In 1962, before even the formation of the UAE Federation, P.T. Asnani arrived in Dubai to start a new life. Eleven years later, the rapid development of both the country and its economy sparked his entrepreneurial spirit; and Loyal Building Materials (a trading company) was born.
With one employee (himself), Asnani built up the company to the place it is today – with more than 178 employees. After the success of Loyal Building Materials – and noticing it was trading more than 1,000 tons of steel pipes a month – the business owner decided to branch out into manufacturing. Asnani Steel Industries was established in 1997 to complement the trading business, and now meets targets of manufacturing 35,000 tons of steel pipes a year. Next year, Asnani is aiming to produce 45,000 tons, having already met his yearly target.
So how did one single man in a new country build such successful businesses? “Frankly, I don't bother about the competition,” he said.“I bother about the best I can do.” This philosophy stood him in good stead during the economic crisis of 2008, when – although the profits lessened – the company still turned a profit. “2008 was a big blow for everyone… including us. But luckily we did make profit: it was reduced, but we didn't lose anything because we were being very systematic, without being greedy,” he said. “So what we import and produce, we sell. This is the policy we've adhered to until today,” he added.
The past three years in particular have been a period of growth for the manufacturing subsidiary. Asnani attributes this to the good relationships he’s built up with his raw materials suppliers, who offer “open credits” to the company. “This was the main source of improving our production and turnover,” he said. In 2009 the manufacturing side moved to Ras Al Khaimah and a bigger two-unit facility, which is also expanding to include a third unit this year. This third unit will further diversify the company’s offerings, branching out into the manufacture and cutting of metal sheets with a new selection line.
However, one of the main aspects Asnani attributes to the success of his two businesses has been the conservative nature of accepting credit. “We get some of our raw materials on credit, which gives us some comfort. [But] it balances out and we are very, very conservative when it comes to extending credit facilities,” he said. “We are very, very conservative.” Raw materials are imported from Asia (Korea, Japan, China, Taiwan), as well as neighboring India and Saudi Arabia. The latter has proved to be the most convenient to date, as loads are delivered straight to the Ras Al Khaimah factory, without having to be cleared through one of the UAE’s ports.
His advice to other aspiring entrepreneurs is to plan out any business venture thoroughly – unlike how he started his first company, Loyal Building Materials. “Planning and setting up well obviously make your life very comfortable, easy and smooth. You know how you are doing [in the business],” he said.
So if he were to start up the business again, would he do it without a plan? “No. There is no such necessity; but you do learn a lot from the venture I went into, and that learning itself is a great advantage and gives you good experience,” he said. This, he continued, is vital to the success of any company. “You can lose profit… but your experience will always remain with you. Someone can loot your profits, but experience? No.”