Binod Chaudhary – First Nepalese in Forbes’ Global Billionaires list
Posted by Ram Kumar Shrestha on March 5, 2013
First Global billionaire from the country of the Buddha and the Mt. Everest
Binod Chaudhary has become the first Nepali to be enrolled in Forbes’ global billionaires list, with net worth said to be at US$1 billion.
Fifty-seven-year-old Chaudhary, who skipped college to join family business at the age of 18, is listed as 1,342nd richest person in the world and has been termed as the richest person in Nepal by Forbes, an American business magazine which publishes billionaires’ list every year.
Chaudhary shares his global billionaire ranking with 84 other individuals who have also been ranked 1,342nd richest people on the Earth.
In a twitter update, Chaudhary said it was a “rare honor and recognition for a non-Indian South Asian”
This is what the magazine writes under the title Himalayan Vistas
Binod Chaudhary took business to the limits in old Nepal. He argues its new Maoist-led regime should mean a wider berth.
At the foothills of the Himalayas lies the world’s newest republic and, potentially, a tourists’ paradise. But a decade-long civil war by Maoist rebels, a troubled monarchy and ineffective governments have stunted Nepal’s economic growth to the point of stagnation. The aftermath is visible to any visitor to Kathmandu, the capital. Cars and motorbikes clog either side of the road to the airport, waiting to get their limited quota of gasoline from neighborhood stations. The wait can mean a day off from work just to tank up. Even as fuel got dearer–Nepal imports all its requirements from India–the outgoing Nepali Congress-led government dithered to the last in raising prices. Kathmandu’s residents have learned to live with much more deprivation than fuel rationing–four- to eight-hour power outages daily and an acute shortage of drinking water.
Now the Maoists have ousted Nepal’s unpopular king and are closing in on power through a coalition after grabbing a 30% popular-vote plurality in April elections. The new Constituent Assembly has already sent the creaky 240-year-old monarchy packing.
The region’s taking a deep breath. Will this victorious faction of the Communist Party of Nepal really evolve from an insurgency that marked the royals’ final violent years toward a stable democracy?
The president of a leading conglomerate in the country, Binod Chaudhary, is bullish. “We’re going to see sweeping changes. All political parties, including the Maoists, are committed to reshaping Nepal’s economic destiny,” he avers. The 53-year-old head of the Chaudhary Group is himself a newly designated parliamentarian, one of a dozen businessmen in the 575-member Assembly. He was nominated under the banner of the Communist Party of Nepal-Unified Marxist Leninists (CPN-UML), a party unexpectedly outdone by the Maoists.
An avowed capitalist, Chaudhary sees no contradiction in his recently forged affiliation. He argues the CPN-UML is pro business with more socialist than communist leanings. The platform in parliament lets him advance economic goals. “We will raise our voice for reforms,” he insists, and foreign investors will flock to political stability.
Nepal’s biggest baits: energy and tourism. The country’s hydropower potential, estimated at 84,000 megawatts, has barely been tapped (giant India, by contrast, has a potential of 150,000mw). Home to the breathtaking Himalayas in the North, including Mount Everest, the world’s highest, Nepal is a trekker’s haven in normal times. Yet, sandwiched between India and China, two of the world’s fastest-growing economies, this nation is South Asia’s poorest. Its economy, smaller than that of tiny Sri Lanka, has been crawling ahead at 2.5%, barely keeping pace with population growth.
Some don’t share Chaudhary’s optimism. Sujit Mundul, chief executive of Standard Chartered (other-otc: SCBEF.PK – news – people ) Bank Nepal, argues that before committing capital, foreign investors will expect greater flexibility in Nepal’s labor laws, which today don’t allow workers to be hired and fired at will. Says political commentator Kanak Dixit, publisher and editor of Himal, a monthly on South Asian affairs, “Our economy is like a spring waiting to be released. But those who are pinning their hopes on the Maoists are being idealistic as they may or may not deliver.”
One hopeful sign: Maoist Deputy Leader Baburam Bhattarai assured members of the Federation of Nepalese Chambers of Commerce & Industry that the party is pro-economic-development.
If so, the $270 million (revenues) Chaudhary Group would stand to be a notable beneficiary. The group’s corporate slogan, “Touching life everyday,” is clichéd but true. Group firm CG Foods’ Wai Wai, a popular brand of instant brown noodles, was ranked as Nepal’s top consumer brand by research firm acnielsen last year.
The group has a thriving trading arm that distributes a slew of foreign brands, including lg electronics (which the group also manufactures locally) and Maruti Suzuki (other-otc: SZKMF.PK – news – people ) cars. All of Kathmandu’s taxis are compact, fuel-efficient Maruti cars imported from India. (Fuel shortage or no, Chaudhary prefers to be chauffeur-driven in a gas-guzzling Suzuki SUV to his seven-story group headquarters on the site of a former electronics factory). Other interests include a brewery, a 137-acre industrial park with a 9-hole golf course (named after Chaudhary’s late mother), packaging, cigarettes and steel.
Binod’s grandfather Bhuramal Chaudhary, a textile trader born into Rajasthan’s Marwari community in 1870, seized on doing business in the Himalayan kingdom after moving there as a boy. Opening his first textile store on Kathmandu’s New Road, he supplied his wares to the royal family. His only son, Lunkaran Das Chaudhary–Binod’s father, who retains the title of chairman and is still semiactive at 86–converted the modest outlet into Arun Emporium, Nepal’s first department store, named after his youngest son (Binod’s brother, now 45). Alongside, he expanded into manufacturing textiles, hosiery, utensils and biscuits.
The opportunistic philosophy has carried through into a fourth generation that now includes Binod’s three sons, at work in the group. “If nobody has done it before, it doesn’t mean that it can’t be done!” their father grins, tucking into a lunch bowl of Wai Wai noodles.
Chaudhary Group is only part of the family empire. It’s an open secret that it has a stake in Nabil Bank, a domestic private. This is held indirectly through NB (International), an offshore entity in Ireland. The 50% stake was acquired from Emirates Bank, which sold it first to the National Bank of Bangladesh, which in turn did a deal with the Irish firm. Earlier, a court had stalled a direct Chaudhary purchase. The Nabil holding forms part of Cinnovation Group, Chaudhary’s overseas arm, headquartered in Singapore. Together the two business entities probably constitute a valuation exceeding $500 million, making the family among Nepal’s richest nonroyals.
Cinnovation has interests in hospitality, real estate, financial services and consumer goods. Cigen, its Hong Kong-registered hospitality arm, is a partner in Taj Asia, part of India’s Taj hotel chain, a Tata affiliate that runs luxury resorts in the Maldives, Sri Lanka and Malaysia. In the pipeline are new resorts in Phuket and Bali and 15 business hotels in India. Additionally, Cigen has inked a deal with Alila, a boutique hotel operator in Singapore, to set up a chain of high-end wellness resorts in exotic Asian locations. It also has a stake in a Hilton Doubletree Hotel close to New York’s JFK International airport. Cinnovation also is affiliated with a real estate play in Dubai.
Since Nepalis are prohibited from investing overseas by an archaic nationalistic law, Chaudhary assembled his overseas empire by tapping into a network of “friends and associates” around the world and forging what he terms “strategic partnerships.” It helped that two of his sons who studied and live abroad are nonresident Nepalis, a status that allows them to hold assets outside Nepal.
Chaudhary is hopeful that in the rosier future that he envisages, such ruses may no longer be needed. Even the departing government, under reform-minded Finance Minister Ram Sharan Mahat, has contemplated more liberal legislation. “Many Nepalis are using the back door to invest overseas. This will allow them to invest through the front door,” says Mahat, who has been finance minister five times but isn’t likely to retain his portfolio in the new government.
At 18, young Binod was already focused abroad, set to leave for India to study accounting, when his father developed a heart ailment. The son instead plunged into the family trade. He recalls that Arun Emporium at the time had no more than 50 employees; today 4,000 people work for Chaudhary and Cinnovation. He doesn’t regret not getting a college degree and takes pride in being self-taught. He says his early trips to source imports transformed his thinking. “Japan was my B-school,” says Chaudhary, who learned Japanese to be able to negotiate better and order vegetarian food.
To support the biscuits business that was taking off, the Chaudharys got into flour milling, cooking oil and packaging. Since the mill produced more flour than the biscuit factory needed, they moved into instant noodles, a popular fast-food item in Nepal, procuring know-how from a Thai firm (hence the name Wai Wai). The noodles were an instant hit and before long were being exported to the Middle East and India, where the group has two factories.
Chaudhary says that growth and expansion was never easy, owing to Nepal’s strict licensing regime (disbanded in 1990) and an attitude then that businessmen were smugglers and exploiters. “It was impossible to do any legitimate business without making the decision makers happy. I learnt how to negotiate my way,” he acknowledges. While his father advised him to “be a submarine” and keep a low profile, Chaudhary insisted on a group identity and flaunting his wealth. He drove to the income tax office in a Mercedes-Benz. There’ve been scandals, but he has always answered the accusations.
While he still eyes creating Nepal’s first multinational group by listing Cinnovation overseas, he’s focusing on domestic opportunities. The group is partnering with AES to develop hydro-power projects and has plans to set up Nepal’s biggest cement plant. Chaudhary’s oldest son, Nirvana, who lives in Nepal, is building two townships outside Kathmandu, one for homes at a $100 monthly mortgage.
Breaking from the political heat, Binod set out on a ten-day Himalayan trek in May. The high point, literally, of that grueling journey was traversing the Thorong La Pass, at almost 18,000-feet elevation. (Mount Everest peaks at 29,000.) “I’d never gone trekking before, and I thought it’s time I tested my physical endurance,” he enthuses. There’ll be plenty of other hills to climb just ahead.