L.T. Pagarani of Choithrams group: The reluctant businessman who became head of an empire
He was pulled into the family business by his father, but he's got an exit strategy
Live in the UAE? Odds are you've been to Choithrams, the supermarket chain.
Gulf News met the company’s 60-year-old chairman, Lekhu Thakurdas (L.T) Pagarani, to get the story behind the stores.
Pagarani is the son of the founder of Choithrams, the late Thakurdas Choithram (T.C). He is based in the UK, but makes frequent visits to the UAE, the GCC and Africa, where the company has a presence.
The reluctant businessman - more on that later - is at the helm of a business empire that sits in the hands of a board of trustees and senior executives.
It all began in a small room
Choithrams was started in 1943 by Thakurdas Choithram Pagarani. The retail store was called T. Choithram and Sons. He began his career as a sole trader, running a tiny four-by-four metre store in Freetown, a port city and the capital of Sierra Leone, in West Africa. Thakurdas met his future wife within a week of opening the store in Freetown - and, well, that was that.
Today, Choithrams enjoys a presence in 19 countries. There are three anchors who are appointed in the UAE, UK and West Africa who are the driving force behind the business. Globally, it employes 16,000 people.
The turnover of Choithrams in the UAE alone runs into billions of dirhams, according to its chairman.
In the mid-70s Thakurdas set up operations in Dubai, and to quote the company’s chairman himself, this was a watershed moment in the history of Choithrams. “We have a long history with the UAE. One of the main reasons for us venturing into business in the UAE was because in the 1940s it was a practical thing to do,” said Pagarani.
“As you know we had a business operating in West Africa. Back then, flights from Africa to India did a stopover in Sharjah. My father did a couple of trips to Sharjah and the next thing, he decided to set up a shop here in the UAE. The UAE Federation had been formed and the rulers had an entrepreneurial spirit. The economy was flourishing and my father knew well it was a good time to enter the UAE market.
Growth of the company
Choithrams’ journey around the world began in Sierra Leone. Next, the late Thakurdas set up stores in Hong Kong, where the company continues to have a strong presence over the past 60 years. In 1960, Choithrams started a manufacturing unit in the UK. “The UK as a location was not intended by us to have a retail business. The focus here was our manufacturing unit. For many years we lost money from this market because we were ahead of the curve, dealing in organic food. There were no takers for this at the time in the UK and the business failed us. We persevered and of course, now it is a mainstream pursuit by consumers in the country,” said Pagarani.
Choithrams then moved to Spain, Germany and closer home to Bahrain and Oman.
The lure of UAE
“My father coming to the UAE and staying in the market so long was enabled by a number of reasons," said Pagarani. "One being, a great team of colleagues he had to help him grow his business in the UAE. The other being that considering our experience in other countries, we had acquired agencies which we thought could make an entry into the UAE market. As an example, in West Africa, we were the agents for Lipton Tea, a great household brand today in the UAE. But back in the 1970s this brand was unheard of in the UAE. There were products and brands that we had tried elsewhere in the world which we introduced to the UAE in order to capitalise the market here.”
“We are perceived as a supermarket operator and I welcome that, but really we are many things other than a supermarket,” he added.
New, novel approaches
According to Pagarani, innovation has always been at the heart of the company’s ethos. And the family's too.
In 1943, when he was in Sierra Leone, the late Thakurdas pioneered a number of things. For example, since there was no refrigeration at the time, he stocked huge ice blocks, chopping them into smaller cubes to use for storing vegetables and milk. He also sold the cubes to truckers who would stop by the Choithrams’ store for beverages and snacks.
“I’ll give you another example of some of the early days, pertinent to the UAE. We all take fresh milk for granted today in the UAE. But can you believe as far back as the late 1970s, there was no fresh milk in the country?”
Fresh milk was available only in one of Choithrams’ stores, in Jumeirah. The company imported milk from different countries and transported it here on flights once in a week. As a result of the effort, every week there would be massive queues outside the shop.
“People would line up on the streets. Prior to fresh milk becoming mainstream, people used milk powder for their hot beverages,” said Pagarani.
“It was a pioneering effort by my father, but as time evolves, the innovation fades away as it becomes mainstream. Yet there is a great pleasure in the fact that we were able to make a positive change in the market,” he added.
Then in 2014, the company took a new step into the digital age: it commited to e-commerce.
How is UAE different from the rest of the world?
Pagarani explains that the UAE is the most variety rich market owing to its demographics and community audience. In any classic Dubai supermarket , not just Choithrams, you will find a range of products catering [to] a variety of nationals, he said. “In some countries you will have to go to a specialty shop and search it [certain items] out. Access to a supermarket is great thanks to the infrastructure; shopping is not just functional but there is an element of joy [to it in the UAE]. The Dubai consumer is happily pampered. Relationship nurturing with customers is great here in the UAE.
"In fact, Dubai is sometimes perceived to be a place difficult to make friends. In the case of Choithrams, we have worked very hard to grow friendships –whether it is with our staff or customer,” said Pagarani.
Challenges of running a business
There are many challenges when it comes to running a business, said the chairman. “We have noticed a sea of change – not in terms of our business growth – but in terms of consumers in the UAE. Today, the consumer is driving the change.”
For one thing, consumers are much more discerning and demanding. “That gives a strength to the retailer, if you are able to take it well. The shopper is much more explicit and they come into a store well informed.”
Pricing strategy
It's important to be first to the party, said Pagarani. “It is the forefront of everyone’s mind. As I said, the consumer is very well aware of our competitors. We have a strong business intelligence team that keeps track of all product prices in the market. The other thing we do is that – through the supply chain all around the world – we try and bring to UAE, products that have not been launched so we have an opportunity to price those before volumes [of them] come in," he explained.
The reluctant businessman
Pagarani said before taking over the family mantle he was happily working for a private healthcare sector in the UK. “But I remember -very vividly- my father told me to leave my job and join the family business.”
So at the age of 35, Pagarani took over the job of running the other businesses of Choithrams such as the schools and hospitals. Today, at 60, after successfully guiding the firm to a thriving business empire, Pagarani is preparing to make a soft exit.
“We have brought in CEOs and new leaders to run the show.”
Since 2000, group ownership has been in the hands of the Choithrams International Foundation. “One of the consequences of that is that it has changed the entire outlook of running a business in the UAE and worldwide. I came here in 1995 with the intention of staying for nine days and just [like] many other people from the UAE never left. The journey has been great for me to say the least,” said Pagarani.
Why this move?
Philanthropy, points out Pagarani, has been an important part of his life. “My father had made a promise when he started his business that as soon as he had made a bit of surplus money, he would do some good and give it to the society. In 1959 he created his first trust called the Choithrams Remembrance Trust. Since then, during his lifetime, several schools and hospitals have been built under this Trust Foundation.
Thakurdas built a large hospital in Central India, another one in West Africa as well as a number of schools through the money collected in this foundation.
Before Thakurdas passed away in 1992, he made a declaration of trust, giving away a major part of his wealth to the Choithrams International Foundation to run the business empire. He left a modest provision for his family. “So as a result of this my father’s wealth and shares in the company are held in the foundation, which has grown exponentially.”
“We have trustees in the foundation. In the business we have partners and directors. There is a harmonious interaction between the two. What is precious is the warmth of being able to express criticism without seeing it as the end of the world. The group is synergized in the way the trustees and company executives work well together.”
And so link by link, the chain it grows. And Thakurdas' legacy lives on.