Best of 2012: Ram Buxani interview

Ram Buxani, president of ITL-Cosmos Group, tells CEO Middle East about how he went from office manager to co-owner and president of one of Dubai’s oldest trading firms
Business empire Ram Buxani’s ITL-Cosmos Group has operations in Oman, India as well as the UAE
By Claire Valdini
Wed 04 Jul 2012 03:06 PM

“When I joined the company 52 years ago, I didn’t think as an employer, I thought as the owner. I would get very angry if a colleague misbehaved or did something wrong but I didn’t tell my boss, I would handle it as if I was the boss,” Ram Buxani laughs.

Little did Buxani know that five decades after arriving in Dubai to work for the Asian textile merchants ITL Group he would go on to become not only one of the company’s longest serving employees but also its president, co-owner and one of the UAE’s most successful non-resident Indians.

Buxani’s arrival in the emirate and his choppy five-day ship journey via Muscat, Karachi and Gwadar has been well-documented. He laughs as he remembers landing on dry land and heading straight into the office and how, just two years later, the same ship that brought him over ended up at the bottom of the sea. In 1959, when the Hyderabad-born Buxani applied for a job as an office boy at the company, he couldn’t even have pointed to Dubai on the map.

“I told my brother, who was living in Hong Kong at the time, that I have got the job in Dubai and he said ‘why on earth are you going there?’ Do you even know where it is?’ I told him I was going anyway,” he laughs in hindsight. Buxani remembers Dubai not as the vast metropolis it is today but as “a small and cozy town” which meant him doing “everything from writing letters to getting business and delivering the mail”.

“Dubai was the land of opportunity; it always has been the land of opportunity but it wasn’t as challenging as it is today. Now it is both the land of opportunity and the land of challenges,” he adds.

The ITL Group, as it was known then, was founded in Mombasa but expanded its operations to the Gulf, firstly to Bahrain and then later the UAE in a bid to liquidate excess stock in 1958. Buxani was hired by Murij Manghnani, the man charged with overseeing ITL-Cosmos Group’s Gulf operations and its other current co-owner.

The Dubai-based firm, which today is known as ITL-Cosmos Group, now has operations in Oman, India as well as the UAE, was the first company to receive an official trade licence by royal decree, says Buxani. “Neither the municipality or any trading authority gave licences, you would just come here, identify a shop, put your board up and start your business,” he explains.

“The company approached HH Sheikh Rashid Bin Saeed Al Maktoum and he said we would like to have some written permission from you so he issued a charter or a two-sentence decree and that was the first decree given by the government of Dubai to a trading enterprise.”

Over 50 years later, the company is still the proud owner of the number six PO Box in Dubai and is one of the emirate’s longest-serving firms. In addition to its textile business — which still accounts for around 60 percent of its revenues — ITL-Cosmos also has franchise deals with several electronics and watch retailers including Sharp, the Japanese clockmaker Rhythm and Remington, as well as real estate investments and a money exchange house, Al Razouki International Exchange Company.

Buxani started acquiring shares in the firm 30 years ago, seizing the opportunity to build up his stake over several decades.

“I started getting a profit share after three years in the company and then around 30 years ago, I started investing in it, gradually. Some of the [former] shareholders needed the money so they exited while others passed their shares onto their children who sold them,” he explains.

“This organisation is 125 years old, so one by one people passed and the survivors went on. Today, I am the president and own 50 percent of the company.”

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Buxani declines to reveal any profit or revenues for the privately-held firm today but a 2011 Indian Rich list by CEO Middle East’s sister publication Arabian Business estimates his personal wealth to be around $235m. The firm, which employs 160 staff, continues to supply most of the city’s textile shops as well as some 500 authorised dealer outlets across the Gulf state but little has changed at its headquarters, which still pays homage to its roots. The 1970s-style office is tightly packed with retro furniture and its walls filled with black and white photographs with Buxani pictured beside India’s former prime minister Indira Gandhi and former Dubai ruler HH Sheikh Rashid Bin Saeed Al Maktoum.

Its offices might look somewhat dated but in Dubai’s glittering shopping malls and Deira’s bustling textile shops, ITL-Cosmos Group’s business remains strong, much of it down to a decision made early on that it would only work with well-established brands. Over the years, its franchise partners have come and gone amid the ever-evolving world of electronics. It was, for example, forced to stop selling Minolta cameras and film when the Japanese firm announced in 2006 that it was leaving the camera and photo business after selling a portion of its SLR camera business to electronics giant Sony.  “In those days any agency was easily available. Our chairman had a very close relationship with Sharp so he suggested we do business with them — we didn’t have a clue about the electronics business,” says Buxani.

“We started, received consignments of radios, two-band radios from Sharp, record players and then televisions. Back then, Dubai didn’t have any televisions so we started stocking black and white televisions. That’s how our own growth started,” he adds.

“If you talk about non-textile products, we actually started with watches; in those days Titoni watches were very famous in India. We had three basic markets which we would focus on; Iran would take everything from textiles to foodstuffs and carpets while India and Pakistan would take gold and textiles.”

ITL-Cosmos Group’s electronics business might have flourished in the early years but Buxani says the firm is struggling to maintain sales amid increased competition from the likes of Apple and Samsung. “LCD [televisions] are giving the majority of the losses. Sony lost $7bn last year [after a year of economic turmoil and floods and earthquakes] while Sharp lost $4bn in one year,” he says pragmatically.

That aside, ITL-Cosmos has continued to evolve and grow its business. “We continue to do well in textiles. We are comfortably amongst the top two [distributors of] textiles in the UAE. We do not have our own retail outlets, we don’t have a face, we are in distribution so most of the textile shops buy from us,” he says.

In 2012, Buxani is aiming for around ten percent growth and may look at expanding into the ever-popular tablet market.

“In spite of the current economic situation, we are growing at least ten percent with textiles making up a large proportion [of our growth],” he says. “I would like to go for the tablet business. That is going to be the product which has volume and the market so it’s something we have to move on.

“Our business has changed so much, just take electronics as an example. The system, the products have all changed [over the last five decades]. We have to grow in all of our businesses but I would say we will be growing in our financial business. I feel the local and global bond market is doing quite well. If you invest in bonds, you have an assured income and at the same time assured money back,” he continues.

“I’m not too concerned about the economic situation in Europe. I have lived here for 52 years now and during that time I have seen so many ups and downs, problems in Iran, Afghanistan and economic turmoil…. The way the UAE is managed I don’t think it’s a great concern. We have to put a lot of confidence in the local rulers,” he adds.

What the long-term future holds for Dubai’s ITL-Cosmos Group, however, is unknown. The 71-year old, who still spends at least half a day in the office and remains very hands on, is somewhat elusive about the company’s plans for succession.

“Maybe fifteen years ago I used to think about [giving it up] but whenever you want to go, you go. I come to my office after lunch, 1.30-2pm so I have the best of both worlds. I do need to make a plan for succession. People tend to feel that this is too early and all of a sudden it comes too late... It’s not a family-run business but I think someone has to be involved in that. I always consider a business as fun and work as fun,” he says.

What will happen to one of Dubai’s oldest companies could be anyone’s guess.

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