Dubai: The traffic he sees from his office window is as good a tracker of consumer sentiment for Lachmandas K. Pagarani as the charts and graphs in a survey.
"There are certainly a lot more cars out there than was the case in 2009 as far as I can see, and that's quite an encouraging outcome for the business community after all that we have been through," said Pagarani, chairman of Al Maya Group, which operates the supermarket chain of the same name in the UAE and Oman. "At the same time, I want to see more families in the cars and that, speaking for myself, is yet to happen in sufficient numbers."
The recession has not left deep scars on Al Maya Group's corporate genome, which Pagarani reckons has to do with the business never steering away from what it did best. "We have been in the food and consumer goods business since the beginning, and that's one reason why the recession didn't have that much of an impact on what we are doing.
"We never got into real estate apart from the apartments we bought for the family. Some may say that not trying out new businesses is old-fashioned, but it has suited me. I have never been comfortable trying to take on too many things simultaneously."
Indeed, over 70 per cent of the group's business is made up of food and consumables, and the rest covers the wholesale operations and franchising for such household names as Bhs, the fashion and home accessories retailer, and Borders, the bookstore.
"Our approach, call it conservative if you want, is paying off going by what transpired last year. We don't carry high debts on the books, and we are making money out of the business we are in. Do I need more? I don't think so."
Personal interest
It's on such finely-honed instincts that Pagarani built up a life in business that has spanned continents and decades. Since 2007, he may have taken a back seat when it comes to the active management of the enterprise after handing over the day-to-day operations to the next generation. But that does not mean the patriarch — who has just marked his 80th birthday — is about to walk away from it all.
Pagarani still maintains regular hours — from 3 to 7.30pm — at the head office on working days, and makes a point of attending all the key meetings. Yes, during summer he does head off for the decidedly cooler climes of London, where he maintains a stately home, and there are also regular sojourns to India for spiritual gratification. India is also the scene for his extensive charity initiatives, which includes two schools and a hospital.
"Today, my son, daughter and son-in-law manage the direct running and I am quite content to vacate this role for them," said Pagarani. "But the corporate role I play now energises me a lot, I see that I have changed my thinking in many ways from what they used to be. I am open to their suggestions... where they make sense to me. And I am not the indulgent father who will say "yes" to everything. Whatever I do not agree with, the children have been good enough to listen and abide by it."
Are there any regrets that he does carry in his business life? "No, and honestly I don't have one. As it is, I am not one for regrets. I have stuck to certain beliefs and the way they should be carried out. I have achieved what I had set out to do."
Looking back, Pagarani never wasted any time fussing about what he wanted to do. In his early 20s, he set up a food business out of Sierra Leone that concentrated on western Africa.
"I can't give a specific reason as to why the food business always interested me — it may be that there were opportunities there at the time and it was something I thought was just right for me," he said.
"There are endless possibilities in this trade, if at all, it's that I should have gotten into food much more deeply."
Dubai base
He stepped out of Africa to London and Hong Kong in 1964, before setting up a permanent base in Dubai the early 1980s. But his actual acquaintance with Dubai was formed in the mid-1970s when he was with the Choitram Group.
"I created the Natco spices and mixed herbs brand for Choitram, which was quite successful and the brand is still there. In late 1981, I felt the time was opportune to launch a business venture of my own, though in alliance with my brother-in-law, Lal Ganwani, who had a supermarket in Ajman since 1979.
"The new business went on to set up the first supermarket in 1983. But I did not feel it was right to create another food brand similar to Natco, as that would have created more direct competition with Choitram and they are family," he said.
All through the 1980s and the early part of the succeeding decade, the Pagarani-Ganwani combine built up a sizable presence in the local retail space. But by the mid-1990s and thereafter, the hypermarkets were starting to make their presence felt, and it was felt the existing supermarket operators were running out of steam to counter this.
In December 2003, the decision was taken by Pagarani and Ganwani to split up the business and go their separate ways.
"It was a hard decision to take because it was family, but it was the right one," said Pagarani. "At the end, it was the best for both families and for the new generation that was starting to take up the reins of business. During the period leading up to the separation, it was decided to concentrate on the existing interests rather than go for new ones. After the creation of the new business, we took a year to set everything up in the way we wanted to.
"You could say this was the consolidation phase that no business can do without. In 2005, the new generation came on board with a new vision for the Group, but integrating the values that were created in the past. Once this was done, we got back into the market for new opportunities," he added.
And how. Over the last three years, Al Maya chain has mounted a gameplan of being in all of the prime residential neighbourhoods that matter. It's as much a presence in Downtown Burj Khalifa cluster as it is in the traditional areas in Deira or Bur Dubai. This approach has neatly coincided with a trend where shoppers increasingly patronise convenience stores for their everyday needs.
There are 30 outlets in the local market and another four in Muscat. New geographies within the Gulf would be considered, but that's not an immediate priority. India does not figure in the plans either for a supermarket chain presence or by way of a franchise opportunity.
Mall management
Also, one business line that the group will not enter is the building and managing malls. "For me, that was never a priority, though some may say it would fit perfectly with our existing retail operations," said Pagarani. "I don't see it that way."
"We take our cues from the market, which seems to have settled down somewhat. In such an environment, the group will not undertake major expansions other than for convenience stores, which by way of their very format creates a lot of flexibility for the operator. But as to the rest, it will very much be a wait-and-watch approach."
The caution extends to new franchising opportunities as well. "We could have taken more even in the boom phase, but apart from Borders there was nothing that would have fitted with the group's profile," said Pagarani, who still lives in a rented villa in Jumeirah.
Cautionary approach
"We also don't want to get sidetracked into losing focus on our core focus, which is food and consumables. Then again, it's not as if all the opportunities are going to dry up forever. When the market situation improves, there will always be others. If I look at the group's portfolio as of today, I would say there's more we can do on the distribution side. There are still lots that can be done there — it's a question of picking up what works best for you."
Retail makes up 50 per cent of the Group's turnover, with wholesale contributing 30 per cent and the rest through franchising. Pagarani prefers not to reveal the turnover, or what he wants it to be in the next three to five years. "There are some details that should be held private," he added by way of explanation.
"I would be satisfied even if with all the changes that will take place in the future, Al Maya will continue to be a household name in the country. All else should be secondary and it is for us."
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