From zero capital to two groups of companies
From zero capital to two groups of companies
The tale of a man’s faith, willpower and struggle for excellence based only on trust
“I have always believed that money is not the main factor if you want to start a business. Dedication, trust, commitment and sincerity are the most important things. I started my journey with empty pockets. And now, I’m the chairman of two major groups of companies.”
This is what Engineer Kutubuddin Ahmed, who is currently the chairman of the Envoy Legacy and Sheltech Group, had to say to the country’s aspiring entrepreneurs while talking to The Business Post during an interview at his office in Dhaka.
An entrepreneur at the beginning, Kutubuddin is now an iconic businessperson in Bangladesh who has helped many others become successful businesspersons over several decades.
Although he is 66 years old now, the old age has failed to stop his drive and his journey. He still regularly comes to the office, attends meetings and takes major decisions.
Along with running and supervising two groups of companies, the prominent business leader still plans to set up new companies and chase success.
Not only he is expanding the business, but Kutubuddin is also supporting many people to become successful entrepreneurs. “There are many who have the knowledge but don’t have the money. Likewise, many have the money but failed to succeed due to a lack of a better idea.
“I want to create a bond between these two groups of people and create new businesses and more jobs,” said Kutubuddin, a Commercially Important Person in the country.
Early life
Kutubuddin Ahmed was born on January 21, 1956, in Dhaka to government officer Md Saadat Ali and housewife Ambia Khatun. He was the third among six siblings.
He studied at the Government Laboratory School and Dhaka College before getting admitted to Bangladesh University of Engineering and Technology (BUET), where he studied mechanical engineering and graduated in 1979.
The same year, he joined the Janata Bank and started his professional career. During this time, he also worked at the credit division of the International Development Association (IDA), a World Bank wing that helps the world’s poorest countries.
“I never took advantage of any illegal facility when I worked at Janata Bank. That helped me achieve a good reputation among the banking and industries communities,” Kutubuddin said.
“But I was not interested in doing a 9-to-5 job since my childhood. I have been looking for opportunities to become an entrepreneur. After a few years on the job, I finally decided and quit to start a new journey with my own business,” he said.
The plan
When Kutubuddin studied at BUET, he shared his dormitory room with his childhood friend Toufiq M Seraj, who passed away on June 21, 2019. Both had the same dream — becoming entrepreneurs.
“Our goal was to earn at least Tk 10,000 per month. At that time, the entry-level monthly salary in Bangladesh Civil Service was Tk 1,050.
“After graduating, Toufiq joined BUET before going to the UK for higher studies while I planned to make my dream a reality. In 1984, I resigned from Janata Bank with almost empty pockets,” Kutubuddin told The Business Post.
When he left the job, he did not have any capital to invest. But the 28-year-old youth did not let that fact determine his future as a businessman.
“After I resigned, I shared my plan to set up a readymade garment factory with my family members and they willingly supported me. Then the next problem emerged — how do I gather the working capital and necessary investment?
“But I believed in myself and didn’t give up. I somehow knew that I’ll able to manage it,” he said.
Starting with zero capital
“I have always been confident that money is not a major issue for me to start something new. For example, if I announce now that I need thousands of crores of taka to start a new business, many will approach me to invest right away without question.
“This has become possible because I have earned people’s trust over the decades. For me, faith and trust are the most important capital,” Kutubuddin said with pride.
“However, back in 1984, it was quite difficult to arrange such investment for a young man like me who had no business experience,” he added.
Kutubuddin was a member of the Mohammedan Sporting Club at the time. He used to visit the club regularly after work. There, he struck a good relationship with footballer Badal Roy, who passed away in November 2020, and several other team members. Badal had shown interest in going into business with him.
Kutubuddin first received Tk 4.21 lakh from a well-wisher and former banker Abdul Malek as an investment. However, this was still not enough to start an apparel business.
“I didn’t know enough about the garment business. I thought if I could manage Tk 10 lakh, it would be enough to set up a small readymade garment factory,” he said.
One day, he went to meet Badal at the Mohammedan club to talk to him about investing. Badal was not there but Kutubuddin met renowned footballer Abdus Salam Murshedy, now an MP and a former president of BGMEA. He said Badal would return after two days and asked why Kutubuddin was looking for him.
“After I told him I was looking for investors, he told me without pause, ‘Kutub Bhai, I will invest in your company. Let me be a partner. I trust you. How much do you need?’
“I was left awestruck. But I needed investment. So, I didn’t wait and accepted Salam’s proposal and he invested Tk 5 lakh,” Kutubuddin said.
Becoming an entrepreneur
In mid-July 1984, Kutubuddin rented a building at Malibagh Chowdhurypara to set up his apparel factory. He spent a significant amount of money to repair and rebuild the building as its structure was not good enough to run a factory.
He took the managing director post and his company Envoy Garment started its journey with 44 sewing machines. “You know how I came up with the name? I opened an English dictionary and found Envoy on the first try on the page where it opened,” he said with a smile.
Soon after, Kutubuddin needed more money to run the business as he had to spend most of his capital to set up the factory. He came under new pressure when he went to open Letters of Credit and take loans and learned that he needed to put up something as collateral. But he or his partners did not have any assets.
At that time, his family came through for him. His father had bought a piece of land in Dhaka, of which, his mother and five sisters were also inheritors. Kutubuddin talked to all of them and they gave him permission to take out a mortgage on the land.
“Through that, I was finally able to solve the liquidity crisis. In August 1984, my factory went into production based on subcontracts. I hired skilled workers and paid them almost double that of other companies. Their productivity was higher than the workers of other companies,” he said.
Two months later, however, his capital was nearly finished. His partners suggested closing the factory to save his family’s property. It was one of the toughest times of his life but he never once thought of giving up.
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“It was probably in mid-October 1984 when an Indian man named Akbar Laxmani came to my office and introduced himself as a buyer. He visited the factory and then offered to place orders. At one point, he showed me a sample and asked about the manufacturing cost,” Kutubuddin said.
“Since I didn’t have a clear idea in that area, I asked him to calculate the cost. He offered me $6.5 per dozen and I accepted his proposal. The Swedish brand he was representing then placed an order for 5,600 pieces of clothes,” he said.
He continued: “After I exported the products and received the payment, I withdraw some money from the bank and went to Hotel InterContinental Dhaka to pay Akbar his commission. He was very surprised.
“He told his wife, ‘Look at this boy. He’s paying me even before I said anything. This is a first for me. He will go far because of his work ethic and commitment.’ The incident cemented my future.”
After that, Akbar provided 5,000 more orders over the next two months. When manufacturing of those was finished, Akbar again came to Kutubuddin’s factory and offered to place another big volume of orders. Since Envoy Garment was not capable to handle it at the time, he did not want to take on the order but Akbar kept trying to persuade him.
“One day, Malek Bhai and I went to Akabar’s office to discuss the issue. He said this order could change my business completely and that he would help me finish the shipment on time,” Kutubuddin said.
After much deliberation, he decided to take the orders and distributed them among 14 factories. Akbar continued to arrange the orders and Kutubuddin finished the work on a subcontract basis.
Within 15 months, he repaid the Tk 20 lakh bank loan. And within two years, Kutubuddin had Tk 1 crore in his bank account and bought three more garment factories, he said.
“My honesty, hard work, sincerity and faith helped me reach that milestone that fast. Over the years, these qualities have helped me become the owner of two groups of companies with a $350 million turnover,” he said with pride.
Diversification
The iconic entrepreneur continued, “It was probably in 1988 when my friend Toufiq came to Bangladesh and joined BUET again. I was already a good businessman with several factories and expanding.
“Toufiq regularly spent free time at my office and eventually showed interest in partnering up with me. But I felt like the apparel business was not for him. I suggested that he should start a real-estate business because he was a very good civil engineer.”
He said, “During that time, Tapan Chowdhury, who is the current CEO of Square Group, came to my office one day. He also showed interest in joining us when we shared our new plan with him.”
That year, Kutubuddin and his two apparel business partners, Toufiq and Square Group jointly established the real-estate company Sheltech. Their first project was developing the family land of Kutubuddin.
Sheltech soon started expanding rapidly thanks to these people’s dedication and quality of work. But when the Ershad government fell in 1990, the country’s real-estate sector also collapsed and that forced Square, Salam and Malek to leave the business.
However, Square again invested in Sheltech after the industry bounced back a few years later.
Growth and achievements
It’s been nearly four decades since Kutubuddin started with one garment factory. Over time, he has opened multiple factories and thriving businesses under Envoy Group.
Now his dreams have become reality through his now-rechristened group Envoy Legacy, which has several apparel manufacturing factories, a textile mill, a denim mill, a washing plant, and dyeing and print factories.
His Envoy Textiles is the first LEED-certified Platinum denim manufacturing facility in the world and the largest denim producer in Bangladesh at present.
Also, Sheltech Group is now respected as a pioneer in the country’s real estate market. Over the years since its inception 33 years ago, Sheltech has expanded into other sectors and flourished just like Envoy Legacy.
The group has companies in ceramic tiles manufacturing, SPC pole manufacturing, abrasive paper manufacturing, stock brokerage, GSA for a couple of international airlines, national and international trading, consultancy and town planning, hotel chain and the meat processing industry.
“When I started, I had only 60 workers and employees, and now, nearly 20,000 people work in my two groups. Our annual turnover is more than $350 million,” said Kutubuddin, a former BGMEA president (2001-03).
“When I invested in the ceramic sector, I decided to choose Bhola and set up the factory there. Many said this won’t work. But our ceramic factory is performing well without any major promotional campaign,” he said.
“The country used to meet its rising sand paper demand only through imports. I’m the only one who invested in this industry here and my factory is now capable to meet the national demand.
“Our Bengal Meat is the country’s first meat processing company. I have plans to invest in the agriculture sector as well,” added Kutubuddin, who has also served as president of the Metropolitan Chambers of Commerce Industries.
Apart from winning the National Export Trophy several times, he also received “The Business Person of the Year 2016” from The Daily Star and DHL for his contribution to the country’s business development.
In 2020, he was awarded the “Knight Officer of Spanish Royal Order of Merit” by the King of Spain for his significant contributions to developing the bilateral relations between Bangladesh and Spain.
A recipient of the National Sports Award 2002, Kutubuddin has served as the secretary general of the Bangladesh Olympic Association as well.
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