Nepal's first billionaire

Binod Chaudhary, is back investing in Dubai, but his heart is set on helping the business leaders of tomorrow at home
By Courtney Trenwith
Fri 03 May 2013 11:28 AM

In Dubai, Binod Chaudhary blends in as one of many businessmen with stakes in iconic projects, such as the man-made group of islands, The World. But 3,000 kilometres away in the Himalayas, Chaudhary is a national icon.

Recently named the first Nepalese billionaire by Forbes magazine, the 58-year-old has risen to superstar status as president of family company Chaudhary Group and chairman of its international arm, Cinnovation. Based in Nepal and Singapore, respectively, the companies have a total of 93 businesses and 50 brands across food and beverage, real estate, hospitality, power, cement, retail and electronics. It also employs 7,500 people.

Chaudhary Group is probably most well known worldwide for its dried noodle brand Wai Wai, which annually sells a billion packets in 35 countries. The group’s investments span from Africa to the Maldives, including a partnership with India’s Taj Hotels Group, a stake in Asian luxury boutique chain Alila and a controlling share in Nepalese-based Nabil Bank.

When news of his billionaire status broke out in March, Chaudhary was in Dubai checking up on Cinnovation’s $100m worth of investments in the Middle East and staking out new opportunities as he prepares to treble the company’s portfolio in the region. The emirate is the company’s regional hub for distributing fast-moving consumer goods (FMCG) such as Wai Wai noodles, other processed foods, soft drinks and tetrapaks. It also owns one of the islands in Nakheel’s The World development.

When Chaudhary meets with Arabian Business, he appears not to have a care in the world, perhaps buoyed by his new title: billionaire.

“I feel very good,” he says. But it’s not self-pride that emanates from this astute businessman; it’s the simple pleasure of bringing honour to his rarely-acknowledged country. The internet is awash with the name Binod Chaudhary but none of the news stories and social media postings fail to mention his home country.

“I think this is the single biggest event that has happened in Nepal in recent history, which suddenly lifts Nepal and places it on the global map as an indication of global-level prosperity, so everybody is associating,” Chaudhary says.

“They all associate this with the self-respect and honour of the country; it’s not a question of Binod Chaudhary. One Nepalese has made it to that level, otherwise who thinks of Nepal as a country where you have a world-class corporate. I feel I’ve been able, to a large extent, to pay the debt that I owe to the country for giving me the identity that I have today.”

Chaudhary Group has evolved over more than a century. Chaudhary’s grandfather Bhuramal Chaudhary was a textile trader in Rajasthan, India, before migrating to Nepal in the nineteenth century and opening a small textile store that supplied goods all the way up to the king and queen. Taking over, aged 23, Chaudhary’s father, Lunkaran Das, then showed his own entrepreneurial spirit, expanding into importing and exporting. He later converted the textile shop into Arun Emporium, Nepal’s first department store in Birgunj, on the border with India.

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Chaudhary, the eldest of three children, joined the family business when his father developed a heart condition, forcing the eighteen-year-old to give up his plan to study accounting. Over the next four decades he added hotels, a cement company, dried noodles brand Wai Wai and a gamut of real estate projects to the company’s portfolio, taking its footprint to nineteen countries.

In 1995, he bought the Dubai government’s controlling stake in Nabil Bank, Nepal’s first international standard bank in which the emirate had been an initial joint venture stakeholder. After a ten-year hiatus in the emirate, he returned, this time to take part in the booming real estate market and establish a Middle East and Africa hub for Cinnovation’s activities.

But plans to expand in the region were quickly put on hold when the financial crisis hit. Hopes of building a luxury resort similar to his successful hotels in the Maldives on one of The World islands — Chaudhary bought the island Nova Scotia in 2008 — are still yet to reach the design stage. Built by the Dubai-backed developer Nakheel, the archipelago is still largely abandoned 4km off the coast of Dubai. With no infrastructure, nor a plan by Nakheel to provide any, the islands are close to worthless.

“We know we can create something very interesting and very different and that was the vision when we entered in this island [project],” Chaudhary says. “We are waiting; when it becomes important for Nakheel to do something about The World I’m sure we’ll engage.

“Nakheel feels that it’s not [their] problem. [They think] ‘We’ve sold and you’ve bought and it’s your responsibility’. The developers feel that the ground rules have changed, the market values have changed [and] there are technical issues. So [Nakheel and the developers] have to come forward to find a solution.

“[But] the level of excitement that we had when we bought, to be honest, it’s not there. It would be such a shame, both for Nakheel as well as for Dubai [if the islands were not developed].

“The Palm, the Burj Khalifa and The World, I think, were some of the iconic developments which conveyed a certain message to the whole world about Dubai.

“Dubai should live up to its expectation. [But] I don’t get any signal that it is anywhere close to Dubai’s priority.”

But while his first foray into Dubai has not gone completely to plan, Chaudhary has new ventures up his sleeve and this time he’s looking beyond real estate. The region presently makes up less than five percent of the Chaudhary Group’s portfolio, but with nearly one-third of its new investment coming here, that’s expected to rise to fifteen percent within a few years.

Chaudhary’s middle son, Varun, has relocated to Dubai to manages Cinnovation’s assets across the Middle East and Africa.

“We were very gung-ho on the Middle East and we still are,” Chaudhary says. “[The financial crisis] was a phase, that’s all. Now it’s over and that’s why we are back here. We are confident that Dubai, with the world-class infrastructure it has built as a city, the working culture it has built as a business/financial hub and the positioning that it has been able to do globally, is very well poised to move to a new level for companies like us.”

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Cinnovation is “seriously” exploring manufacturing opportunities in Saudi Arabia and Qatar. It presently only manufactures in Nepal and India, with plans to also expand to Africa.

The company manages about 30 hotels, resorts and retreats across Asia, from three-stars to a unique detox and wellness farm in the Philippines. Chaudhary has plans for four or five hotels in the GCC, including in Dubai, Abu Dhabi and Oman, which would most likely carry Cinnovation’s luxury branding, Alia. He is in talks with the Sharjah government to open an expo hotel there, while the first Zinc City project — a “value-for-money” boutique hotel — is due to open in Dubai this year, with the second in Sharjah next year.

Chaudhary believes the UAE’s vast landscape and proximity for international travellers also makes it a prime location for his second detox and wellness farm, while he is also seeking a plot to build a hotel at master developer Limitless’ Downtown Jebel Ali.

Chaudhary also sees an opportunity to delve into the education sector, a market he’s familiar with in Nepal. He’s already in discussions with international partners, who would contribute their reputation and skills, as well as a local investor.

“I think education is a sector that’s done extremely well,” Chaudhary says. “I’m told the [UAE] government wants to exit from education and have the private sector play a larger role. I think we would like to work across all segments, from good quality schooling to colleges [and], if possible, universities. There are quite a few groups which are very keen. We want to do it as soon as possible. I think our final plan should be on the table in three months time.”

Chaudhary says he’s well and truly “back in the market” and this time he’s more confident than ever of success.

“I think in the next three months you’ll find we’ll be making some serious announcements on all these three fronts [manufacturing, hospitality and education],” he says. “A lot of work has gone in. It’s like revisiting what we had planned back in 2008, picking up the threads exactly from where we left off.

“We are perhaps one of the very few companies which, despite 2008, decided to stay on. Our current investments in Dubai run into more than hundreds of millions. A lot of people abandoned Dubai, we never did. [But now] we want to grow on what we are doing because we believe the time is right.

“Things are beginning to pick up. For instance, the hotel industry is beginning to do well [and] tourist arrivals [are increasing]. I think Dubai has done a brilliant job in terms of meeting its set targets in the aviation sector, Emirates has done a brilliant job in supporting the hospitality industry and once this industry moves all the other paraphernalia has to fall in place; shopping has to do better, housing will work, education will work.

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“I see things coming back to not quite the 2005, 2006, 2007 years but those were not realistic anyway. I think things will now only go up, Dubai will not look down, that’s my well-considered opinion, that’s my conclusion.”

But putting aside the potential glitz and glamour of Dubai, Chaudhary becomes most enthusiastic when talking about his home country — or to be more precise, his plans for the Himalayan state.

Nepal is one of the poorest and least developed countries in the world, with a GDP of just $40.49bn. It has been marred by political unrest and ongoing negotiations to create a new constitution since January 2007, making business exceedingly difficult and conditions unattractive for international investment. Consequently, Chaudhary chose to launch Cinnovation in Singapore rather than Kathmandu. But when it comes to investing in the Nepalese people, he is less reluctant.

Chaudhary Group runs eight education enterprises from nursery to graduation and has recently established Nepal’s first private power company, which he says will produce 40 percent of the country’s electricity within four years, helping to reduce its reliance on imported power and significant demand overload that causes daily blackouts.

Nepal is also crying out for private investment in infrastructure — an opportunity Chaudhary says he is all too happy to consider.

“There are no privately owned infrastructure projects [such as] highways or airports or things like that,” he says.

“These are areas where we believe with our global presence and credibility we can attract the expertise and capital and the right kind of partners and we can deliver these. That’s going to be another major way of how we can help Nepal.”

Chaudhary may be proud of becoming the first Nepalese billionaire but he doesn’t want to be the last. He is working with Bangladeshi Nobel Peace Prize recipient Muhammad Yunus to develop a fund to provide microcredit loans to young entrepreneurs too poor to access conventional finance. Yunus has established a dozen such funds around the world, helping the poor to help themselves out of poverty, and Chaudhary is working to ensure Nepal is next.

“My personal plan, because of this recognition [by Forbes], is to do a lot more to work with the Nepalese youth to create a fund,” Chaudhary says. “We’ll create a seed fund [and] we’ll bring in other stakeholders.

“This fund is given to young people with ideas, with fire in the belly. They will have something interesting that they want to accomplish but they don’t have the capital. We call it a non-dividend business fund.

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“If I spent my personal time in trying to grow this particular sector, I can be instrumental in building 5,000 new businesses — just imagine. Because today’s world is all about ideas and there’s no monopoly of ideas by any bigger countries or more prosperous countries. In today’s world you can have a Bill Gates or a Warren Buffett coming out of Bhutan or Nepal. It’s all technologically driven, it’s all idea driven, there’s no limitation.

“So that’s my priority: how do I work with the Nepalese community.”

Chaudhary is adamant that despite becoming the 1,342nd richest person in the world, he has no intention of splashing out on personal extravagance. It’s not his style.

“Maybe someone wants to build the tallest tower in the world but I want to dedicate my time and effort in working with my people to address some of these areas, personally,” he says.

“There are people who create wealth and they donate to charity, and there are people who create wealth and they start spending on themselves, [on] private jets and yachts and building homes in some of the most exotic places in the world. And there are people who also believe in accelerating the path that has brought them to that point and sharing [their wealth] for a larger cause.

“I don’t think my lifestyle is going to change, I don’t think my way of thinking is going to change, neither are my priorities going to change.”

Perhaps it is Chaudhary’s annual trek in the Himalayas that helps keep him grounded. “It’s the most holistic way of amping yourself,” he says. “It sends you into such deep thinking, you come back so refreshed. It’s such a meditation.”

Returning to his roots also gives him time to reflect on not only his achievements but his forefathers who paved the way, and of what his three sons, Nirvana, who manages Chaudhary Group in Nepal, Varun, and Rahul, who oversees the business in Singapore and India, will bring for the future.

“I think they [his forefathers] would be very happy they’ve laid down the foundation for the next generation to get to this level,” he says. “What is crucial is the next generation of the family — where will they take this group to?

“I think without any modesty, from where we started from a small country to have created a world-class corporate which is recognised by Forbes, to any standard, I think is an okay job. Now to climb the ladder from 1,342nd [richest person in the world] to a higher level is what is going to be the real, true measurement of how the next generation moves forward.”

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