Faizal Kottikollon and Shabana Faizal have been on an unusual entrepreneurial journey for the past twenty years. It all began rather conventionally with Faizal studying engineering in India and the US before returning home where he met Shabana in 1992. Three years later while on holiday in Dubai, the young couple decided to put down roots and call it home. In 1997, Faizal opened a foundry called Emirates Techno Casting (ETC) in Sharjah to manufacture valves for the oil and gas industry, a decision that was to change their lives forever. The cutting-edge technology processes he developed resulted in his business becoming one of the top three foundries in the world. In 2012, he sold ETC to Tyco International for over 400 USD million.
With the freedom and resources to do whatever they wanted, Faizal and Shabana passed on living a life of leisure and instead sought to better the world around them. They created a philanthropic foundation as well as KEF Holdings which has business interests in infrastructure, healthcare, education, metals and investments. Their goal is to provide poorer areas of the world with the education, training and healthcare they sorely lack through the use of technology and collaboration. KEF Holdings set up the first offsite construction park in the world that uses cutting edge manufacturing processes to partner with local governments and build hospitals and schools in half the time of conventional manufacturing methods.
Today the entrepreneurial husband-and-wife team are joined by their two eldest daughters Sophiya and Sarah transitioning them from founders into the second generation of their endeavours. The family has been recognised globally for their dedication to fighting inequality through education and for their strides in bringing disruptive technologies to traditional industries.
Recently Tharawat Magazine had the opportunity to sit down with Faizal and Shabana to discuss their rise to success and the entrepreneurial adventure they are still on.
Perhaps we should start with why you decided to build a foundry in the 1990s. How did you identify this opportunity?
F: It’s all because of my education. I went to the US to do my second Masters’ degree in Industrial Engineering. When I graduated, I got a job in a company called Inductotherm that makes induction furnaces for steel foundries. So that is where my exposure to the foundry world came in and I found it very interesting because back then it was a very old, outdated, a very traditional business. The world was changing through technology and I said it would be a great opportunity if I could use technology to modernise the foundry industry. We moved to Dubai which was just taking off with the new leadership’s vision and the banks were supportive of new ideas at the time. That’s how I got into the foundry world.
Shabana, let’s get your perspective on this entrepreneurial journey. When you started out, what were the main challenges that you encountered?
S: When it came to business, Dubai was a very new country. People all over the world didn’t know much about Dubai. Nobody thought there could be a factory like ours here, that was the challenge we had to face. But having said that, we had the opportunity to educate people about where Dubai is and invite them into our home. They became friends from all over the world and that was the best thing about the business. We got to meet people from all over the world and appreciate their culture and understand how they work.
When did the scaling begin? When did you go from being a simple operation to getting in league with large competitors?
F: The first year, 1998, was the worst year because the technology that I brought in from Europe, and my own thought processes in building that industry to be different from the rest of the world, really got me into trouble. We almost went into bankruptcy by the end of the first year. I went to the bank and said ‘that it isn’t working well but I’m confident I can come out of it and solve the problem of quality.’ So, I struggled until 2002 to fix all the problems. In 2002, the world accepted what I was doing and I think gave me the confidence to build the world’s largest standalone foundry in 2003. Then we never looked back; we were accepted as a leader, with new thought processes. We shrunk the delivery time to less than half of what the industry was able to provide, instead of 24 weeks we were now able to deliver between 8-12 weeks. So, a company with a revenue of a million dollars in ‘97 grew to a 200-million-dollar business in 2007. And 2007 onwards also was fantastic, to 2012. The company was officially valued at 400 million dollars in 2012 and we exited completely.
Let’s talk about that part because that’s usually where a lot of entrepreneurs get stuck. They stay put for too long, stay attached to this very successful business that they have. When did the pivotal moment come when you said that it’s time to let go and move into a new direction?
F: It was not just an ordinary business. We had created a campus environment where the average age of employees was 23-24 years with more than a thousand people. We created a community centre where employee’s children used to come to every week. It was more about bringing a family ambience into the business. I think, when time for the acquisition came that was one of the very tough decisions – how do we let such a beautiful environment go? Many of the big players in the Industrial and Investments space came into the factory and they were greatly impressed with the whole setup. That is where the whole thing started. Then I went to my auditor and asked them why these big players were so interested in us and were asking for a valuation. And they said the final value was not less than 400 million dollars, a great business with great potential.
My foundry business was creating value for the region: the first foundry in the Middle East, creating a product out of their own raw materials. I would say that we are one of the pioneers that really broke the myth that innovation can’t come out of the region and that technology is only for the West.
S: I was not as attached as Faizal was because it was his baby. It is an emotional rollercoaster for an entrepreneur to go through the sale of his company. There were moments when he would think ‘Is it a good idea? Should I sell the company or should I not?’ Then he would have these long meetings during the due diligence process and he would get frustrated and say ‘why am I doing this?’ And I was in Bangalore with the kids for their tennis training and I remember after one of those meetings, he took a flight to Bangalore and he was like, ‘No, I don’t think I should do it.’ In time, we both knew it was the right thing to do.
After you sold the company, instead of just having a nice quiet investment-arm family office style activity, you went on and opened more operational businesses. Tell us more about this latest stage of your journey.
F: It was a very tough decision to let go of so our business in 2012. We had the kids at home and we traveled a lot. We enjoyed that but something was missing. In our business, we were dealing with many people who are not educated. People from various backgrounds, and the community centre gave a good idea about life, how people struggled. We were all very, very fortunate living in Dubai. So then I said ‘how do we contribute back into these people’s lives’, and that is where the idea for the Faizal and Shabana Foundation came from. We said, let us go and do some philanthropy work in India. Work with the government, support the poor people to get educated, and that is where the second phase of our journey started, with philanthropy.
[ms-protect-content id=”4069,4129″]
How did this lead to your innovative approach to building construction and the business you operate now?
F: You realise how difficult it is to build a school, or any kind of infrastructure in India, because construction is so outdated, technology just isn’t there, and the entire process is manually done. We wanted to think differently and see how fast we can build a school with the government. And that is where this off-site manufacturing technology came into my mind. We went around India to find precast industries and that was still quite new at that time. There were one or two factories that were almost shut down because nobody was really adopting the technology. So, we made a deal with one of the factories and that had bought some machines from Germany. We told them that we would run the plant for three months. We would help train their people, and in exchange they would let us build a new school out of their factory. We built a school in 95 days! As of today, we’ve assisted in the upgrade of another 65 government schools in Kerala.
S: But it’s not only about building the schools, it’s much more. The intervention is more holistic at multiple levels, we provide the teacher’s training, students’ tutoring, we provide them with training in sports, culture, arts, the whole ecosystem. So it’s not just about building the infrastructure. We handhold the schools for five years, make sure they are sustainable and earning enough money. The operational expenses are met by the government. It’s free education.
F: It’s all about velocity and speed. So, we are building homes now in two hours, we are building schools in 30 days. And this vision of mine to speed up the process, to improve the life of the common man, for good quality education, health, that is what prompted us to build the first offsite construction park in the world. Where every element of the building is designed and engineered and manufactured using robotics and automation and assembled like Lego blocks. I spent 100 million dollars on this first factory, which again has created a wave in the Indian market. And also, globally, people want to take this everywhere. To Africa, Egypt, Tunisia, Syria, rebuilding all these countries, even Europe, to rebuild areas prone to earthquakes.
You’ve also expanded into hospital construction and health care, are those the main areas of focus for your philanthropic efforts?
F: Education and Health is what we have chosen as a philanthropy focus. We need to have these and it is becoming too expensive worldwide. I’m not against private healthcare and private schools but they should also be accessible to the common man. And that is where the disparity is. It is our mission to use technology to bring equitable education and quality healthcare to the poor.
How has the experience been transitioning from entrepreneurs to a multigenerational family business? Has it been an easy, smooth transition, or did you have to make a conscious shift?
S: It was quite easy, because in a family business, you talk about business all the time. So, the children were always involved. Dinner time or any meal time, we always discussed with them what we do and what is happening or some of the problems we have. Also, we were happy when Sophiya said she wanted to come back and join the business. She is the eldest daughter and she did her engineering degree in the US and she was working at Kauffman Fellows for a year. We had given her a choice – she was welcome to come back but it was always fine for us if she chose a different path. So, after nine months she felt it wasn’t challenging enough and came home to join us.
F: I think the children got inspired also because there is a meaning in the business. If there’s a meaning in your business, I think everyone would like to be part of it. So, everyone has a role to play. I think the model of bringing the Foundation to play a larger role was enabling them to bring in their own interests. Being a free man from a young age, I didn’t want to impose anything on my children. They have to choose what they want to do in life. We don’t own anybody and life is very short to really control anybody. However, I take my business very seriously. So if you are not very committed, you cannot be in the business. But if you are, then give it a hundred percent!
What has become the greatest future wish that you have as an entrepreneurial couple? Something that you’d really like to see happen. Or to put it in your vocabulary, what is the ultimate problem that you still would like to solve?
F: We want to build more than a thousand schools in the next few years working alongside the government. Starting in India, we would impact at least two million students. Imagine two million students coming out of education with open-mindedness. If we can eliminate the disparity and intolerance that everyone is facing and create humanity within us, that for me would be the most satisfying legacy to leave behind. We cannot continue like this in the world. I think it’s become a very important task for people who have money, people who have knowledge, and people who have political power to start thinking and doing. If we are not going to take this world to the next level, we will destroy the world by ourselves sooner than we realise.
S: One of the things that attracted us to India was that we knew we could make an impact that we could feel and we could see for ourselves better than anywhere else. Besides the schools we plan to build, we have also adopted eight villages around the construction park. And we want to create a model village where people don’t have to go to the city to earn a good living. The children are all educated there, the skills developed. We don’t want to see any discrimination based on religion or caste, creed, color or gender. We want a society where people respect each other; to see what we can do to make the world a better place. And maybe we are dreamers but that’s all we wish for.
[/ms-protect-content]