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Pakistani Business Leader

Sadruddin Hashwani “My life has been hard at times. I am a self-made man and have never depended on my

parents. I took it as a challenge, touch wood and thank God because it has been a

success. I am very satisfied that I have achieved many of my goals.”

(Sadruddin Hashwani)

Introduction:

Sadruddin Hashwani, is one of the top 10 richest men of Pakistan, is the boy who made it.

The life of this tall, gangly, self-made entrepreneur tells us that a different future is

possible. It tells us that there is power in words and there is power in conviction. It tells

us that if he can be ‘Sadruddin Hashwani’, so can anyone be; provided he or she is

willing to go an extra mile.

Hashoo Group of Companies was established under the leadership of Mr. Sadruddin

Hashwani. In a period of some three decades he through his single handed dedication and

commitment to the Profession has transformed this Group in to a leading industrial group

of Pakistan, well known for its forward-looking approach, and highest standards of

quality and integrity.

Starting with Cotton Trading, Hashoo Group of Companies today boasts the only chain of

Five -Star Hotels in Pakistan namely The Pearl Continental Hotels chain and the Karachi

Marriott and the Islamabad Marriott Hotels with presence in all the provincial capitals

and the Federal Capital except one. Today, Hashoo Group of Companies besides hotel

industry encompasses oil and gas exploration, mining, ceramics, pharmaceuticals,

tourism and travel. It also has considerable investment in real estate. Mr. Sadruddin

Hashwani with his keen eye on the future is now guiding the Group to enter the field of

Information Technology (IT). Towards that end a wholly owned subsidiary of the Group

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known as Net 21 (Pvt) Ltd is currently operating as Internet Service Provider that is

planned to serve as springboard to launch substantive IT projects.

The oil and gas exploration is being done under the Orient Petroleum Inc, which has

recently met with successful find. The Group is constantly on its forward march. Some

examples of it are: The construction of Pearl Continental Hotel Bhurban in the

picturesque Murree hills, Construction of new wing called Atrium Wing of The Pearl

Continental Hotel Lahore equipped with the most modern amenities, Continual up-

gradation and modernization of Pearl Continental Hotels and Islamabad as well as

Karachi Marriott Hotels, Acquisitions of the state-of-the-art Ceramics Factory to design

and produce crockery and a plant known as Gelcaps to manufacture halal gelatine

capsules for the pharmaceutical industry according to the most stringent quality

standards. Mr. Hashwani’s Vision knows no bounds and it will be difficult to predict as

to what will be his focus of attention tomorrow. For him time is short and the Art is long.

Therefore, his philosophy is that each moment of life should go towards advancement of

cause of humanity at large.

Mr. Hashwani runs Hashoo Foundation whose sole objective is to engage in

philanthropic projects in support of social and cultural causes and for the uplift of the

deprived. Through this Foundation he not only fulfils his corporate responsibilities but

also more importantly his unwavering commitment to promoting the good of common

man.

List of companies owned by Hashoo group:

Hotels and resorts:

Pakistan Services Limited

Hashwani Hotels Limited

Hashoo Motels

Hotel One by Pearl Continental

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Hotel One by Pearl Continental

Tours and travels

Pearl Tours & Travels (Pvt) Limited (rent a car division)

TransAir Travels (Pvt) Limited

Destinations of the World - Pakistan

Information technology

Net-21 (Pvt) Limited

Tejari Pakistan Ltd

Oil and gas

Ocean Pakistan Limited.

Zaver Petroleum Corporation Limited

Minerals

Zaver Chemicals (Pvt) Limited

Zaver Mining Company Limited

Zaver Oils Limited

Pharmaceuticals

Gelcaps (Pakistan) Ltd.

Ceramics

Cera-e-Noor

Investments

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Hashwani Sales & Services (Pvt) Limited

Hashoo Holdings (Pvt) Limited

Trading companies

Hashoo International (Pvt) Limited

Hasan Ali & Company (Pvt) Limited

Genesis Trading (Pvt) Limited

Welfare

Hashoo Foundation

Umeed-e-Noor

However, this huge empire has a tale of utmost conviction and hard work to tell.

Sadruddin started with nothing, after that everything was sheer profit. His drive and

ambition brought him wealth, power and a taste for more in a world where those things

mattered. He started from scratch. However, his skills brought him to better things –

money doesn’t grow on trees, true; but he proved to the world that it is certainly easy to

find if you have the commitment.

History:

Chairman of Hashwani group Mr.Sadruddin Hashwani contributed in various field of

Pakistan. He contributed in the field of tourism, real estate, Pharmaceutical, IT, and oil

and gas etc.

Sadruddin Hashwani’s forefather were in business his parent wanted to saw him doctor

but he used to play cricket and took interest an college union activities and failed then he

realized he did not waste his time in these activities.

At the age of 18 he became sales man of steal product, although he belonged to a very

strong financing family. His family has migrated from Iran. He started export cotton. He

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exported first consignment has sent to Russia in 1965. That was too short and the giant of

the export business laughed at him.

But by the help of God and his hard worked he progressed and known as “king of cotton’.

Then he started Rice business. When Pakistan separated from Bangladesh there was a

huge quantity of rice. He decided to export of rice and he became the largest exporter of

rice and made huge money.

When government nationalize the trading companies. He went to Canada and remain

jobless he had a opportunity to go the new York and continue his business, but he

decided to live in Pakistan with his parents. Now he decided to build hotels in his own

homeland others criticized him but this is his emotional decision as a Pakistani.

He has build holiday inn in 1978 in Islamabad .1977 when governor Zia and prime

minister Zulfiqar Ali bhutto being in power. Pakistani circumstances are not valid or

investment nevertheless, he builds another hotel in Karachi.

There were only five hotel in Pakistan he build intercontinental hotel with the help of

general Ayub. Then he build hotel in Dhaka, Karachi, Lahore, Peshawar and Rawalpindi.

When Holiday inn’s 10 year contract expired, then he renamed hotel Holiday inn as

Marriot. He met Mr.Bell Marriot and he granted franchise for hotling.

PSL was a organization of managing hotels but it was not satisfied with the quality of

intercontinental. So govt decided to privatize PSL and invited several investors to give

bid. Mr Hashwani offered a highest price because his record of best hotelier.

When the management contract of intercontinental expired, he did not renew it. Because

that management did not managed that properties well. They were also charging a great

deal of money. So he decided that instead of giving intercontinental it would be better to

buy a new company and improve these properties.

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Pearl continental hotel Karachi is the member of the leading grouping world. He build PC

hotel in bureban that is very beautiful and considered a dreamland of Pakistan,

He added 300 more room in PC Lahore. The International Financial Corporation and

Central Depository Company of Pakistan financed the project. Then he saw a big chance

in Lahore and build to floor tower with 600 more rooms which was well furnished.

He has five star hotels in Pakistan but building a hotel is very risky one. The cost of a

hotel in Pakistan is same as London and Dubai. It is very tough task. If he invested

200,000 dollars on each room, then he has to charge200 dollars per day. Islamabad

Marriot has one of highest sales with 110 dollars per night.

He find a local name such as Taj Mahel in India and renamed his hotel business as pearl

continent Hotal .

Sadruddin Hashwani had spread the network of hotels all over the Pakistan and set

example for other business men to follow him. He has build PC Gawadar in Gawadar

port.

He has no only contribution in cotton , rice and hotel management but also invested in

tourism and tour guidance , rent-a-car services. He has franchised the for people who can

do their booking for traveling all over the word. He has 200 rents a car for the help of

tourists in pearl continent Hotels.

Hashoo group has started investing in energy and water sectors as Pakistan had been

facing these problems since last two decades. As a child he had wish to explore in oil and

gas business.

He bought occidental petroleum and paid a high price for company. He drilled 200 wells

and made seven discoveries. Then he had majority shareholders of Zaver petroleum,

which was the name of his mother.

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Zaver had a large discovery in Kohat where he was 10-5% with OGDLC( oil gas

development company limited) . He had seven discoveries with OGDLC in another

block, but he had given it to OGDLC to do operate it.

Another sector where he served Pakistan was high tech-ceramics Cera-e-Noor in

blochistan. This plant has capacity of producing 10000 pieces a day. This plant of

ceramic was being established to meet the needs of crockery of his chains of hotels. The

plant was meeting the requirement his hotels along with other companies such as Avari

hotel, PIA even ambassies and govt was using the ceramics. He established another

company named as “Gelcaps limited” which was Halal and use for medicines.

How he started:

His parents wanted me to be a doctor. He was in a science college at the time and was a

very keen sportsman who played cricket seven days a week. He also became involved in

the college union. Unfortunately he did not do well in my exams and was a failure as a

student. That is the time when he realized that he should not have been wasting his time

with sports and union activities when he had not yet finished my education.

But that was a challenge. At the age of 18 he began as a salesman selling steel products,

to various industries because he did not want to be a burden for my parents. He started

with steel, moved onto grain, and eventually in 1965 when he was 25 years old we got an

opportunity to participate in the export of cotton. The first consignment we sold was to

the Soviet Union. It was a very small quantity and the giants of the export business were

all laughing at us then. The first year was a very difficult one but for him it was a

challenge for them to be asking: "who are these new kids in the cotton trade"?

However, in five years they had achieved the position as the largest cotton exporter and

we became known as "the king of cotton". He used to work 365 days a year from nine in

the morning until midnight. They had low cost operations and the cotton business was not

easy but God helped me and they were always ahead of our commitments.

The next opportunity was our involvement in the rice trade. When Pakistan separated

from East Pakistan, which is present day Bangladesh, there was huge surplus of rice that

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used to go to East Pakistan. This rice was now available for export and he came into that

business, and again within one year he had become the largest rice exporters in the

country, and when the government decided to nationalize the trading companies involved

in cotton, rice, barley, etc., he was in Toronto and became jobless due to the actions of

the Government of Pakistan. His parents were living with me and I came back to Pakistan

even though he had had many opportunities to go to New York or to continue my cotton

trading in Liverpool or in London. But he decided to remain in Pakistan and spend time

with his parents because I owed it to them and to my country. Then he began thinking

about building hotels. While the government was nationalizing, he was purchasing real

estate, and companies such as New Jubilee Insurance and everybody was laughing

saying: "Nationalization is taking place and you are investing in Pakistan!"

But this is my country and he had and continues to have an abiding commitment to it. He

decided that he would not halt my contribution, which meant continuing to build for the

country. It was not a commercial decision, but rather an emotional decision. His goal was

to be in Pakistan.

In the early seventies he expanded his business interests as a pioneer in Pakistan's hotel

industry and real estate development. He seized the opportunity to build the Holiday Inn

in Islamabad in 1978, and then again two years later in Karachi.

The Islamabad Holiday Inn was the first to be completed in 1978. In 1977 Prime Minister

Bhutto was ousted from power and General Zia declared martial law. That was again a

difficult time for Pakistan as it went through transformation to incorporate Islamic rules

and regulations. Nevertheless, this did not prevent Sadruddin Hashwani from doing what

he wanted to do. It was not for any political party or any government, but rather a project

which he had undertaken for his own country. ‘Hashoo Group’ built another hotel in

Karachi, which was again a Holiday Inn. The reason it was a Holiday Inn was that they

allowed Sadruddin to have a franchise whereas other hotel brands were not prepared to

give him a franchise because they wanted to manage the hotel themselves. However, he

wanted to be in the driver's seat and to manage the hotels himself.

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After that, Intercontinental was built with the help of President Ayub Khan. He had a

vision that there should be hotels available. Thus Pakistan Services Limited, which

Sadruddin owns today, was established by the Government of Pakistan, which held some

of the shares. They were able to give free land to Pakistan Services Limited to build these

hotels. The Intercontinental Group had also put its own money into the project. There

were other investors such as the American company Pan Am and Prince Sadruddin Aga

Khan. They all pooled their resources and the government came forward and gave the

land for these five hotels to be built. One of them was in Dhaka, and the other four were

in Karachi, Lahore, Rawalpindi, and Peshawar.

These initial projects laid the foundations of the modern tourism and hospitality industry

in Pakistan. Sadruddin’s vision has always been to contribute towards developing this

important sector of our economy at par with world standards.

The contract with Inter-Continental expired and “Pearl Continental” became the new

name all over. Today, the Pearl Continental in Karachi is a member of the leading hotel

group in the world. Sadruddin Hashwani built a hotel in Bhurban, PC Bhurban - a

beautiful hotel from which one can admire the mountains.

Pearl Continental is the name which has captured the market, to say the least. In Lahore

everybody calls it PC and it is the meeting place for people in the city. It is easily

pronounced and widely recognized.

Marriott too, belongs to Hashoo Group. When Hashoo Group started using the Marriott

name it was one of the first times in the history of the corporation that they had given a

franchise to a hotel that was not directly under their management control. An

achievement for Hashoo group, indeed. Sadruddin Hashwani terms it as a matter of great

satisfaction because when he met Bill Marriott he had never thought about the franchise.

Then they sent their people to inspect these hotels before offering the franchise. As a

matter of fact, the franchise agreement of the Marriott was made based on Hashwani’s

hotel contract and drafted here in Pakistan. Today the format of franchise agreements has

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been initiated by the Hashoo Group and Sadruddin Hashwani is very satisfied that

Marriott decided to recognize the product and lend it their name.

Sadruddin Hashwani believes that in everything you do today there is a component of

image. What you wear, how you groom, and how you speak are all of the individual

efforts that you do to create your own image. Similarly in the service industry you have

to make sure that you are in best shape in order to provide the best possible service and to

keep on spending money in order to improve the product. Today in the Marriott ‘Hashoo

Group’ has a 27-year old property but they have been investing money every day. The

entire hotel is being equipped with plasma televisions. There are computer systems

available in the rooms and you can do your airline bookings directly from them. This is

their software; they have researched and developed it themselves. Nobody has it

anywhere else in the world. Hashoo Group’s IT department has top class professionals,

dedicated to research. They are putting new furniture in the rooms, and the only thing

they cannot increase is the size of the rooms because they do not have the land.

Otherwise, they would have built another hotel with 400 rooms and with maybe the

quality of the Ritz Carlton. Sadruddin Hashwani believes that it is very important to

invest in quality and in building up the product and its image. The reputation of their

world-class hotels has spread far and brought new business and leisure travelers to their

cities as destination cities. This is a big boost to the domestic hospitality and tourism

industry.

Since diversifying into the oil and gas sector in 1995, through Orient Petroleum, Mr.

Hashwani is eyeing the energy sector in various nations. Pakistan has a net deficiency in

energy resources. There are two major issues in our country's natural resources sector:

one of them is the water situation; the other is oil and gas. Old discoveries such as the Sui

gas field are depleting and each day we are running shorter on proven reserves with

increasing consumption. It will definitely be a challenge to meet the day-to-day

requirements of the country. Pakistan has a deficit in terms of oil. We import over 80%

and are not producing enough to offset our consumption. As a child he had the desire to

be in the oil and gas exploration business because he likes to take risks. He is a very

adventurous man by nature. When He began my career his used to be the handling and

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transport contractor in Balochistan supplying rice, wheat, and sugar on behalf of the

government. That used to allow him to travel by sea, by road, by truck, and by rail.

Oil and gas, it is definitely something where you can make money.

When he bought Occidental Petroleum it had all of the infrastructure, the trained people,

and the entire data room with all the facilities. Accordingly, he paid a premium price for

the company and it has been a good investment. After that he took over a large acreage

from the government and in the last two years we drilled 20 wells. This is something that

nobody had ever done in Pakistan in such a short time span. They made seven discoveries

and they are in the process of bringing them into production. Pipelines do not take the gas

straight from the well, so you have to clean and process the gas before bringing it to the

main pipeline of Sui Southern Gas Company Limited or Sui Northern Gas Pipeline

Company Limited, in order to give them the quality they require. Right now they are

producing 100 million cubic feet per day of gas and hopefully will be producing

approximately 200 million cubic feet by July of this year.

They have also been very fortunate in our joint ventures. They have majority

shareholders of Zaver Petroleum, which is named after his mother. Zaver has a large

discovery in Chanda field near Kohat where we are a 10.5% partner with OGDCL.

Unfortunately it took five years to bring the field to commercial production.

They had seven discoveries with OGDCL in another block, which was theirs, but they

had given it to OGDCL to operate. But so far that have not come into actual production.

They have also applied for another block in Punjab. They recognize the urgent need for

increasing our country's oil and gas production and we are doing our utmost as a

company to achieve that.

Mr. Sadruddin Hashwani was awarded the ‘Outstanding Professional Contribution

Award’ for his distinguished services to the tourism industry of Pakistan. He is a humble

and down-to-earth gentleman. Awards do not satisfy him.

His satisfaction is his own personal satisfaction. He is not looking for any award or

recognition. What he does is what drives him, and above all his satisfaction is not making

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money in business, but rather providing 9,000 jobs today. He wants to provide more jobs

and to contribute to his country's economic growth. His goal is to play a positive role.

Sadruddin Hashwani is a man who has all the qualities of head and heart. He is a

philanthropist as well. The philanthropic Hashoo Foundation, and Umeed-e-Noor, are his

projects which provide special education and healthcare for children. The Hashoo

Foundation has built 18 schools in Pakistan so far. It has a program to build another 40

schools with ten in each province of Pakistan. They are taking in children from working

class families and providing them with free education, books, uniforms, making sure that

once they pick up a child, they can make him a graduate and hence play a positive role in

the building process of Pakistan. The Hashoo Foundation was established to provide

scholarships and to build schools.

The Hashoo Group also has two other foundations: the HOAP Foundation and Umeed-e-

Noor Foundation. Sadruddin Hashwani’s wife is running the Umeed-e-Noor Foundation,

which helps handicapped children. They are looking after 75 children and currently are

trying to get land from the Capital Development Authority to build a permanent home

which would then allow us to have a facility for 300 children to be boarded there. Some

of the children come from rich families but it is hard for them to look after them properly.

It is essential for Pakistan to be able to take care of the people who need help. Umeed-e-

Noor is committed to this cause and he has been financing whatever he can and his wife

organizes fundraising functions a few times a year.

In recognition of his contributions to Pakistan’s business and economic progress, the

Institute of Business Administration, Karachi honoured Mr. Hashwani in 1988 with the

“Outstanding Professional Contribution Award”. For his distinguished services to the

Tourism Industry of Pakistan, he was awarded a Gold Medal at the Tourism Convention

held in 1993.

Mr. Sadruddin Hashwani is a man of integrity whose ideas are worth admiring and his

practices are worth emulating. His success story gives the nation a zillion lessons to learn.

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Resources Allocation:

As part of its tourism policy, Z A Bhutto govt declared hotel as an idustry for securing

bank loans. Sadaruddin Hashwani who was also active in real estate decided to build a

hotel on a piece of land that he owned in busy Sadar area in Karachi. He applied for for a

loan and sought allotment of land in Islamabad for a 5-star hotel. Bhutto who had planned

Asian Games in Islamabad went out of the way to sanction the loan. The White Paper on

Economy released in 1979 by Zia ul Haq accused Bhutto of sanctioning a loan to

Hashwani Hotels despite objections by the Pakistan Banking Council that Hashwani

brothers were already defaulting in an earlier loan from United Bank Ltd, in respect of

another of their trading concern. But Bhutto decided that the UBL should not link up the

default of the other concern of the sponsors with the underwriting of shares of Hashwani

Hotels. A loan of Rs 19.8 million was sanctioned by Investment Corporation of Pakistan.

Few years later, it was Zia ul Haq govt that sanctioned a loan facilitating Sadaruddin

Hashwani to purchase Pakistan Services Ltd. That catapulted him the top of the hotel

industry in Pakistan.

Success Factors:

He was a pioneer of five star standards of hotels in Pakistan decades ago. Very few

people were aware of Five Star Standards at that time. Due to Hashwani’s vision and hard

work, these standards have not only been maintained over the years but are still shinning

bright as always. His hotels have dynamic appeal with unparalleled record, thanks to his

unique management and leadership style. This rare brand of talent, together with

delivered excellence, can very aptly be classified as “Hashwani’s Five Star Gold

Standards of Management and Leadership”.

One example of that is after Prime Minister Zulfikar Bhutto nationalized industries in the

1970s and Mr. Hashwani started investing in those businesses not yet nationalized, like

textile, minerals and real estate. “People thought I was mad [at that time] but I knew what

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I was doing,” he says in his plush office in the twin Emirates Tower in Dubai.

Mr. Hashwani’s success lies in two factors: one, his ability to foresee a good business

opportunity when no one else can--supplying wheat and rice to the small port of Gwadar

in the 1950s decades before a government would see the potential of developing the area-

and his determination to soldier on in the face of adversity.

He credits this simply to faith. “I get my strength from God,” he says.

Recommendations:

Mr. Sadruddin Hashwani had changed intercontinental to pearl continental a local name

given by him to his hotel to save himself from royalty because they were charging a great

deal of money. He could also give local name to Marriot and promote his own name

through the world by establishing his own standards without following others.

In my point of view every successful organization has satisfied and courageous

employees at their back end. So organizations should strive to build satisfaction among

the employees by giving them incentives for better work. The Hashoo group doesn’t

maintain and encourages performance excellence in form of monetary terms. There is a

formal performance appraisal form for all employees, and this is tied to a reward system.

It is my view that there are severe problems with the performance appraisal form in that it

is very subjective in nature. Because of the subjectivity the system can lead to gross

errors, and since this is linked to reward system, the error is not only perpetuated but

exaggerated.

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References:

http://www.pakistanileaders.com.pk/profile/Sadruddin_Hashwani

http://www.urbanpk.com/forums/index.php/topic/252-interview-sadruddin-hashwani-

chairman-of-hashoo-group/

http://www.linkedin.com/pub/salman-saeed/a/4ab/124

http://dc197.4shared.com/doc/ptIWt6kD/preview.htmlxa.yimg.com/kq/groups/23581198/.../Sadruddin+Hashwani.docwww. hashoogroup .com

www.psl.com.pk/dir_chairman.php