By Khairul Khalid
A fortuitous meeting with a Japanese executive proves a turning point for AK Nathan, who uses it as a springboard to grow Eversendai into a global player in steel construction. KINIBIZ interviews the company’s founder for insights into the company’s history and success.
______________________________________________________________________
AK Nathan could have turned out to be a success story in the printing or insurance business, if not for a chance meeting with a Japanese executive in the 1980s. Instead, more than 30 years later, he is the founder and executive chairman of Eversendai, an integrated steel contractor involved in the construction of some of the most iconic high-rise buildings in the world.
“I got into the construction industry by chance and grabbed hold of the opportunity,” said 60-year old Nathan to KINIBIZ.
Some of Eversendai’s prominent construction projects include structural steel works for the Kuala Lumpur Tower, Petronas Twin Tower 2 and Kuala Lumpur International Airport in Malaysia, Singapore’s Republic Plaza, Tornado Tower and New Doha International Airport in Qatar, Burj Al Arab, Dubai Mall and Burj Khalifa in Dubai, Capital Gate Tower in Abu Dhabi, Al Moayyed Tower in Bahrain, Kingdom Centre in Saudi Arabia, Crescent City in Azerbaijan, Empire Tower in Indonesia and Worli Tower in India.
AK Nathan
Explaining the history of Eversendai, Nathan said that despite heading a billion ringgit steel construction company, he is not an engineer by training and did not go to university. Before setting up Eversendai, he started off his career as a printing machine operator and shortly after that sold insurance for a living.
“My chance came in 1983. I met a Japanese gentleman, Tameshi Hamaki, who was a general manager at Nippon Steel. He gave me the opportunity to erect the steel structure for the Proton factory in Shah Alam. That was my big break. Subsequently, Eversendai was born in 1984,” said Nathan.
Nathan has not looked back since. He developed Eversendai from a structural steel erection specialist in Malaysia into one of the world’s leading integrated structural steel turnkey contractors.
“The Proton factory project quickly lead to others. We moved into the Singapore market in 1988. That was my first overseas venture. Then Hong Kong, the Philippines, Thailand and Indonesia. In 1996 we ventured into the Middle East with Dubai as a base. Our first project was the Burj Al Arab hotel,” said Nathan.
The founder of Eversendai cites the Burj Al Arab as one of the main highlights of his career. The sail-shaped luxury hotel is cited as the world’s only seven-star hotel and is one of the tallest hotels at over just 1,000 feet.
“The seven-star hotel was built on a man-made island. The structure was amazing, it was a wonder project. We were given the opportunity to come up with the methodology to construct the complicated structure of the building. I always say that it was a Malaysian who gave the idea on how to build the Burj Al Arab. That was one of my proudest moments,” said Nathan.
“Our portion was the erection methodology and installation worth about RM35 million. It was a small portion of the project. The fabrication, steel material and design were provided by other parties. But today we are a total integrated steel contractor,” said Nathan.
The Burj Al Arab project put Eversendai on the world map and was the launching pad for Eversendai to bid for other massive construction projects worldwide.
“Those were the main turning points in my professional life. First was meeting the Japanese. Then it was getting the opportunity to do the Singapore Indoor Stadium project. Then, the greatest turning point was probably being able to execute the Burj Al Arab hotel in Dubai. This was the project that established Eversendai. I made money in the Middle East region. The Malaysian business was just so-so,” said Nathan.
In 2014, Eversendai posted over RM1 billion in revenue and RM36 million in net profit. It was listed on Bursa Malaysia in 2011. It has already surpassed more than RM1 billion in new projects in the first half of 2015.
Over 90% of its revenue is now from overseas markets. The company’s international track record is a major source of pride for Nathan.
“Until now, we have never set up office in a country to go looking for a job. All our projects, especially in the Middle East, are by invitation and word of mouth. We win through our reputation and track record. Don’t get me wrong, we do bid for jobs. They don’t just drop on our laps. But most of the time they are all negotiated and awarded to us. Clients know that we will deliver without compromise,” said Nathan.
The Eversendai chairman said that the company is promoted primarily by its business associates and partners such as its architects, clients, consultants and project managers.
Despite his company’s global presence, Nathan has not forgotten the roots and foundations of his success. He is especially aware of the lessons learned during his early days in the business.
“Working with the Japanese really opened up my eyes. I learned a lot through the Japanese working culture. I liked their work ethics and incorporated some of them into my own company,” said Nathan.
He said that the Japanese are very disciplined and have a certain working culture and values that are very enviable.
“There are three things that I have made part of my corporate philosophy. First, not to compromise on safety. Second is quality of workmanship. Third, always deliver on time without compromising on commitment. Those are the basic values I have inculcated and made them work for me. Along the way, I learned other important things, such as not giving excuses,” said Nathan.
His affinity with the Japanese way of doing things also led to the name Eversendai. Nathan explained that many clients still mistake Eversendai as a Japanese company, in spite of its local origins.
“I was having dinner with my Japanese friend and asked him which part of Japan he came from. He was from Sendai, a city in north Tokyo. I instantly liked the word ‘Sendai’, so I asked him what it meant. It means ‘thousands of generations’. So jumbled the words ‘ever’ with ‘Sendai’. I liked the sound and meaning. Many people refused to believe it was a local company. I had to tell them that it’s 100% made in Malaysia,” said Nathan.
The Eversendai chairman still remembers some of the challenges he faced in setting up Eversendai and growing the business. A major problem was financing projects.
“In the beginning stages, as the company was growing, funding was the most difficult part. If you are small, it is not easy to get banking facilities. You need money to invest and expand. Banks will ask for collateral for additional funds. It’s a common problem for entrepreneurs.
“We kept at it and saved money. There is a saying ‘a drop of water makes an ocean’. We also built up a good reputation among clients and received early payments. We rolled the cash and kept on building our reserves,” said Nathan.
Nathan said that not having access to loans did not deter him from bidding for or embarking on major projects.
“When we were doing the KL Tower and Petronas Twin Tower 2 projects in 1993-1994, we didn’t have bank loans. We just used banks for basic transactions. When the company grew larger, especially in the Middle East where we undertook total turnkey projects, we needed banking facilities.
“For example, the Kingdom Centre job in Saudi Arabia was worth about RM60 million. The banks did a complete study of Eversendai and our projects in Dubai. They could not believe how we were able to grow this company without any borrowings. They were very surprised. This was in 1998,” said Nathan.
Despite his preference to rely mainly on the company’s own cash flow, the banks eventually managed to persuade Nathan to borrow to finance his burgeoning Middle East portfolio.
“The bank officer said: ‘I’m giving you a passport. This passport will take you to many levels. If you want to be creditworthy, you have to owe the banks’,” Nathan recalled with a smile.
Looking forward, Nathan still has ambitious goals for Eversendai. There are plans for the company to become a player in the oil and gas (O&G) industry.
“We have an orderbook of about RM2 billion. Inclusive of our core business and the O&G unit, we have tendered for RM23 billion worth of jobs. Our target is to achieve RM2 billion turnover by 2017. We are confident of achieving this target,” said Nathan.
Despite its many achievements, the founder of Eversendai feels that the company still has a long way to go.
“Frankly, I think we are still growing. We have not made it or reached our pinnacle yet. The company is still young. Maybe I am getting older but our average staff age is 30. It’s a young company with a great future. We want to take the company to another level. The younger generation will have to do it,” said Nathan.
You must be logged in to post a comment.