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Buhari: Making big money from coal
Moneycontrol.com | October 07, 2006
He was determined as a 23-year-old not to go into the family business. So he did just that.
Ahmed AR Buhari is the founder, president and CEO of his very own businesses -- Coal and Oil Group of Companies.
He was born in Hong Kong and lived in the United States for a few years. His businesses are in India, but he lives in Dubai. Even when in India on business, he's got his feet in different places -- Chennai and Mumbai -- so there is no one place he calls home.
He's also got the education to back him up on his journey to making India an energy powerhouse. He's got a marketing and finance degree from Bentley College, Boston, USA, and a Masters in Shipping, Trading and Finance from City University Business School in London.
He was canny enough to latch on to two sectors -- oil and coal -- that would thrive in a country that would be needing more of it, as the economy grew.
He told CNBC-TV18, "I always felt India had great potential and fuelling the country's energy needs seemed exciting. In the mid-90s, the power market was looking good and so I said we have to focus on India. I thought coal is king because at that time, we did assess other fuels coming into India -- naphtha was a big fuel coming in for power plants at that time."
"But somehow, I was doing the numbers and it never made sense. Importing liquid fuels for power plants into India didn't make sense. So, we figured it was better to get into coal, which is the classic fuel and the cheapest source which would become competitive in the long run."
He began working with his father in 1993. Around that time, imported coal was coming into India, which attracted 85 per cent duties. But ironically, this coal was cheaper even after customs duty was paid, than Indian coal.
So this imported coal business gave him the opportunity that he needed to get started. That year, he also flew to Jakarta and asked a college friend to help him source coal in Indonesia and was there for two weeks before his worried father flew down from Singapore (where he was on a business trip) to check on him, because he thought his son was not there on business!
Now, of course, the son has proved his father wrong as he's made such a success of himself. Buhari's company now sources over 100 varieties of coal, also owns its own shipping logistics company to take care of port handling and delivery.
What's more his company is also in the process of acquiring its own coal mines.
He says, "One thing I've figured out is that people are motivated by ambition and achievement than they are by money. As you go along, you start making money and then you realise that it's not just the money which is driving you but larger social interests also engage your interest."
He's made his money and wants to contribute to society but he's ambitious for his company as well and wants to hit the billion dollars target in the short term. He's looking at setting up power plants in the coastal states of Maharashtra, Tamil Nadu and Gujarat.
These plans are already in the works and begin with land acquisitions and he's in talks with equipment suppliers and contractors. So, whichever state gives him the green signal first and he's able to get land, that's where he will begin business first. He also plans to own ships, coal mines, which will help him expand the business even further and get into logistics.
But even in this age of alternative fuels and greener fuels, his bets are still on coal and he doesn't see coal disappearing anywhere for at least the next 30 years. Also, he says that a lot of money is going back to making coal more efficient -- coal's efficiency is increasing by 30%-35% all the time. At the same time now, coal is also becoming a cleaner fuel because clean coal technologies are being developed.
So, coal is no longer going to remain the scoundrel among fuels, but could just become the cost-effective and efficient fuel that Ahmed Buhari always foresaw.