Get insights into the nitty-gritty details of how to run a successful business from the man who has extensive experience in several sectors, including academia.
Q: To begin with, we would like to know about your early life. Where were you born and brought up? Your academic background?
Riad Mahmud: I was born in Dhaka during the liberation war. I was also brought up over here. I completed my SSC from Saint Joseph High School. Then I completed my HSC from Kodaikanal International School. After that I did my bachelors in chemical engineering from the University of Texas in Austin. Then I came back and started a business. After a couple of years I realized that an engineering degree is not going to help me to excel in business. So I went back to the University of Melbourne and finished my MBA. I was then recruited through an on-campus interview in a British media consultant company. In fact I was the only South Asian student to have gotten recruited through an on-campus interview. I worked in their head office in London for four months. Soon after I was placed in their New York office as the Chief Executive Officer. I worked there for two years. After that period, I realized that I had an inclination to come back because I felt comfortable in this environment. I also felt that the longer I stayed over there, the more I would get accustomed to their culture and lose touch with our way of living. I decided to come back to Bangladesh and I restarted my life again. After returning, my wife joined NSU and after a while she suggested that I also start teaching. If I started teaching, I would be in constant touch with studies and academics and thereby I wouldn’t forget the things that I had learned. Every degree you take, it has got a shelf-life of 3 years. If you don’t build on it, you will more than likely forget what you have learnt. Unless of course you train yourself and keep in touch with the knowledge gained. This was my way of getting myself and keeping myself updated and upgraded. One thing you must realize is that to teach you need to teach yourself constantly. Around 2003, I started teaching. In 2008, they started the executive MBA program. I couldn’t manage time to teach both the BBA & MBA program so I switched to EMBA. I used to teach Strategic Management and Strategic Marketing. I always try to take at least one course. Sometimes I need to take a semester off due to work pressure.
Q: When you were studying in school and college, did you have the dream of doing business? Or is it something that just happened?
RM: Yes, I wanted to do business from the very beginning. My father was a businessman. He passed away in 1984 (may Allah have mercy on his soul). At that point in my life I was in class 7. So I did not have his guidance regarding learning business. I actually had to teach myself, make mistakes and learn from it. I consider those people really lucky, who get a mentor to guide them through the initial stage of business.
Q: You have an interesting academic life – you finished an engineering degree and then went for an MBA before embarking on business. Nowadays most of the CEOs and successful corporates are following this path in their academic life. Do you think it gives you any sort of advantage? It has been said that an engineering degree helps you get the analytical skills and an MBA helps you in becoming disciplined. Do you think that in the recent success you have been blessed with, your particular academic background has helped you?
RM: I would say that an engineering degree is not a must to have to be a successful businessman. Because there are a lot of businessmen who do not have an engineering degree. But when I speak for myself, when one is going through an engineering discipline, it forces them to think in a very structured manner. After so many years in the engineering discipline and after completing my degree, I still am able to think in a structured manner when taking a decision. I go through all the feedback and the figures of the table and then do a proper analysis before coming to a proper decision.
Q: When you went abroad, what type of job did you do in the media consultant company?
RM: It was basically in the marketing sector. Many brands actually want to highlight themselves in the news media. So let’s say you are watching CNN and CNN is doing a news report on automobiles, then obviously Toyota or Mercedes Benz would want to have the picture of their cars in that news piece. Of course, that’s not advertising. You can’t pay CNN to show your car as well. But CNN or rather the news outlet also needs pictures, branding and information. The big name brands would be our media company to have those pictures and information so when any news outlet would do their news piece, they would call us and say, “we are doing a piece on automobiles or soft drinks or cigarettes or whatever it is, what kind of information or pictures do you have?” At that time, we would try to fit the information and pictures of our clients. It’s a very focused and specialized form of marketing. It’s not direct advertising.
Q: When you returned from abroad, why did you choose to do business under the polymer industry? Most of the successful businessmen start doing business with automobiles, garments or in other similar sectors. Why didn’t you opt along these lines?
RM: Actually my father had shares in a plastic trading company. He wasn’t directly involved though. So by default, I had the shares. The company doesn’t exist anymore. I actually started off in the oil and gas sector. We have a segment, Gasco Industrial Services Company, which is the largest contractor for Chevron Bangladesh. So at that time, a lot of drilling activities were going on over here. We were a very specialized company. We provided equipment, manpower and things needed for particular aspects of drilling. In a gas field, there are various modules. For example, you run a tube through the ground and you test the well. There are several functions that the oil and gas companies don’t do themselves. They outsource. It’s a very technical job. I started that business and got into it. And then later on, because I had one figure in the plastic industry, I started in that industry. My motivation in business is that, when you are involved in something, you need to excel in it. Whatever business I was in, I decided that I would be in the 1st or 2nd or at least the 3rd position – not beyond that. So I increased my concentration in the plastic industry. I have a lot of products in the plastic industry – we make PVC pipes, fittings, doors, all sorts of plastic furniture, household equipment, etc. We have 200+ household items from food containers to buckets, to chairs, to buckets, to mugs, to trays, pretty much whatever else you can think of; and it’s expanding continuously.
Q: In your view, what is the current condition or potential of this industry?
RM: Actually from my view, we are market leaders. In a business a market leader always has the advantage. We simply can’t rest or relax on these advantages. You continuously need to build. Otherwise, somebody else will overtake you. Our country is not too advanced economically. That is why not all of the mass people can afford glassware. The use of plastic is very common in the mass population. As the use of plastic increases, our market penetration increases as well. So obviously, it’s a large industry. Many people have come to this industry. And many people have failed as well. But I won’t attribute the failure to the market itself. I attribute the failure to the management. So it’s your responsibility to figure out ways to raise yourself up.
Q: How many people are working in your company currently?
RM: It’s about 2400 people. And we have also diversified into export oriented footwear. During the last few years, Bangladesh has retained a leadership position in garments because of our low priced labor. Footwear was controlled by China. Around 75%+ of the global market belonged to them. But as Chinese labor cost is up, we believe that we can use our competitive labor cost to our advantage and a lot of buyers are interested. So it’s a conscious decision from our group that we enter into the footwear market. It is going to be the first green footwear factory in Bangladesh. There’s a US based green certification body operating worldwide. It’s called “Leads Gold.” It’s kind of a compliance. Many garments industries are taking the Leads Silver, Gold or Platinum certificate. As it goes up the chain, the rules get very hard. The platinum certification is almost impossible to get. But we are going to get the gold certificate. In about three months time, commercial production is going to begin. We will be the first Leads Gold certified footwear company in Bangladesh, inshaAllah.
Q: Now if we were to look at these industries in the career perspective, what are the possibilities in the polymer or footwear industries? What are the qualities you prefer when recruiting applicants in your industries? Do you prefer students from engineering or marketing backgrounds?
RM: As an educator, I have a number of my own students working for me. The particular advantage is that, I can choose them from my class. But from the business point of view, we recruit a lot of marketing students. We also recruit from HR. HR is a subject or function in Bangladesh that is neglected. But of course, we take our HR policies very seriously. We need happy employees for a better output. In the HR sector, we recruit business school students. In the engineering sector, it depends on our expansion. As we expand, many job opportunities come up for the engineers. We recruit from various engineering universities. As long as footwear is concerned, there is an institution called Bangladesh Leather Technology Institute. We have recruited quite a few engineers from there. Soon we will require a lot of students from a marketing background who have the passion and creativity to convince the buyer about the benefits of buying from Bangladesh.
Q: The most interesting part is that you teach and you also recruit. So many students complain that there are a lot of jobs available for individuals with a marketing or sales background. But finance, accounts or HR sectors are still untouched. What is your opinion on this matter?
RM: Actually what I see from my experience is that, the students who graduate in finance, don’t have any problem getting a job. They get recruited in banks mainly. A lot of finance students are doing very well in banks. They are in the upper mid-level management. Of course, I would also recommend that, if you want to get into mainstream accounts of a company or a corporate enterprise, like our company, we have a public limited legal entity as well, which needs finance people who are certified (i.e. under chartered account, etc.) After graduating from finance, if graduates want to concentrate on their career, they can get a chartered account degree, they will be able to deal with the accounts in the public limited company like ourselves. It is necessary to know the rules of the Dhaka Stock Exchange, etc. since without knowing these rules, a company won’t feel comfortable recruiting them or giving them a leadership position.
Q: If you recruit from NSU or IBA, you know that they have a reputed module of study and practice, so the scenario is different. But when you take a look at new growing universities like UIU, EWE or Daffodil, what is the scenario over there? You must receive a lot of CVs from a whole range of universities. What is your experience regarding the difference?
RM: We actually get a lot of CVs from the public universities. In reference to the private universities, I have taught as a guest faculty in other private universities other than NSU. I would say that the hold in English is not up to the mark. Nowadays, whether you like it or not, you must have a very good hold of the English language. Because you are in Bangladesh and you are communicating with the outside word. You are trying to convince them that your product and service is good enough. So impressive skills in English is a must. If a student does not have a strong foundation in English, I would recommend him to undergo the various trainings that are out there in the market for their own benefit. So that they can increase their proficiency in English.
Q: In any industry, supply chain is a very important matter. What is your opinion over this? Should a student study the supply chain in particular? Is the market growing?
RM: Actually one of our core competency in this sector is supply chain management. We as a company have invested heavily in supply chain. We have bought a very expensive EPR system. We also have a very strong IT department within our company which monitors the supply chain. We are quite integrated in the supply chain that we can individually track our own trucks. We can monitor where particular goods have been shipped out. Basically, we get things done on our own accord. This is one of the reasons we are market leaders.
Q: Please share your vision with us. Where do you want to see yourself and your company after 10 years?
RM: Our vision is to create a lot of employment opportunities. Our country is a country of 16 crore people. If you create and sustain enough employees, profit will follow. We don’t want to make losses. But at the same time, we don’t want to make any sort of abnormal profit either. We want to make just enough profit so that our employees can make a decent living. This would create capital to create more employment. I personally believe that one individual can only eat so much, and buy only so many clothes and wear so many clothes. So it’s not a personal goal of mine that only I want to get rich, I want others to become rich as well. If you employ more people, they will work, they will give output and once a normal amount of profit comes in, you can reinvest in your existing businesses. Again thereby creating more employment opportunities. If you get this thing going, the wing will expand more and more. That is our vision- to create more employment opportunities without becoming bankrupt.
