make it happen, and I can tell you, you only succeed because of will. Only you can feed your family.
You don’t seem too bitter or traumatised by the early days?
YM: My nature is very curious. I’m quite excited about the new world, I’m very passionate personally, I like dance drama music culture. I breathe life in every dimension. I’m 59, I’ll only get older, but it’s a pleasure to grow older while enjoying the fruits of your success. I love the pressure and stress as long as there is a happy ending. Trials and tribulations are important. But when you’ve seen a lot of success it makes you more confident about riding the storms as and when they come. I’ve gained emotional intelligence. Trauma and failure in your early life teaches you how to keep you on your toes.
You went through one other tough period in your time was it not in 2014?
YM: Oh yes, in 2014.
What happened then?
YM: In 2014, we were doing things the same thing as in 2010. In fact we were buying on a pattern that we adapted seven years ago, buying volumes that we thought the market needed. And of course while we aided the oversupply, we didn’t see the competition from those with smaller over heads, and laxer service quality in Saudi Arabia, Kuwait and elsewhere. So 2014-15 were our worst years economically speaking.
What has changed since?
YM: In terms of the economy, nothing. The world fell off a cliff in 2014, but no one has realised it. People are thinking it’s a one year blip and that the rest is fine. Well it isn’t fine, this is the fifth year. I’m a strong advocate of saying that the good times are over. When we began, life was a bed of roses and the UAE experienced a boom that went from 1992 to 2014, other than a year in between. But this is not a temporary play. This is the low margin era, so increasing profits means growing the top line.
Why do you say that?
YM: Early on, the Middle East was more dependent on imports than it is now. Saudi Arabia and the UAE have since turned into hotbeds of manufacturing, whether chemicals, steel, infrastructure, or materials. China did this decades ago and became a factory of the world, single-handedly oversupplying the world. This is now being duplicated in India which used to be tech deficient and is now tech efficient. So now there is an over-supply. The Middle East and India, are producing enough for themselves, but the rest of the world, including the greatest super power, who will they sell to? Also, technology has changed the nature of the game in terms of information dissemination. The world is growing smaller with AI, the internet, and social media. With how fast information spreads, you can’t capitalise as you used to, people now know everything immediately.
Why isn’t access to technology helping yet?
YM: We will need new skill sets to compete in the new world. This is not temporary, companies will need to fight to compete and survive. AI alone is going to bring a whole set of new dynamics into play but we don’t have the skills or education to harness it yet. It’s something I dread, and profess, in my lecture circuits, that the competition that we will have in 3-5 years isn’t even born yet.
Your son Rohan comes from a generation that is also spelling a lot of change. What advice do you have for him, and consequently the millennials?
YM: What has happened to the benefit of millennials is that they are more educated, can create new opportunities, inventions, and business models that can create more margins and profits. Disruptive tech can make them millions; after all look at Uber, Flipkart, and the iPhone. These didn’t exist back in the day. The companies facilitating those kinds of inventions are the ones that will now and in the future succeed.
Is there something about the world today that you warn him to be wary about?
YM: I’ve learned more from him than from myself. But it’s a fact that in our times people were honest, credible, and less hostile. The ethical makeup has changed now. People are more matter of fact, ruthless, maybe even soulless. For millennials I’d say it’s always good to have an older senior mature mentor. But it is up to the young to make time for them.
Having spent eight years in the US studying and working, Rohan Mehta returned to Dubai nearly six years ago to join Petrochem. All of 31 years of age, with a little one of his own in tow, Yogesh Mehta’s son is still in awe of his father “It’s such a giant,” he says of the company. “Operations everywhere in the world, supplying products to every industry, it really is incredible what he has built,” he says.
You’ve spent half a decade at Petrochem now. What has your experience been like so far?
RM: It’s a massive volume and super low margin business. And we have customers in any manufacturing or packaging industry. Add to that we’re spread all over the world. My dad runs the trading (buying) business, I take care of distribution, but there are other aspects to it as well such as supply chain an logistics and others. Now we have roughly 250 products, so the first year in the company was spent simply learning about the products and customers and the distribution. And I’ve been adding to that knowledge ever since.
At some point will you invest in shipping lines?
RM: We have always had distribution in Saudi coming out of Dubai. But now we will be doing distributing in Saudi and have our stores/channels in Saudi. That is to be a lot closer to our customers. In terms of revenue and volume, we are the biggest distributor in the Middle East and Africa when it comes to the petrochemical field.
Have things grown since 2015?
RM: Things have not grown. But we found ways to grow our business. So business has grown. Our revenues are higher, because we have ventured out to the world, we are selling to South Africa, Australia and Latin America, which is a new massive market for us. The margins have gone down. The profit levels have gone down, or rather they are lower than what they were when Dubai was booming. It’s just the new normal. We are making good money, we are growing well. Customers trust us and rely on us. We have a great reputation and people like the business we do.
How do you feel about taking over from your dad? Is it worrying?
RM: It is a good worry. The good life comes with these kind of burdens. My dad has never been too tough on me. He never made me feel insecure or like I’m not working hard enough. But I think he sees that I have the inclination, that I really want to grow as well and that I’m super ambitious. It took me 2 years to find my way. It took me 2 years to learn to add value. But for the last year and a half I’m just trying to manage. To kind of tweak the corporate culture a little bit. That’s what I’m focusing on right now.
Are you going to consider verticals beyond petrochemicals?
RM: Currently we are looking at diversifying. We are looking into different things. Growth innovation will be our thing for next year. My plan for the next 5 years is for us to look at growth within the chemical industry.
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