Yogesh Mehta created Petrochem from scratch. Today, it is the twelfth biggest chemical distributor in the word. He tells Anil Bhoyrul why
Yogesh Mehta does a very good job of hiding just how successful he is. Calm, laid back, attentive, the boss Petrochem has a fair amount on his plate.
“You know we are now the fastest-growing chemical company in the Middle East? You know we are the top chemical distributor in the Middle East and the twelfth biggest in the world?” he asks.
Most people in the industry already know that, and they know Mehta pretty well: the company he started from scratch raked in $1.1bn in revenues last year, with his profit margin in excess of 3 percent - not bad for an industry that is still feeling the winds of recession, and where doing anything over 2.5 percent is a sizeable achievement.
But then this is Mehta, this is Petrochem. It has offices in Dubai, Jebel Ali, Mumbai, Antwerp and London, plus an office and distribution facility in Singapore and China. Today the company exports of over 250,000 million tonnes (MT) of products to the Middle East, Africa, Europe, the Indian subcontinent, the Far East and the Asia Pacific. It has an inventory of over 180 types of chemicals from solvents to specialties, and an ultra-modern fleet of road tankers and large trailer trucks. Best of all is a state-of-the-art distribution terminal in Jebel Ali which cost $33m to build and that no rival has been able to match.
“Our USP is our terminal in Jebel Ali. This actually creates a barrier to entry for others. It means we have the tanks, we have the storage. That’s why we are distributors for companies like Shell, for all kinds of products used on a daily basis. It means we can be a one-stop producer, we can stock large volumes in our terminal,” he says.
The Jebel Ali terminal, now the lynchpin of the company, was built in four stages between 1996 and 2004, but has been such a great success, Mehta is now expanding it: ten new storage tanks are being added by 2014.
With its current profits, and based on an industry-wide price/earnings ratio, you quickly get to market value for the company of $640m. Time to head to the stock market surely and take some cash? Mehta had previously had his eye on a 2015 listing, but says that despite the strong performance of his company, the economic environment still isn’t right.
He explains: “I wanted to do it in 2015 but we moved it, I think the environment is still hostile in terms of doing an IPO. The chemical industry is still in a slump because of the eurozone crisis and because of oversupply in the whole region. Right now we just wouldn’t get the value we want, so I think the earliest we would go to the stock market is 2018.”
But Mehta adds: “That doesn’t mean the company isn’t growing. By next year we will have set up an office in Houston. With the advent of shale gas, I want us to be in the area to receive downstream chemicals.” Either way, you can be sure that Mehta will be right in the centre of the action. He was ranked seventeenth in this year’s Arabian Business Indian Rich List with a fortune of $720m, and also took a top twenty slot in the coveted Indian Power List. Not bad for a guy who came to Dubai at the age of 29 with virtually nothing. Having first run a smaller chemical trading business in Bombay that ended in failure, he picked Dubai as his next move, 21 years ago. “I just said to my wife ‘Let’s go some place where there is more opportunity’.”
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