TWENTY-TWO KILOMETRES FROM Lahore, along the Lahore-Ferozepur road, is a dusty little village. At its centre are six factories, spread across nearly 100 acres. This is Nishatabad, one of the six production centres of Nishat Mills, which together produce up to 65 million kilos of yarn and 308 million metres of cloth. Inside the brightly lit, air-cooled factories, workers sit in seemingly endless rows, weaving, cutting, and sewing, in well-oiled shifts. Barbara Cartland and Mills & Boon novels lie on the bedside tables on the sets where linen is displayed for potential buyers, in an effort to create a homely look. The factory is a reassuring place. “When I come in to work, it seems as though everything is all right,” says Ahmed Khan, a worker in his late thirties, who has worked in the sewing section for two years.
It is this image of ordinariness—of Pakistan at work—that Mian Mohammad Mansha, the country’s richest and most powerful businessman, strives to sell at a time when the word Pakistan evokes visions of terrorism and assassinations. Mansha is chairman of the Karachi-based Nishat Group, Pakistan’s largest conglomerate, whose interests range from textiles to financial services to cement. Its annual revenues exceed $2 billion (Rs 8,886 crore), and its assets are worth more than $9.6 billion. The 64-year-old magnate, who plays a leading role in lobbying for better industrial policy and regulation in Pakistan, frequently highlights the fact that it’s a young country, in interviews and at industry meetings. Pakistan’s population of 180 million, he notes, is “demographically younger than even India”. Its location makes it the perfect conduit between what Mansha calls the “three great centres”: China and India to the east, Afghanistan and the Persian Gulf countries, and, beyond them, the Western world. He points out that labour is cheap in Pakistan, and that there are business opportunities and growth potential in sectors such as textiles, power, and finance. The group’s offices in downtown Lahore are dotted with posters bearing pictures of people whitewater rafting and the words, “A journey’s greatest danger isn’t tough terrain. It’s weak planning.” An apt metaphor for Mansha’s business philosophy.
Mansha’s son Hassan Mansha, who looks after the group’s power business, says that his father sees violence primarily as a livelihood issue. Hassan explains: “If you could see your life getting better, would you turn to violence? No.” His father adds: “If you study the places with the most violence, and the people who propagate extremism, you’ll see in almost every case that there’s very little opportunity. Some people, for their own interests, spread the message of violence. They get their foot soldiers from places where there’s little opportunity. If you can create opportunity, the battle is won.” According to Mansha, the 270,000 spindles, looms, both shuttle-less and air jet, of the group’s flagship company, Nishat Mills, and the turbines of Nishat Power, are all part of a vision for change.
Of course, it’s a vision that doesn’t hurt the bottom line, either. For instance, Gap Inc., a Nishat Mills client for a decade, buys 8 million to 10 million metres of Nishat cloth a year, and around 600,000 denim and work trousers that retail abroad under well-known Gap group labels such as Old Navy and Banana Republic. Levi Strauss is also a buyer.
An official of one of Nishat Mills’ international clients, requesting that his company’s identity not be revealed, says: “Nishat has been consistently ahead of the curve as far as textile technology goes. Even 10 years ago, they were far ahead of India. The security issues in the country hinder them to a degree, but they’re still right there, with the best of the world.”
For Mansha, business is a relentless balancing act. As Fortune India asked dozens of Pakistanis—analysts, business heads, politicians, media persons, and others—for their impressions of Mansha, two things became clear: that he is perhaps Pakistan’s best “salesman”, and that he must constantly juggle business and politics.
Soofian Zuberi, head of Asia-Pacific fixed income and equity distribution at Bank of America Merrill Lynch, based in Hong Kong, has worked with Mansha for the past six years. Among other things, he was involved in a 2006 global depositary receipt (GDR) issue on the London Stock Exchange for the group’s Muslim Commercial Bank (MCB), and a $106 million purchase of U.S. company AES Power’s Pakistan assets. “While helping develop Pakistan’s economy through market-leading enterprises, Mansha is extremely international in his outlook. The Nishat Group has partnerships from the U.S. to South Africa to Malaysia. The idea behind the GDR was to build a global shareholder register and promote best practices at MCB.”
MANSHA'S TEAK-PANELLED OFFICE IS testimony to the fact that he must constantly balance business and politics. On his vast black marble-topped desk rests a DVD of Wall Street: Money Never Sleeps, and a copy of the book The Edifice Complex: How the Rich and the Powerful Shape The World by design expert Deyan Sudjic. The tycoon gestures towards a bookcase, allowing the hint of a smile to cross his impassive face. “Usually, there are two kinds of books on executives’ shelves: how to make money, and how to remain Zen. But half my books, maybe more than half, are on politics.” Among the titles on his shelves are My Year in Iraq by L. Paul Bremmer, and The Future of Freedom by Fareed Zakaria.
The rimless glasses on his patrician nose give Mansha a distinguished air, and he speaks in a voice that rarely rises above a hush. Nothing about his manner gives an indication of his clout, or of a personal past that is intertwined with Pakistan’s turbulent history. He’s among the world’s few billionaires who have gone into exile fearing political trouble at home, and that has left its mark.
It was in 1995-96—barely four years after purchases of key companies in swift succession transformed Mansha from the owner of Pakistan’s biggest textile mill into the owner of one of the country’s biggest conglomerates—that the magnate moved to the U.S. for a year and a half. What triggered his self-imposed exile was raids on his factories. Many saw him as being close to outgoing prime minister Nawaz Sharif, whose arch-rival Benazir Bhutto had returned to power in 1993 (her first stint was 1988-90). Most of the decade was a see-saw, as fortunes rose and fell with the two politicians.
After Bhutto’s government fell in 1996, Mansha returned to Pakistan. Soon after that, he found himself sitting next to her on a flight. “She opened the conversation by noting that I was a friend of Nawaz Sharif,” he recalls. “I told her that was untrue. It was a wrong impression people created about me.”
Mansha, with his penchant for understatement (in a country where personal bodyguards are commonplace, hardly any security is visible around him or his family), makes exile sound quite agreeable. “My second son, Umer, was studying business (at Babson College in Massachusetts), and we all lived in Boston. It was good family time. We were going to go for Umer’s graduation anyway. Let’s just say this was an extended break.”
And yet, when asked about the toughest moments in his 40 years in business, Mansha mentions the exile as one. He doesn’t elaborate, but given the political situation back in Pakistan, there was the risk of losing control of his businesses, or returning years later to find them severely damaged. The other tough moment is also political: 1999, when Pervez Musharraf deposed Nawaz Sharif. “There was,” Mansha pauses, searching for a suitably understated expression, “an impression that people who have made money have made it the wrong way. Our papers and facilities were scrutinised.”
THE MANSHAS ARE AMONG THE “22 robber baron families” made notorious by a Pakistan planning commission list in 1968. The chief economist at the time noted that these families, among Pakistan’s wealthiest, controlled 66% of the country’s manufacturing, and 87% of the banking and insurance industries. Much of their family wealth was wiped out by Zulfikar Ali Bhutto’s nationalisation spree in the early 1970s. But in the early ’90s, Nawaz Sharif’s privatisation boom benefited many—especially Mansha, who bought up companies that were being privatised.
The bouts of nationalisation and privatisation in Pakistan happened at roughly around the same time as in India. But unlike India’s prime minister P.V. Narasimha Rao and finance minister Manmohan Singh, Nawaz Sharif had a personal interest in privatisation: His family’s Ittefaq Group had lost considerable wealth during nationalisation.
In 1991, Mansha and 11 partners bid successfully for Muslim Commercial Bank (MCB), which was, and still is, the country’s third largest bank. In 1992, Mansha and his friend Tariq Sayeed Saigol, chairman of the Kohinoor Maple Leaf Group, together bought two cement companies, D.G. Khan Cement and Maple Leaf. After four years, through a mutual buyout, Mansha got D.G. Khan Cement , and Saigol, Maple Leaf. Both friends proudly point out that at the time of purchase, D.G. Khan Cement produced 600,000 tonnes a year, and Maple Leaf, 450,000 tonnes, and that today, production is at 5 million tonnes and 3.6 million tonnes respectively. MCB has fared well, too: Last year, its net profit ($198.5 million) was the highest among all banks in Pakistan.
One of Mansha’s greatest strengths has been his sense of timing. “He knows how to seize the moment,” says Saigol. “For instance, he knows better than perhaps anyone in business in Pakistan how to benefit from the stock market. He entered the market in the early ’90s, when there was hardly anything on the Karachi Stock Exchange.” MCB is the third highest weighted stock on the KSE 100 index of the top companies based on market capitalisation. “He really showed the way,” says Saigol. “He has always said he wants to use the power of the markets like Dhirubhai Ambani did.” Four Nishat Group companies—MCB, Nishat Mills, Adamjee Insurance and D.G. Khan Cement—are on the KSE 30, an index of the most liquid companies.
Mansha’s big move came in May 2008. In a deal that took most of Pakistani industry by surprise, he sold 20% of MCB to Malaysia’s Malayan Bank for $907 million. “The timing was perfect,” says Saigol. Benazir Bhutto had been assassinated in December 2007. In the elections that followed, the party of then president Pervez Musharraf, the Pakistan Muslim League-Quaid-e-Azam (PML-Q), was defeated, and the two main opposition parties—Bhutto’s Pakistan People’s Party (PPP) and Nawaz Sharif’s Pakistan Muslim League-Nawaz (PML-N)—jointly formed the government, with Musharraf still president, albeit subdued. In September 2008, Pakistan suffered one of its worst bomb attacks, at the Islamabad Marriott Hotel and by year end India-Pakistan ties were at a historic low after the Mumbai attack.
“Somehow, there was a gut instinct that the time was now,” says Mansha. “We got Rs 490 (about 257 Indian rupees) a share, or five times book value. In three months, the stock was down to under Rs 300. Even in this, politics affected business. We were lucky to spot the opportunity at the right time, and be ahead of the political curve.”
That cash did more than propel his billionaire status—it came during the global recession. “That one move allowed him to do what virtually no one else from Pakistan was doing—buy assets,” says Salman Shah, former finance advisor to the Pakistani prime minister, who has personal rapport with Mansha.
Between 2008 and 2010—the years of the global downturn—Mansha started a leasing company in Azerbaijan, and two power plants with a total capacity of 765 MW in Multan, Pakistan. He also bought the iconic St. James Hotel in London. All of this cost him $165 million. And now he’s looking for a bank in Indonesia, and for banking and power opportunities in West Asia and China as well.
“I’ve always gone against the grain,” says the man who, in June 2006, disregarded conventional wisdom and many advisors, to go ahead with a $150 million GDR issue as the KSE crashed to a seven-month low. “We were the first Pakistani company to list on an international stock exchange (the London Stock Exchange), and the domestic crash was a blip,” says Mansha. As it happened, MCB got offers totalling $707 million—more than four times the GDR amount available.
“Mansha has never worried about sceptics,” says MCB senior executive vice president Ali Munir, who shares his boss’s passion for fast cars. “He listens to everyone, but the final decision is always his, and it’s quick. He’s always been able to see the big picture.”
The Nishat Group’s achievements are proof of Mansha’s business chops. MCB is No. 1 in profitability (in terms of profit before tax) and market capitalisation in spite of being only the fourth largest bank in the country. “Last year, it gave the highest cash dividend and opened the largest number of branches,” says former finance minister Shah. MCB’s capital adequacy ratio—available capital to assets at risk—of 22.07% is not only the best in Pakistan, but also among the best in the world. In the past eight years, MCB stock has given an average return of 86%, compared to the KSE’s average of 24%.
The group also includes Adamjee Insurance, Pakistan’s largest general insurance company, and, of course, the country’s biggest textile company, Nishat Mills. The group’s four power plants generate more than 12% of the country’s output, which makes it the largest private producer of electricity. It’s also the country’s biggest foreign exchange earner and its largest private-sector employer.
Mansha’s rival in banking, Allied Bank chairman Mohammad Naeem Mukhtar, praises his belief in mutual growth. “He shares profits. If the company grows so do the employees,” says Mukhtar. But anyone who builds so much in 15 years is bound to have a few critics. “Mian Mansha is a smart businessman, no doubt, but how far is he from his robber baron ancestors?” asks Haji Jan Mohammad Gandhi, CEO of ARY, a media consortium that includes entertainment and news channels. Gandhi and his media network campaigned hard so that Mansha wouldn’t get control of United Bank and Pakistan State Oil, which he was planning to acquire with J.P. Morgan, and then the local unit of the Royal Bank of Scotland. “He has monopolistic tendencies,” says Gandhi. “But under Musharraf, we could stall a few things.”
Mansha claims his attempts to buy those companies were foiled on technicalities. “We were close to finalising the deal, but each time, there were vested interests,” he says. However, a high-ranking old timer in the PPP echoes Gandhi. In 1991, Mansha’s and his partners’ bid for MCB was the third highest, and yet it won, he says. “They won because of his ties with Nawaz Sharif. It’s an old partnership,” says the PPP official.
Mansha says the “perception challenge” is an unending battle. “In the MCB bid, we were the only serious players, who wanted to run the bank to world-class standards. Some others were there just to try to stall us.” He adds that he would rather be low key. “But this perception of being close to politics is something that we’ve fought for a long time. Economics and politics are irretrievably interconnected. One is indispensable to the other.”
MANSHA HAS PUT CONSIDERABLE THOUGHT into creating an effective command structure and succession plan, dividing the Nishat Group roughly equally between his three sons. Raza Mansha, the oldest, who studied international business at the University of Pennsylvania, runs D.G. Khan Cement and sits on some of MCB’s committees. Umer Mansha oversees the textile businesses. And Hassan, the youngest, who studied business administration at Curry College near Boston, looks after power. Hassan’s wife Iqraa oversees the St. James Hotel. The other, smaller companies, such as charter jet operator Pakistan Aviators and Aviation, are jointly run by the family.
It’s this kind of clear thinking that’s seen the family through generations. The family’s original textile businesses date back before Partition. Although his ancestors are from Chiniot, a town about 130 kilometres from Lahore (now in Pakistan’s Punjab province), most of his family had settled in Kolkata (then Calcutta).
But after 1947, Mansha’s father, Mian Mohammad Yahya, and his five brothers moved out and set up a cotton and textile business in Faislabad. Nishat Mills, started in 1951, was named after Mian Mohammad Yahya’s eldest brother’s grandson, who died young. Business boomed as the Korean War (1950-53) spurred demand for army uniforms, bandages, tents, and other supplies.
Mansha’s early schooling at Sacred Heart Convent, Faislabad, Pakistan, and higher studies in business administration at Hendon College, London, fostered a modern bent of mind. London is where he bought his first luxury car, a canary yellow Jaguar (today, he owns a red E-class Jaguar convertible, three Mercs, a Porsche turbo, a BMW 750, a Range Rover, and a Volkswagen, besides a turboprop plane and an eight-seater jet). His idyllic London years were cut short in 1968 when his father died, and 22-year-old Mansha had to return home to run the factories in Faislabad.
“One of the first things we did was to get into every aspect of the business, from weaving to dyeing to making finished garments,” says Mansha. “We couldn’t be big without delivering the entire value chain.” For the next 17 years, he spent five days a week in the Faislabad factory, returning home to Lahore only on weekends. “I knew he was building something big, and for that, sacrifices were needed,” says Mansha’s wife Naz, who runs the 26 stores of Nishat Linen, the retail chain of Nishat Mills that sells home fabrics and clothes across Pakistan. By 1990, Nishat Mills was the country’s biggest textile company, and Mansha had a presence in every area of textiles, including garments and industrial textiles, not just fabric.
Salman Shah says Mansha made a bold move by hiring young MBAs from the reputed Lahore University of Management Sciences to acquire government assets. “He wanted a new perspective on judging assets,” says Shah. “It helped him break from traditional thinking, and also infuse new blood into the group.”
His personal life, too, reflects his modern attitude. His 16-bedroom bungalow in the posh Gulberg area of Lahore (he has another 7-bedroom home in Karachi) is dotted with artefacts that include antique Buddhas, although Islam forbids graven images. “It’s only the very orthodox who follow those beliefs,” says Mansha. “We have always believed in a global world and a global worldview.”
All this is not to say he has discarded his Chinioti heritage. Indeed, he identifies closely with his close-knit community. Mansha recently visited fellow-Chinioti and Congress leader R.K. Dhawan in New Delhi. The two men gathered with others of their ilk to watch the World Cup final at a friend’s home in the Indian capital. “Mansha is a true Chinioti,” says Dhawan. “There are many prominent Chiniotis on both sides of the border: former chief justice Jeevan Lal Kapoor, and many of the artisans who built the Taj Mahal and the Jama Masjid.” Mansha’s Lahore bungalow has a door carved more than 100 years ago by Chinioti craftsmen.
Community ties give Mansha a connection to India, with which he seeks greater trade ties. “We have constantly pushed, and will continue to push, for the opening up of trade between India and Pakistan,” he says. “It makes perfect sense. We’re trying to send our goods to the Middle East, Europe, China, and America, and here’s a trillion dollar economy next door. You’re buying textiles and cement from all over the world—why not from us?” says Mansha. “I believe trade is the best route to peace. The total volume of India-Pakistan trade is only about $2 billion at present. That’s nothing. We can do five times that in a couple of years, if the borders are opened for business.”
Shah notes that when Mansha is faced with a challenge, “he takes some of the most unconventional routes”. A good example of this occurred soon after he acquired D.G. Khan Cement from the government. There was rioting at two of the factories. Mansha and his associates were attacked with stones every time they ventured near the sites. Despite his perceived proximity to Nawaz Sharif, Mansha says pointedly, he couldn’t get an appointment with the prime minister. “Then, I heard that on Thursdays, the prime minister comes home from Islamabad to Lahore, and a bunch of people go to meet him at the airport,” says Mansha. “So I also went and stood there. He came out and said, ‘What are you doing here?’ So I told him: ‘I can’t get an appointment with you, but I have a problem. You’ve sold this cement plant, but I can’t enter it. What use is privatisation unless I can use what I’ve bought?’” Within weeks, Mansha says, the problem was fixed. “But had I not gone and stood at the airport, nothing would have moved,” he says.
These days, weekends find Mansha at his new pet project: a giant farmhouse near Lahore, complete with swimming pools, elevators, and fields—and a nine-foot-deep lake to farm fish. His weekday attire of Brioni suits is replaced with Ralph Lauren casuals and a Gulfstream cap. Two of his grandsons are horsing around nearby, as their father Raza runs after them. Over kebabs and Coke, Mansha explains that he plans to grow vegetables and fruits, and to farm fish. “You see, to farm roe, you need a deep pool,” he says. “In the summer, the fish need to go deep down to escape the heat. There’s joy in growing your own food.” But the entrepreneur in him is irrepressible. “This farm is quite big,” he says. “We can even sell the produce.”
He’s happy at the farm, says his wife, far from the political shenanigans in Lahore and Karachi. Not too far, though: His neighbours are brothers called Shahbaz and Nawaz Sharif.