“One shouldn‘t be afraid of death, as the fear of death will make you fear life too, and you will only try to survive. And a survivalist can never be an entrepreneur. You need more than survival instincts to be a successful entrepreneur, you need to be courageous and you have to be a dreamer,â€ says Vijay K Shah, Founder Chairman, Jawalakhel Group of Industries.
According to Shah, innovation is the most important thing for him in business. He strongly believes that no business and no country can develop without innovation. “Copying others can only get you so far. A lot of big alcohol companies came to Nepal, but they left even sooner, because they all lacked innovation and technology,â€ says he.
Shah says that the key to success in business is the ability to innovate and adopt new technology, to train the persons involved appropriately and the ability to assimilate it altogether.
Early Life and Childhood
Shah was born in 1948 in Nepalgunj to late Ram Narayan Shah and Ram Devi Shah. His parents, especially his father, were a very big influence on him. He says that his father instilled in him all the ethics, morals and values which he carries still today. “He always used to tell me that I will not receive any property or money, I will only receive education and family background,â€ shares Shah. Shah‘s father was reputed and rich, but he never gave him a single rupee to waste. “I knew there was abundance, but I also knew that I couldn‘t waste a single rupee or a single grain of food. This made me realise the value of money from an early ageâ€, he says. His father strongly disliked mediocrity, and inspired him to be the best in whatever he did. “My father used to say that even if you become a sweeper, be the best sweeper. So I always strived to be the best in whatever I endeavoured,â€ says Shah.
The first five years of Shah‘s life were spent in Nepalgunj. His father was very particular about him getting good education and Shah was sent to India at the age of five to study as there were no schools in Nepalgunj at that time. He did his entire schooling and his A-levels from St Xaviers, Patna. Then he left for England for higher studies, but after staying there for some time, Shah says he didn‘t like it there. “I was a quite rebellious and I couldn‘t accept the very structured life in the colleges there. There was just too much of discipline. There is beauty in it but I didn‘t find meaning in it,â€ recalls Shah. Unsatisfied Shah left for the United States.
The Turning Point
In the US, he enrolled into Xavier University in Cincinnati. He started his undergraduate in Business Management, but took all his electives from Masters. Shah says he completed all the required courses of Masters before even completing his Bachelors degree. And then came a turning point in his life. During a summer school in Production Management class, a classmate who was also his professor asked him on what topic he would like to do his research on. Strangely, at the very moment, he was opening a letter he received from his father in Nepal. “In the letter, my father said I could study whatever I wanted, but I should also study something about alcohol and its business. He said he could hire people for management, but it was hard to get technically trained people in Nepal, or even from India,â€ says Shah. That was deciding moment for the future course of his life.
Stranger still, the same professor was also the Vice President of National Distillers, a huge US corporation at that time, and he offered Shah an internship in the distillery. Shah was overwhelmed at the size and magnitude of the corporation and the distillery. The internship got him interested in Chemical Engineering, and he completed this degree from the University of Cincinnati. “I had no plans of becoming an engineer, but I wanted to understand all about alcohol and get better at technology. I wanted to know about better distillation techniques and global technologies,â€ he says.
Jawalakhel was Shah‘s ancestral home in Kathmandu, and it was there that the traditional distillery was established in the 1950s. After returning to Nepal in 1969 with the required expertise for the alcohol business, Shah wanted to build a new distillery with newer technology. “It was all running traditionally. There were only three distilleries in Kathmandu back then, and the market was very small,â€ he recalls.
He wanted to reshape his life and his family business. He asked his father for three million rupees to set up a new distillation plant. And on a mission, he was frequently travelled to India to get machinery for his plant. “It took some time to get the distillery ready as many parts needed to be handcrafted too. I fabricated all the required parts in India as no required parts were made in Nepal,â€ says Shah.
Finally, after a lot of time and effort, Shah did what was unheard of at that time. He built the first five column distillation system outside of USA which was known as Jawalakhel Distillery. He then looked for a niche market to make his mark. “There were whiskies and rums being manufactured at that time, so I thought of a new thing. There was no vodka manufactured in Nepal and I opted for it,â€ says Shah. That‘s how Ruslan vodka was born in 1973. He manufactured other liquors too, but Ruslan was the most loved, and still is his major product.
The Business Now Vs Then
Shah is the fifth generation in the alcohol business in his family. But he dared to dream and create and shape the business to a modern approach. Shah‘s father taught him about the family business from an early age. There were over 12,000 people working in distilleries at that time. “There was no proper industry and distillation system, but four generation old traditional bhattis that manufactured legally tendered country alcohol. The liquor was sold in jerry cans and other containers back then,â€ he recalls.
Prior to the formation of Jawalakhel Group of Industries, the family business was divided into many smaller companies. “Before the group, the management of the companies was not coordinated and things went haywire many times. So all the family members decided and consolidated all the shares and made it into one group, and thus came the Jawlakhel Group of Industries,â€ explains Shah.
The group currently manufactures 25,000 litres of ENA (extra neutral alcohol) per day which is the base for all liquors. Under the group there are four distilleries namely Himalayan Distillery, Asian Distillery, Vijay Distillery and Rolling River Distillery. Ruslan vodka is the major product of the group, which according to Shah, accounts for 70 per cent of total hard liquor sold in Nepal. Other products include Royal Stag whiskey, Blue Diamond gin and Golden Oak whiskey among others. According to Shah, every distillery has its own laboratory and follows very strict quality control. “The labs perform detailed analysis through sophisticated technology, and finally I myself test the samples. We are implementing more automation in the labs to reduce human errors,â€ says Shah. The group also has the best research and development team in Nepal, he claims.
The Way Ahead
While building the distillery, Shah says he made a commitment to himself that he will do something that will give him a lead in the market and technology by at least 20 years, and by the time the others reach him, he should have something newer to give him the next leap. And that‘s exactly what happened. After 20 years, he started Himalayan distillery which is the world‘s first 13-column distillation system, an innovation way ahead of its time in Nepal.
Again Shah says the group is embarking on a new design that will take it 25 years ahead of the competition. â€We are starting an entirely new distillation system that is highly automated and technically advanced. This is currently under design in the United States. Once again, I will beat the competition by offering liquors of unmatched quality,â€ he states determinedly. In addition, a new brewery is also in the offing by the name Raj Brewery, after his son and MD of the Group Raj B Shah. The brewery will manufacture Warsteiner, a globally renowned German beer. If things go as planned, Shah has plans of doubling the Group‘s turnover within the next five years. He also has a dream of paying Rs 10 billion in taxes, which he says he will realise very soon.
Despite leading one of the most successful businesses in the country, Shah still opines that it is very tough to do business in Nepal, and he blames the system and the laws for it. “The environment in Nepal is not conducive to business at all. The laws have to be made so that every Nepali comes within the ambit of law, not because we have to please some foreign countries or international community. Laws should be flexible, and should suit the people and the soil,â€ Shah says with conviction.
He advises that new entrepreneurs should overlook obstacles, be industrious, and gain expertise in whatever they do. “Believe in yourself, give your hundred percent and do not copy from others. Being innovative is what does the trick, and don‘t work too hard, work smart,â€ concludes Shah.