Fajr Magazine speaks to Niaz Rahim, Group Director of Rahimafrooz Limited, regarding his journey from Rahimafrooz to Agora.
Q: First of all, we would like to know about your company. Where did it begin? How did Rahimafrooz come into existence?
Niaz Rahim (NR): Rahaimafrooz was founded by my father, late Abdur Rahim. After being in the business field of proprietorship, partnership, he formed this company on April 15, 1954. Since then, it has been trading, distributing, and then gradually it moved into manufacturing. We did a lot of trading and distribution till 1980. We mainly distributed Lucas batteries. Since then, we had entered the automotive industry. Back then, we were settled in Chittagong.
We came to know that a British company was looking for a suitable place to build a factory for manufacturing batteries. We had a property in Nakhalpara, Dhaka, which we offered them to build that factory provided that they give us the distributions. They agreed and thus, we became the distributor of Lucas batteries. We were their distributor from 1959 to 1980.
When our father was alive, it was all by himself. His commands were like verdict; and so after he passed away, we developed a common understanding among the brothers regarding what we were and were not doing.
After I came back from Canada, my uncle and two of the brothers — we chose different areas of operations like marketing, trading, and financing. Altogether, we mainly focused on manufacturing.
From 1984 onward, we started changing the marketing and business strategy as we wanted our presence across the country, based on our values, commitments, and ethics. During that period, we revived the entire distribution.
In 1996, we gradually started exporting batteries to Nepal and India. Although, we had difficulties with India back then; but by the grace of Allah, now we are exporting in India and another 57 countries. Today we are the 2nd largest battery manufacturing company in South Asia. We have diversified into IPS, solar energy, and operating small power stations.
Besides our engineering and production industries, we wanted to penetrate the service industry. Therefore, Agora was another diversification. So that is where we are today. We started with 50/60 employees, and now we are a family of more than 7000 working people.
Q: What are the businesses Rahimafrooz doing right now?
NR: Currently, Rahimafrooz is trading in four broad segments: Storage Power, Automotive & Electronics, Energy, and Retail.
In storage power division we have three companies: Rahimafrooz Accumulators Ltd., Rahimafrooz Batteries Ltd., and Rahimafrooz Globatt Ltd. We are the largest manufacturer and exporter of automotive and industrial batteries in Bangladesh; and we have the largest battery export plant in South Asia. We market and distribute various automotive after-market products such as automotive batteries, tires and lubricant as well as electronics ranging from home appliances, power backup systems, lighting products, and electrical accessories. The Group is also one of the leading complete CNG solution providers in the country. In this division we have Rahimafrooz Distribution Ltd., and Rahimafrooz Gastech Ltd.
We also have a significant presence in the energy sector of Bangladesh with companies like Rahimafrooz Renewable Energy Ltd., and Rahimafrooz Energy Services Ltd.
We introduced the first retail chain of superstores in Bangladesh and have played a major role in redefining everyday shopping. Under this division we have Rahimafrooz Superstores Ltd., which introduced Agora for the first time.
Rahimafrooz CIC Agro Limited (RCAL) is a reflection of Rahimafrooz’s vision to be a leader of the best quality product from ‘seed to shelf’. The company was established in June 2011 as a joint venture with CIC Agri Businesses (Private) Limited, a leading company in Sri Lanka.
Q: We, along with others always admired Rahimafrooz as sort of a place where we can do jobs and we kept Rahimafrooz with companies like BAT, Nestle in that same position in a row. This is because the environment and the salaries are very good. So we can do a notion here, that being ethical doesn’t make any barrier in life. At the same time, it captivates the young people to be part of it here. What you think was the charisma you people carried that captivates us all?
NR: Firstly, as I told you, we emphasize in our values. You will see the reflection of our values all across. Anybody who doesn’t respect it is not part of our family. It applies to dealers, suppliers-everybody. If they don’t follow that list of 5 or 6 values, you cannot be a part of our family.
Secondly, being ethical doesn’t mean that you have to be sloppy, you can’t dress well, or you can’t enjoy good life. It doesn’t stop you from anything. We have to survive to match with any leading companies. We did a survey and found ourselves low in various cases. So when we were low, we worked hard to increase the level; and we tried to be among the top five to ten companies in Bangladesh. We said we will be in the median level. So, we may not be able to match with multinational companies but we will be far better than many other local companies. So we decided, even though we are private ownership company, we will let the professional people freedom to manage the company. That transition, that test and trial is still continuing.
Of course it’s very difficult choice to leave things to others. The way I look at things as an entrepreneur, as a promoter, many of the CEOs will not look at it like that way. For them it’s a job and they are here for 5 years or 10 years or whatever time. Whereas, for me, it’s a job where I have to go to grave with this. So that difference will always be there. Having said that, if you still want your company to survive perpetually, it is better to have a professional management system.
Good practices are being embedded. So within our lifetime whatever mistakes have been made, we are correcting and putting them on a strong foot. Alhamdulillah, we have been able to attract many multinational senior executives in our company. But the difference is being a local company we have our own way. We don’t have written manuals to follow. In other multinational companies, people are very comfortable.
For us, we have to write it, and we have to write it within context of our society, our values.
Q: You started with automotive and electrical production like batteries, IPS, etc. Then you came to a totally different business area with Agora, which has been very successful in the market now. The taglines, admiring ethics are always emphasized. So, what is the magic behind it? What are the steps that really paid you off?
NR: According to us, whatever business we do, must add value to the stakeholders. We must contribute it to society. We must contribute to the lives of people, whom we deal with, and of the community we live in.
We wanted to diversify our business in this industry. We were already in the car, battery, and tire business industry; and in the total automobile servicing industry, so the easiest way had been a gas station. We had the reputation and strength in the market to do that. But, by doing that, we were not creating anything new.
Then we saw that every family in our country has a relation with groceries. Buying from there, eating from there. The people get abused over there all the time, they don’t know where these products are coming from; there was no standardization.
In 1995, we decided to explore the supermarket. We did lots of surveys and research in 2000, and then decided to invest in the supermarket field. Supermarket in the form of grocery. But, what difference are we creating? We started to write every aspect of products that we were to sell. If we sell meat we must be able to describe ‘what meat is’ and ‘where these came from’. Every package of sets that we sell must show ingredients.
Before Agora came, there was nothing like that. We made sure the consumer’s right to know what they are buying. Because, one might be allergic to a product or another. We put expiry date, used barcode. Thus, we set all the standards.
In 2001, we were communicating with our suppliers to develop the products and we were literally helping them to do that. The good part was while we were exercising these rules, none of the suppliers said that they can’t. They listened to us. Our realization was, this nation was unguided. When we gave that to the people, they took it. They started to match with us and we also did that. We asked what they wanted to become and how they wanted to grow in business. If you want to grow then you also need to know and make sure certain things about the ones you are dealing with this. We made our own ethical chain value. That is the difference that we created. For this reason, whoever came after us has fallen.
Every Ramadan you see that we say, ‘‘Rojar shongjomer shathe shathe damer shongjom’’, and it’s like a commitment. We have maintained this, until it has gone beyond our reach. Even if we are not making money that’s okay, but if we are losing money, then we need to survive.
We give a forecast to our suppliers to make their stocks ready for us. It’s a partnership between us and our suppliers to ensure a quality chain; and that is what we do. Alhamdulillah, in Bangladesh, after 2001, a lot of awareness regarding consumer protection has been growing and we take all the credits for the initiation.
Q: How many outlets does Agora have?
NR: We had fourteen outlets, but had to cut down three because of wrong location. Alhamdulillah, we have signed an agreement with an investment company so that we can expand more. Ultimately, this is a volume business and we need to carry on. Even the people, who are investing in our company, respect the values of Rahimafrooz.
We carry certain ethics, like, we won’t sell cigarettes or any haram food. There are certain things, which aren’t haram, but we still don’t sell them. Just because it doesn’t contribute any good to the society, we refrain from selling them. And, that is a part of our agreement. It might not be a very big thing but there are even minor things that we don’t permit.
We could sell non-alcoholic beer or champagne. But we don’t want it; because today’s non-alcoholic beer can contribute to tomorrow’s alcoholic beer. We carry things those go with our value chain. We try to carry things that go with our society, culture and religion. That is how it goes.
Q: When you started the business it was only you in the market; so you could use any price tag on the product. But when other competitors entered the market, the case started to change. At that time, to compete, you have to lower the price; but often it degrades the product quality. In this situation, ethics is a big question. How you people are dealing with this issue when you have a chance for your customers to move to your competitors?
NR: Good you asked that question. When we started in 1995, there were still some supermarkets and retail stores. They all charged high because of the air condition and flyers they would offer.
When we started, we said we won’t charge any extra money because people didn’t demand it. It was our choice to give our consumers a comfortable environment to shop in. It was never the consumer’s demand that we could charge extra for it.
The question is how we could survive in that. The answer is we needed to grow. Supermarket business is a volume business and requires growth. When we strike volume, a lot of things will change. All the products we are selling are either MRP marked or available in the market. So our price is almost fixed by the open market. That was our first proposition. It has to be less; but if it’s more, then we must have a reason.
So to survive, we asked our channels to give us a margin. Because, in the beginning, we didn’t even know what was happening in the market. We told our suppliers, it’s their business.
If we grow then they grow, if we lose then they lose. We said we are giving you name, platform and ambience to grow; use it. Here our suppliers fix the rates. So we can’t be out of the market because the people who are supplying to other market are supplying to us. And if there are up and downs they are adjusting the prices. They literally mentored us in the market. In return, we ensured them proper display, price and payment. Even if we didn’t make money we ensured our suppliers got paid.
If you don’t pay them they will become weaker. So we have to pay them in time. That’s why you see our lot of suppliers has grown where we haven’t grown. But, that’s not a problem. As I have mentioned earlier, as our volume will grow, the economy of doing this business will also change.
Q: At the same time, in Bangladesh, there are a lot of turmoil, corruption and crisis going on. In this case, how does Rahimafrooz maintain its ethical standards, transparency and stay strong?
NR: I have to admit that we find it very difficult too. Political turmoil affects everybody whether you are ethical or unethical; and if we didn’t have the turmoil, we would have done much better. But, alhamdulillah, just because we dealt a lot of thing in the hard way, our experience has not been that bad. People would want to go through the easy way. They don’t look into language or feasibility; they don’t bother whether they are doing ethical or unethical things. They want to get their jobs done in any way — paying bribes or pushing through. And, yes, if you are doing it the wrong way then you have started the wrong way. But if you are doing it the right way, it is difficult.
I will not say it’s a bed of roses here. You have to be persistent and convincing. Down the line, there are also people who want ethics in the entire chain system. And if you stick to the ethics, somebody will always pick you up; maybe from divine blessing or goodwill, yet it always helps. And that has always happened in our cases.
That doesn’t mean that we don’t pay money unofficially. We do it when we see our halal works are held just because somebody isn’t paying. We then try and convince him, we get the job done, and then we pay. But it hasn’t happened a single time, that we paid to get the wrong things done. We pay to get done our halal things. When we are compelled, only then we do that. Otherwise if you take the market information about our organization, you will see we are not a great pay master at that prospect. We are quite conservative.
Q: Many top level executives say that they seek for so many people, but they have hard time hiring the right person for the right position. So, have you ever felt the crisis in hiring right people for an assigned work?
NR: Yes, we have felt that need and we are still facing this problem. I think this problem is due to our education system. For example, people take MBA as a fashion. But, when you say MBA then you have to carry the weight, the value and the deliverance. A lot of education is more certificate-based.
We must come out of a certificate-oriented education system. What we are learning is more important; so that we may deliver it well. That personal nurture doesn’t happen in our education system. I feel that many graduated people come in and for the first few months they feel completely lost before they can actually contribute to their work field. Today, most of the education system is like that.
Q: There is a notion that an institution needs to be well-reputed. Does studying at a reputed institution really matter?
NR: Institution does matter to some extent. For example, people from IBA have a different profile. As we employ them, we see that their delivery is different than the people from NSU and IUB; but if you go to EWU or others they are also different. They are all bright students, but why institutions make a difference in academics must be found out.
Why do only IBA students excel in intra-university competitions? I think IBA students are more committed to learning, doing certain activities. Or maybe the IBA students are coming from a grass root level. I don’t know what exactly the reason is behind but you can see the difference.
Another thing is that you need to respect your jobs. If you tell any university graduate from any of these aspects, they will not like to walk in for Agora; because it’s a supermarket. But if you look abroad, all students are doing part-time job in supermarkets and food restaurants. Well, that is why they learn to be humble and they learn to give service. They learn to interact with people. But our society would say, “Oh, you have done that. Couldn’t do anything better?”
We have to come out from that. We have to learn to respect labor, respect any job given. Every job is a dignified job. For example, a person who is grooming the floor, is he not doing a dignified job? He is doing that because unfortunately, he doesn’t have the caliber to do better. That’s why in our company, we don’t use, or we do not encourage, languages like “tui”, “rakh”, “otha”, etc. You can use better language. You need to be cultured. If we concentrate on self-development, the institutions won’t matter in the end.
Q: What would be your advice to students so that they can tailor themselves to become a potential candidate?
NR: Whenever I visit a university, I tell them learning is more important than your certificate. That is why, when we hire people, we don’t see the credential first. We observe his conduct, how he walks in, how confident he looks, how he talks. Those are the first impression to create. We take their CV only in the end. Once we have chosen to take Mr. X, only then we tell him to submit his papers. The papers help him later on in getting a promotion; and for other requirements like, what challenges we can give him more. But the actual hiring was done even before we saw their papers.
Q: Many people think that being religious is a problem to become successful in business, and that it doesn’t go together. So how do you maintain your religious life and business life together?
NR: The notion is completely wrong. We are practicing Islam in whatever we do. It has helped us internally, because it boosted the loyalty of our staffs and they started valuing themselves. They changed accordingly, and it has helped them develop a very good bond in our community. And the fact we are not going for any kind of shortcuts, not pulling to get our works done, is that they created a good reputation externally. So it has helped us in both ways.
People who say that they are not practicing they don’t know what they are missing out. As we are practicing, our stakeholders believe what we say. They don’t need to investigate. They know we will not do anything which goes against the moral. That has been a very strong point for us, Alhamdulillah!
Q: What is your advice to the young entrepreneurs who have just completed their graduation?
NR: I would firstly say that every entrepreneur must have a vision regarding what he wants to be, what he wants to do, and where he wants to go. If you don’t have a vision or a direction to go, you will be carried away or misguided with time. You need money to do anything. But for entrepreneurs money is just one of the many ingredients to be successful; it isn’t the only ingredient.
There are schools, thoughts, saying that, without money, you can’t proceed. When my father started, he was an orphan. He was a poor man who was just doing his job. But he had partners who gave him money. He had other financiers who helped him move. But, why did they do that? Because he had the vision to do something. He convinced them that he had potential in him. He believed that at the end of the tunnel there is light.
Every entrepreneur must have such a mindset. If we look at the successful people around us, we can see that they had a very humble start. From there, they gradually grew. So entrepreneurs have to know what they want to do. If you want to be a wealthy man, then you have to focus on the process of becoming a wealthy man. As simple as that!
Q: I would like to end this interview with your definition of success in a single sentence.
NR: If you enjoy what you do, then you can take credit for whatever you get out of that. There can’t be a better satisfaction than that. Success doesn’t always come from money it comes from your inner self saying, “Yes! I have done that”.
