Sadruddin Hashwani, a Pakistani businessman and the founder and chairman of the International Hashoo Group, moved to Dubai in 2008 after his hotel, Marriot Islamabad, was targeted by a violent bomb attack. Hashwani sees Dubai as a cosmopolitan city bestowed with a unique geographical location and a remarkable aspiration to grow and thrive. In a crisis-stricken world and a turbulent middle east, Dubai stands for him as a symbol of stability and safety. He believes that the rulers of Dubai have granted it with best atmosphere for investments and business: up-to-date infrastructure, constant opportunities, tax exemptions, comfortable living and a society free of crime and racial and ethnic hostilities that dominate even the most developed countries nowadays.
He has observed recently that most of his fellow businessmen and entrepreneurs prefer doing business in Dubai rather than any other place in the world. This is why he decided to move to Dubai and build houses for his children also. He wants his grandchildren to attend good schools and universities and receive the best learning out there and he thinks that Dubai is the place. With its distinguished academic establishments and quality educational system, Dubai stands as the place for building a solid future for young people. Older people also feel safe in Dubai with its developed health system and highly professional hospitals.
Hashwani believes that the Ruler of Dubai is a very intelligent man who knew how to turn his Emirate to become the hub of international business and the safest city in the world. Freedom of trade, flexible and updated laws, full-fledged services, an open society and safe streets is what makes Dubai for Hashwani the best place to live and work.
Sadruddin Hashwani founded his Hashoo group in 1960. His initiation in the domain of trade was a modest with a small food distribution business and he went on to become the main exporter of rice and cotton in Pakistan.
After the nationalisation of his companies in 1973, he ventured into the hospitality and tourism industry. He inaugurated the first hotel in 1978 as a franchise of the Holiday Inn Hotels. Currently, it is the Marriot Islamabad. Pakistan, at the time, lacked five-star hotels, so Hashwani went on building new hotels in different cities and resorts in Pakistan. Today, Hashoo Group is considered as the magnate of hospitality industry in Pakistan.
Hashwani kept expanding his business and venturing into new industries such as power, mining, ceramic, real estate, merchandise, insurance, pharmaceuticals and eventually hospitality. The power sector was also a basic concern of Hashoo group through exploring and producing gas and oil. He expanded the works of his oil group to go beyond Pakistan and was involved in Kazakhstan, Libya, Sudan, UAE, Italy, USA with ongoing offices in Geneva, London and Houston. Hashoo Group is now a pioneer in power business and in sustainable development.
In 1988, Hashwani founded Hashoo Foundation, a charity which supports sectors of education, health and training. It has played a great role in providing about half a million Afghani refugees with jobs. He has persistently sought to advocate progress of his country and to establish and consolidate ties with other countries and entities all over the world. In 2014, he was honoured with Grade of Commander in Belgium’s National Order of Leopold II by His Majesty King Filip of Belgium and with the Golden Medal of the Civil Cross First Class of the Kingdom of Belgium in 2015 for his role in the socioeconomic development of Pakistan and for improving the relations between the two nations.
Hashoo investment conglomerate is now the owner of many companies including the Pearl Continental Hotels that hold the franchise of Marriot in Pakistan, Ocean Pakistan Limited (OPL), Zaver Petroleum Corporation, Orient Petroleum (Central Asia) Limited, Osprey Petroleum Company Inc. and Burshane LPG in addition to property development projects in several countries.
Such a remarkable career achieved by a man who was dubbed the fifth richest person in Pakistan and its pioneer businessman in 2016 by the Pakistani press, led E Business Review to meet him and introduce his achievements and philosophy to its readers. Noting also that as Bin Hindi Outlet has launched its initiative for the translation of 100 books on business and development and the publishing of a book on the biographies of 100 distinguished entrepreneurs in 2017 – 2018 in collaboration with the Lebanese Dar Al-Hadaek Press and E Business Review Magazine, the initiative’s first achievement will be the translation of Sadruddin Hashwani’s autobiography.
From sleeping under the stars in a desert to sleeping in your own five-star hotel, how can you describe such a fascinating trajectory? What were the basic turning points that guided you?
I grew up in a middle-class family that lacked many luxuries. As a child, I learned to be self-sufficient and to take care of myself. I used to tidy my clothes and I helped my mother doing house chores and buying groceries before going to my evening school. Entering into the world of business was a mere coincidence. I didn’t pass the medical school admission test so my mother made me a partner in a joint venture with my brother-in-law who was twenty years my senior. This was to fill the gap that my brother left when he had to accompany his wife who travelled abroad to pursue her medical studies. Thus my boyhood was over and a new stage of serious hard work started. Actually I was not just a partner. I was the person doing almost everything at the office including the paper work in the morning, collecting and processing the bills and orders and eventually providing different areas in Pakistan with commodities and food.
Such business entailed travelling all over Pakistan on public transport in cold as well as hot weather carrying my sleeping bag with me. I slept on board of trains and on the back of trucks in the cold desert of Baluchistan. I was very serious from the very beginning; I left the recklessness of the young boy behind and embarked upon an ambitious journey in life where “failure” didn’t exist.
What gains did you score at that stage?
Trade provided me with great experience, although I gained so little first and ended up with no capital. However, my true profits were rich practical experience and my goodwill at the market which I acquired through my intricate work and honesty.
I had to be innovative and learn how to start a business with no money so I worked as a sales agent for Pakistan Steel, owned by one of the Pakistani influential families, where I sold baling hoops to ginning factories. The difference between the wholesale price and the retail price was my only profit. There was a chance for me to expand in the steel market, so I developed my trade into dealing with other steel products such as beams and rods in addition to other steel equipment for ginning mills.
My skills of coming up with innovative solutions while going hard at work were crystallised during this stage. I had to open several bank accounts and I had to keep track of my payments. I always kept my word with my clients and thus I established my goodwill at the market. I studied the steel trade meticulously and realised that Pakistan is far from being self-sufficient of steel which is imported from foreign markets. I did my homework and followed all the details of prices and exchange rates and found out that I could purchase steel at low prices and resell it for a reasonable margin of profit. By time, I found myself in control of the commodity market without any background whatsoever.
Such steps sound like giant shifts. How did you deal with these grand transformations in your career?
That initial steps formed my access point to the domain of cotton trade. Those owners of ginning factories, who trusted my skills and observed my command over the commodities market, offered me selling their products by commission. Thus, I deployed such lessons I learned from the steel trade and I had to look for potential buyers of such cotton products.
At that stage, my career path became clear before me. Senior merchants took notice of me and my brother who joined me at work. Our company, officially founded in 1960, acquired a huge order of 500,000 tonnes of cotton to be imported to the Soviet Union. That was in 1965 and it was hard to provide financing for such operation, especially that we were new comers at the market. Again, I had to be innovative. So I offered a share of the profits to a bigger company in lieu of their financing. The deal was accomplished and my credibility was established. That one step represented then a milestone in my career path and gave me enough motivation for future deals.
My mindset grew more mature and professional and I observed rich opportunities in the cotton trade. Few businessmen ventured into exporting cotton from Pakistan due to complicated procedures and risks characterising the whole process. Hence, the market was controlled by a handful tycoons. On the other hand, my success at my previous order encouraged me to think further. I created my own pattern: a business of low profit margin, quick turnover and controlled costs.
I capitalised on the trust I earned by my clients and on my integrity at the market and tailor-made prices. We thus launched our business on such foundations and exported cotton to North Korea and Japan. Orders kept on coming in also from China, Poland, Yugoslavia, Czechoslovakia and the Soviet Union. I used to go to the office from 8 in the morning and stay there until midnight. In the evening, I would go to the docks to oversee the loading of exported cotton. Nevertheless, I cherished my social life in the weekends.
What were the main challenges you encountered throughout your career and how could you manage to overcome them?
I elaborated much in my book on how changing ordeals into credit needs immense courage. I was blessed with such courage and persistence that saw me through my career. In this context, I recall being in Toronto on a business trip in 1973 when my brother called frantically and told me about the nationalisation of our cotton and rice business. I had to think thoroughly beyond that current predicament. My philosophy was to resist that storm and keep my business going by changing gears. On the flight back, my concept was born. Pakistan was ready to step into the welfare economics but it lacked luxury hotels that attract tourists. Thus, my new approach came into being.
So now to turn into your next giant leap to a new realm. Let us talk about how to make the most out of bad situations changing them into good experiences. What happened, for example, when the cotton trade was nationalised?
That was a sudden predicament but my faith in Allah and in my country kept me going. Private businesses were nationalised in Pakistan and many people were worried and they fled the country. I never wanted to leave. I stayed and decided to open up new horizons and those who fled the country have lost both their business and their homeland. The country also lost in that process. The government didn’t seize my company but it nationalised the trade itself and the government exported cotton on its own but due to the bureaucracy and corruption of officials and due to the lack of the flexibility of entrepreneurs, the operation wasn’t efficient. I decided, when the nationalisation took place, to change the track of business.
What difficulties did you face venturing into a new business and what are the risks?
Whenever you start a new business you come across many difficulties. Trade was my main business and I was known as the King of Cotton in Pakistan. One day, Mr. Bhutto decided to nationalise export companies and that was a blunder for Pakistan. Starting a new business is no risk. Life itself is a risk! The way I understand life and business is that your experience will push you ahead and help you carry on.
So, how did you start the hotels? What were the foundations on which you established your new business?
Building hotels was my passion and I struggled to get all of my hotels erected. I faced difficulties with both the government and the banks. I have always been outspoken and feared no one but Allah and I have always highlighted the wrongdoings and criticised corrupted politicians and bureaucrats, so I was not on good terms with the government of Zia. The banks, hence, refused to give me loans directly. They wanted to give the money to the contractors and other craftsmen who were building the hotel. I knew they wanted to delay payments and create problems on site, so I used my own funds and borrowed money from other sources and finished building and equipping my first hotel. For me, it was not a question of profits. It was rather a challenge to my reputation.
What principles and techniques do you employ for starting up hotels and operating them?
I believe in reducing the costs of establishment and operation. In a country with low hotel tariffs and high taxes, reducing your costs improves your bottom line. Taxes are levied on profits, so you have to spend money on renovation rather than paying taxes which is permissible. Expenses are thus charged to earnings and I used to reinvest that capital in improving the product rather than in paying taxes. One day I have to pay my taxes but first I improved profitability and such profits were reinvested in improving the services and products. Accordingly, efficiency should be improved also. I have also believed in choosing the right people for doing the job. Selecting professional, hardworking efficient staff brings efficient service and customer satisfaction. Satisfying my customers has always been one of my first priorities so that to gain loyal customers. If you don’t serve people well, they will not come back.
Did you have many competitors back then?
Yes there were competitor like the Sheraton and Hilton. Those hotels were run by the multinational chains themselves. I wanted to do things differently and I wanted to operate my own business. This way, I cut costs and augment my profits and finally score successful results.
What do you tell us about the Marriott experience and how do compare it to your other hotel experiences?
I got the Holiday Inn franchise initially because there was no other good franchiser before I acquired the Marriot franchise. We took the franchise for marketing purposes since they have a large network of reservation system, but we manage the hotels ourselves. Murtaza, my son, is managing the hotel, but the name Marriott helps in marketing the hotel wherever you go. The well-known name brings on international bookings and it gives good impression even here in Dubai. Today, it is the largest company in hotel industry.
Knowing that Marriott has never granted a franchise, how could you get that franchise?
I went to Washington and met Bill Marriott for a permission to buy a hotel in Huston Galleria but they wanted to assign the management to one of their ex-employees. I wanted both the hotel ownership and management so I did not buy the hotel but I asked Bill Marriott to give me a franchise. He told me that he had never given franchise before but he wanted some time to think. Later, they sent a team to examine the property and they approved its good quality and the company approved giving me the franchise. Marriott is a better name and has a wider network.
Marriott dispatches surprise inspection teams to check the quality of service at the hotel and to assess how we maintain the reputation of the name. Thus, we have received many awards because they noticed that we have more experience in running the hotel due to the special nature of the hotel market in Pakistan. Whenever we have assessment, we receive awards and recognitions for our quality services.
How do you introduce your hotel brand to the world?
Pakistan is a unique country. Pakistan has its own market, its own culture and its own quality of food and taste. We had to recruit a staff who is specialised in Pakistani cuisine. Foreigners cannot make authentic Pakistani food and we serve Pakistani food in most of our menus. However, if I establish a hotel in another country, I adapt to that country’s culture. I don’t serve Pakistani food there all the time. I like to respect local traditions and values.
Do you grant franchise? And do you have any future plans for expanding in Asia?
We are open to franchising but only to someone who understands the business well. Once we gave a franchise in one of the cities in Pakistan but later we withdrew it due to their poor performance. They failed in maintaining the good quality of our hotels. Whenever we give a franchise, we absolutely keep checking for the quality of service. I do not want to tarnish the reputation of my name.
At the moment I have no plans of expansion. Thank Allah, I have my plate full of my own commitments in my country. Pakistan has a population of 200 million people, so there is much to do there. The quality of life and the level of education are improving in Pakistan, so I think there will be many opportunities there in the near future. There is no point in expanding abroad while you can invest in your own country in lower costs.
At the end of the day, what conclusions do you derive from your experiences? And how do you explain your success philosophy to the young generation of entrepreneurs?
The most important thing is that you learn from other people’s experiences. A successful man is one who is involved in his own business to the fullest and in our line of business, one should know how to be hospitable himself. Persistence and hard work always pay. When I started working, my transformation from a happy go lucky teen to a serious worker amazed many who had known me earlier. With the utmost zeal of a new convert, I became intolerant of failure. When my business was nationalised, I stood on my grounds and refused to be kicked out of the market. I found new tools and fought back. That is how young people should face life and that is how I instruct my children.
I believe that even if I am a successful and a rich man, my son has to learn the process of running a hotel from the outset in order to become a successful man himself. I sent my brother’s children to Hong Kong to the Holiday Inn to learn the business but they were unhappy washing the dishes and cleaning the rooms. They cut their training short and did not finish the programme. So, I wanted my children to be trained and to learn all the details of the industry. Both Murtaza and Hasan Ali learned the business well.
Never think you can wear a suit and go to a hotel to work. This is not the way things are done. You need to put on the same uniform others are wearing. It is very hard for the children of a rich family to adapt to such training process but they need to learn how to do things properly and there is no other way to do this.
Nowadays, life is full of choices. Those young people out there should find their own way of life. You can find entrepreneurs who start with a small enterprise and end up with making it a wonderful success story. My advice to the new generations is: do your homework and follow your passion. Getting a job in this field, one has to make use of it as a rewarding source of learning and a full experience through which he can beat the challenges and obstacles and seek success and knowledge in terms of running a business and meeting its targets. He has to keep in mind all the time that he is building his own business and it will get much developed with long term expertise. Do not rush and do not hesitate at the same time. Create your own pace and keep it up. A modest beginning may always become a milestone for learning and development in order to meet one’s aspirations
Finally, always remember that customer satisfaction is the outmost important goal of any business and to score good results you constantly need create a masterful balance by cutting the costs of your operation but preserving its high quality.