Building a Billion Dollars from Scrap: Anil Kumar Agarwal’s Story
Thinking about the Indian state of Bihar, the one thing that immediately rings a bell in one’s mind is poverty and also the sense of an under-developed state. Nevertheless, it is home to some of the most coveted entrepreneurs in India including Anil Kumar Agarwal – founder chairman of Vedanta Resources which is valued at $2 billion.
Here is what Mr. Agarwal had gone through to build an empire from just scrap and to find a place in the Forbe’s list of Billionaires in India.
Anil Kumar Agarwal was born in 1954 to a lower middle class family in Patna, the capital city of Bihar. His father was running a small business of making iron grills, gates and aluminum conductors where Anil was helping his dad. After completing his high school education, Anil wanted to start his own business and move on to Mumbai and started his career as a scrap dealer in 1976 where his business was all about collecting scrap cables, removing metal wires from them and selling them.
In 1979, he came to know that a cable manufacturing company was for sale and wanted to acquire the company. He didn’t have enough money to offer a good deal but at the same time he knew that such opportunities don’t strike often. So, he approached many banks before getting approved for a loan and went on to buy the company. However, he soon realized that buying a company that was in losses and driving it towards was not an easy task.
He tried his luck on and off for over a decade from 1976 to 1986 and experimented with different businesses without achieving much financially. That was when Anil realized that inexperience, scarcity of resources and the ups and downs of financial market have a huge impact on any business – whether small or big. That was the time he learned a lot more about unions, involvement of banks, machinery and other resources that help in running a successful business.
He says that he wouldn’t have come so far in life if he had limited his business to just collecting and selling cables and metals. He wanted to dig deep into the scrap metal business he was familiar with and wanted to be part of raw material supply for copper and aluminum and started a plant that separated the valuable metals from raw material. In fact, started in 1988 and names ‘Sterlite’ – it was the first-of-its-kind plant in India at that time. The same year he teamed up an American company to make ‘jelly filled cables’ that were used in telecommunications. Later on, he purchased MALCO (Madras Aluminum Company) in 1995 paving his way to enter the list of top Indian entrepreneurs.
As London was becoming a center for world famous mining companies, he moved his office to London in 1998 and also bought some copper mines in Australia in 1999. He then named his business group as ‘Vedanta’. In the year 2001, CEO of BHP Brian Gilbertson left his company following disputes with the board members. Anil immediately contacted Gilbertson to join his company. After looking at the assets of the Vedanta, Gilbertson immediately joined as the chairman to the company paving way to other prominent persons to join ‘Vedanta’.
Today, Vedanta Resources Corporation is the largest non-ferrous metals and mining company in India. It is also an LSE-listed diversified FTSE 100 metals and mining company. The company has assets and runs its operations from Zambia and Australia.