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is where my exposure to the foundry world came in and I found it very interesting because back then it was a very old, outdated, a very traditional business.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.