How A Sindhi Family Shop Turned Into $1.8 Billion Multinational

Mohan Vaswani's father, who started selling textiles in 1948 from a shop the size of a shipping container in a small town in Indonesia, once told him "One day you will operate across the world."

Eighty-year-old Vaswani now oversees Tolaram Group, a Singapore-headquartered company with an estimated value of $1.8 billion. Tolaram is building a port in Nigeria, producing paper in Estonia, running a bank in Indonesia and supplying power in India. It has food production and distribution operations across Africa and sells to more than 75 countries. Now, the company is expanding into digital services and plans to add a hedge fund to its wealth operations.

How the company got here is based on those 70-year-old roots, forging a group that still feels more like a collection of startups and separate businesses than a multinational conglomerate. One of its latest ventures, an online loan business called Tunaiku, operates almost as a distinct venture within the group's PT Bank Amar Indonesia.

And while the family controls the firm, day-to-day operations at all 18 business units are run by professional outside managers, who are encouraged to try new ideas.

"We are not afraid," Vaswani said. "When we see opportunities, we are ready to take the risk."

During its seven decades, Tolaram has ventured into about 100 businesses, according to Vaswani's nephew Sajen Aswani, who is chief executive officer of the group. About 75 percent failed, but the one in four that succeeded made up for it, he said.

"The Tolaram expansion over the past decades has been one of extreme growth, said Oriano Lizza, a strategist at CMC Markets Plc. He said the backbone of the company's success was diversification and the element of risk taken to expand into many countries and businesses.

Vaswani ascribes the group's culture to the fact that the family are originally from Sindh, a province in today's Pakistan that has long had a reputation for producing entrepreneurs at home and overseas.

"The Sindhi are a business community," Vaswani says. "They are entrepreneurs. Even if they only have a small amount of money, they start their own business because they don't like to work for anyone else."

As early as the end of the 18th century, family members had come to Indonesia, a popular destination at the time for Sindhi expats. Having worked in Indonesia before, Vaswani's father, a Hindu, joined them after the partition of India in 1947 to escape the religious violence that had engulfed the region, setting up his shop in Malang on the island of Java.

Vaswani joined his father's textile business when he was 10, and took over the firm at the age of 19. He expanded from distribution to manufacturing and established plants abroad -- the U.S., the U.K., Germany, South Africa and the Baltic states.

"In my family, you got handed over the reins at an early age. Unlike today, there was no need to study first."

As an example of how he pushed the group into new businesses, he tells how he set up the first major overseas operation in the 1970s.

"I told a friend of mine who has business in Africa that I wanted to diversify out of Indonesia. And he said 'Why don't you come to Africa?'"

"Well, I don't know anything about Africa," Vaswani replied.

His friend told him to come for a two-week holiday to see. Vaswani traveled to Nigeria, then Ghana and Ivory Coast. A month later, he started a business in Lagos in Nigeria, which had the highest per-capita income of the three and where people were prepared to pay upfront, lowering the risk.

In his office in a high-rise industrial block on the outskirts of Singapore, Vaswani looks at pictures of his family -- from one decorated with a Hindu flower chain of grandfather Seth Tolaram, after whom the company is named, down to his nine grandchildren.

Vaswani didn't follow the typical Asian family business model, where operations, wealth and family members are interwoven and all controlled by a patriarch.

"We decided that family members stay at the shareholder level," says Vaswani. "If a professional hired from the outside makes a mistake, you can sanction the person. With family members, it's more sensitive."

That may be one reason the company has avoided the fate of many family businesses that fail once the enterprise is handed over to the second or third generation.

"A concern could be one of over capitalization and a lack of expertise within different business units, although the longevity and sustainability of the group would argue against that," said Lizza, at CMC Markets.

Overall control remains in family hands. Tolaram's business unit, comprising all commercial operations, is headed by Aswani, the CEO, who studied economics at the University of London. The Ishk Tolaram Foundation, a philanthropy unit established in 2016, is headed by his daughter Sumitra Aswani, a trained doctor. The family office, however, is managed by a team run by Manish Tibrewal, who joined in 2004 as a finance controller in Tolaram's noodles production unit in Nigeria.

The group is ultimately owned by Mohan Vaswani, his two sons, three nephews, a cousin and the foundation.

As chairman, Vaswani is no longer involved in day-to-day operations, but he comes to the office each day and is consulted on major decisions made in the family office and the business.

His passions are philanthropy and gardening -- when he travels to Tolaram's operations, he makes sure every factory has a well-kept garden.

He also oversees the expansion of the group, which now has more than 10,000 employees, compared with about 1,000 in the 1970s, when the company focused on Indonesia. He says he prefers the group to grow organically rather than through acquisitions, hiring young people and grooming them to the company culture.

The company is currently expanding in parts of Africa and Indonesia, says Aswani the CEO, with a focus on consumer-related and digital services. Tunaiku has clocked up more than 1 trillion rupiah ($65.5 million) in small loans to individuals, company data show.

Binding it all together is a strong family loyalty that has seen the generations move from one country to another and start businesses around the world.

"In our DNA, our allegiance is to the Tolaram family," Aswani says.