Home ›› 17 Jul 2022 ›› Business Connect
He never considered becoming a businessman during his childhood and teenage years. In his student life, he wanted to be a civil servant. But in real life, Abdul Matlub Ahmad has ended up becoming the head of one of the largest groups of companies in Bangladesh.
The untimely death of his father had put their family’s future at risk. After the 1971 Liberation War, in the midst of scarcity, Matlub’s life took a different turn when he secured a scholarship from the University of Oxford in England.
While studying at Oxford, without much capital, he began collecting handicrafts or vegetables and fruits items from different parts of the country and started an export business. After finishing his studies, he expanded his business to cars and commercial vehicles.
And now, Matlub is the chairman of Nitol-Niloy Group, a successful conglomerate that has business in various sectors through 12 companies.
“My father and mother moved to Dhaka from Kolkata in the fifties because of the Hindu-Muslim riots. Their first home in Dhaka was at Fakirapool. I was born there in 1952,” he reminisced while talking to The Business Post.
“Later, my family moved to our second home near Narinda. While living there, I completed my studies at Saint Gregory’s High School and College and Notre Dame College,” he said.
“I always wanted to be a CSP officer when I was a student. I never imagined that I would come into the business. But my thinking changed after my father, who was a judge, died in 1971. After he passed away, we fell into a massive void because we didn’t have much.
“There was no hope for our survival and that was before the war. After the war, it became a big challenge to move forward with so many brothers and sisters. At that time, my main goal in life was just to keep everyone alive,” Matlub remembered.
After independence, he went to the University of Oxford in 1973 with a scholarship. Besides his studies, he started taking various products, including handicrafts, fruits and vegetables, from Bangladesh and selling them to Bangladeshi expatriates and foreigners.
“I used the money I earned to support everyone’s [his siblings] education since I had a scholarship covering the cost of my studies,” he said. “We have been exporting even before the birth of the Export Promotion Bureau.”
“When my son Nitol was born, I used to spend two-three months abroad for work before I could return home because I would visit many countries in one go. I would come home and see that Nitol has grown. I was missing seeing him grow up. So I decided to run a business that would allow me to stay home and spend more time with my son.
“But no bank used to give support for export business at that time. We had to consult with the government and form many schemes for export. Around 1980, I became fully involved in the industrial and import business because it was easier,” he added.
He continued, “I believe that family comes first and then everything else. This enabled me to take care of my family and do business as well. I was also able to get my family involved in the business. Now everyone is in the family business.”
Currently, Nitol-Niloy Group has a diversified profile with exposure to assembling of vehicles, bus body making, after-sales support, transport and aviation services, insurance and financial entities, manufacturing, real estate, properties development and sports promotion.
The group’s annual turnover is approximately $225 million and it has invested around $200 million in its businesses so far, according to its website.
Emergence of Nitol-Niloy Group
Matlub got fully involved in his business after he finished his BA and MA in economics at Oxford and came back from London. At that time, he was fascinated by the car business.
“During my stay abroad, I saw that those who have become rich by earning more money around the world are either in the business of oil or car. I went for the car,” he told The Business Post.
“I started by importing reconditioned cars from Japan and selling them. Until 1978-80, I imported and sold Japanese reconditioned cars, buses and minibuses. In 1981, I set up my own company Nitol Motors.
“At the time, Hindustan Motors in India were making Bedford cars. I went for importing cars from there and selling them. It was very successful. But when Pragati signed a sole manufacturing deal with that company around 1985-86, restrictions were imposed on direct import,” he said.
Afterwards, Matlub signed a contract with the Eicher Group in 1986 and managed to sell the highest number of vehicles by 1989. That intrigued India’s Tata Motors so much that they approached him with an offer to sell their vehicles in Bangladesh.
“I counter-offered Tata with the idea to do business in a joint venture and the two companies would jointly produce vehicles in Bangladesh. After Ratan Tata agreed, I established a commercial vehicle manufacturing factory in 1991.
“But it wasn’t easy to do that since the private sector was not allowed to manufacture or assemble automobiles back then,” he said.
The seasoned businessman continued, “At that time, fully manufactured cars were still being imported. When Tata approached us in 1989, I made it a condition that we would set up the factory under a joint venture.
“Because Tata was already a big name, I anticipated that the government may give us the licence if Tata wants to establish a factory. And that came true. Tata and we got the first commercial vehicle manufacturing licence and set up the factory in 1991.”
About $5 million was the first tranche of investment. Since then Nitol-Niloy Group has been in a joint venture with Tata.
“Within three years, Tata became the leader in Bangladesh’s commercial vehicle market. To this day, we are still the market leader even though the market share was much bigger back then,” Matlub said.
It’s all about reputation
Talking about the beginning, Matlub said, “We never had the capital to do business. However, in business, capital is not the main thing. It was about reputation and trust. Our reputation was our capital. People knew that they could give me products on credit and they would get their money.
“We used to buy on credit and sell for cash. The difference between the two amounts was our profits. Keep in mind that this was a news business that I started. I had handed over the family businesses to my brothers.”
He continued, “I followed the same formula when I started this [automobile] business. I had a lot of well-wishers who would invest and give me products on credit and I would sell them.
“Later, the banks got involved gradually. Businesses need capital, but after a certain period, reputation becomes more important than capital. Before that, you need to earn trust and confidence. Does the person you want to do business with trust you? If they do, it doesn’t take cash to do business.”
“My wife Selima Ahmad had an ambition. She wanted her own identity. At first, she tried to get a bank job. Then I told her to join my business. She decided to join after I convinced her. She is still with me and involved in the family business while providing more than enough support.
“If your life partner is beside you, it is easy to succeed in business. Sometimes it may be harder to listen to what she has to say, but if you think about them deeply, it becomes clear that she is helping you to be successful,” Matlub said.
At the beginning of the car business, Selima looked after sales and was very successful in convincing the buyers, he said beamingly and added that her reputation among buyers was and is still very good.
Selima is also the MP from Cumilla 2 constituency at present and the founder and president of the Bangladesh Women Chamber of Commerce and Industry.
Expanding the business
Matlub said he now wants to invest in Autoclaved Aerated Concrete (AAC) Blocks or green bricks — a new alternative to red bricks — in Chhatak, Sylhet and establish a factory for tyres for buses and trucks.
“I’m thinking about setting up a joint venture for food items as well. Some food products will be produced jointly with an Indian company for the people of Bangladesh.
“Moreover, I am looking at opportunities to invest in several sectors for businesses that have not been introduced in this country yet — especially cars, buses, trucks, two-wheelers and three-wheelers that are electric,” he added.
“We are thinking of starting a logistics company. I am also planning a joint venture with a foreign ridesharing company. If we can do well in it, that business will grow big,” he added.
Matlub also spoke about the Kishoreganj Economic Zone — the country’s ninth private economic zone — which is being set up by Kishoreganj Economic Zone Ltd, a concern of the Nitol-Niloy Group.
“We are building the border wall now. There were a lot of problems with land acquisition. We faced off one case after another. However, we are now at the final stage after resolving the issues,” he said.
“This zone has already started receiving investments in various sectors. I hope many industries will be established here by June next year,” he added.
The zone is set up on 91.63 acres of land near the Bhairab-Kishoreganj Highway in Pakundia upazila. It is expected to create jobs for at least 15,000 people within the first five years.
Challenges then and now
Matlub also opened up about the challenges they faced since they started doing business four decades ago.
“Communication was the main challenge at the beginning of the business. People did not know the price of any product. For example, one did not know if they were buying a Tk 10 product at Tk 15 and so they could not complain,” he said.
“Importing goods, availability of dollars and funding were also big challenges. And now, one of the major challenges is skills,” he added.
Nowadays, people can easily find out everything by checking on the internet and will not buy products if sellers charge higher prices, Matlub said.
“But you will need skills if you want to make a profit now after selling products at a reasonable price.
“The big challenge now is how to make a good product at the lowest cost and sell it to the buyer at a low price. The production cost needs to be lower than your competition but production needs to be higher than theirs as well,” he said.
Sons to take over in 5 years
Speaking about future plans, Abdul Matlub Ahmad shared his views for his company and his two sons — Abdul Musabbir Ahmed (Nitol) and Abdul Marib Ahmed (Niloy) — who will eventually take over the reins.
“Working with me, my sons have developed and honed their skills. In future, they will face obstacles and learn to overcome them. They will do things tenfold more than I have done so far,” he said.
Nitol is currently the managing director of Nitol-Niloy Group of industries while Niloy serves as the group’s vice-chairman. Both brothers, who completed higher studies abroad, also run the operations at several wings and companies under the group.
Matlub said, “I plan to leave my two boys equipt so that they can run this business properly by maintaining continuity in the future. Selima and I will take a step back so that they can come to the front. Within five years, they will take over the business completely.”
“Mistakes happen when you work on establishing a company and expanding it for the first time. Now I am showing them the right ways to correct and avoid them in future. I want to give the company to my sons after addressing our weaknesses and problems,” he stressed.
“Our group currently employs around 7,000 people and I won’t increase this manpower too much. But this will at least double, including those here and abroad, in five years,” he said.
A word to the wise
Matlub said, “Truth be told, if you invest Tk 100 now in the country, you can get a profit of Tk 10. But you won’t get the same profit if you invest the same amount abroad. Bangladesh is now the best destination for investment in the world.
“Because of that, the position we had five years ago has now changed. Now, Bangladesh is ahead of all in terms of investment return. That’s why I think as long as the investment here is complete, the country will have enough foreign exchange to invest abroad.”
The veteran businessman hoped that foreign investment in Bangladesh will increase once the Covid-19 pandemic comes under control and the Russia-Ukraine war situation improves.
“It’s also not right that investment is not increasing in the country. Domestic entrepreneurs are expanding their investments. However, new investments and foreign investments are not coming as expected.
“I think investments will increase a lot when the situation stabilises in future. New entrepreneurs will have to know the business before they invest,” he said.
Addressing new entrepreneurs, he added, “There is no shortcut in business. You will create your business. You will have to build a good relationship with the banks with honesty while gaining the trust of the people around you.”
Talking about contributing to the business community, he said, “I have always been interested in trade politics. I have worked for the business community and will continue to do so.”
“Overall, I think, to enjoy life, businessmen have to work as fellows. That’s what I did and they rewarded me by making me the president of FBCCI,” said Matlub, who led the country’s apex trade body from 2015 to 2017.
“Trade organisations work with the government as consultants on behalf of the traders to help create an easy environment to do business,” he added.
