Wai Wai noodles will become market leader in India: Binod Chaudhary
The Economist called him ‘Peak Tycoon’; Forbes called him the sole billionaire in Nepal.
Chaudhary Group chairman Binod Chaudhary, known for creating Wai Wai noodles, runs 16 different businesses across 60 countries.
When the Food Safety and Standards Authority of India (FSSAI) banned Nestle India Ltd’s Maggi instant noodles in June 2015, CG Group’s Wai Wai became the second largest noodle brand in India. Chaudhary, with a net worth of $1.14 billion, believes India is the market where his next billion will come from. In an interview, he said he wants to set up a bank in India, focus on hospitality and the consumer staples business. Edited excerpts:
You leveraged the Maggi crisis to take Wai Wai national. How far can you go with one product?
We could have and should have leveraged the Maggi void much better. We have done extremely well in India, but we could have done far better. As a Nepalese corporate, no matter how ambitious you are, you have limitations. You can’t compare CG Group with a company like Nestle, which is a benchmark. We don’t compete with Nestle. Wai Wai is moving at a pace and it will become a market leader over a period of time. We are setting up plants, building capacity and strengthening our distribution. Not just in India, we are also setting up Wai Wai production units in Europe, Kenya, Saudi Arabia and probably Mexico in the next couple of years. Soon, there will be a lot of brand extensions under Wai Wai. We want to make lives of housewives easier every day. Recently, we entered the quick service restaurant business with a noodle bar called Wai Wai City, which is the first of its kind.
Do you plan to bring your businesses to India?
We have 16 businesses and a presence in 60 countries. Our dream is to have presence in every continent. Up until now, India was not the focus. We preferred investing time and money in other South Asian countries rather than fighting with big multinationals here.
In any case, doing business here was never easy. However, India is a very important base now and the vision is clear. We will focus on food and hotels. Hospitality will be the growth driver for us. We already operate some hotels here and, worldwide, we have some of the best hotels.
What about your other businesses like financial services, power, infrastructure and realty?
I want to bring my bank to India. We have a controlling stake in Nepal’s Nabil Bank. I have already written to the authorities including the Reserve Bank of India seeking permission. Even the Nepalese government is learnt to have intimated the Indian government regarding this. I am happy to team up with a local bank or a partner to open my bank here.
We are also in the infrastructure business. We have already started work on developing a food park in Rajasthan that will be seamlessly integrated with farmers and markets. Education is a big thing in Nepal. We are waiting to get permission to start our own university there. We want to enter the education business in India as well.
How important is India for you?
There is always an opportunity and room for doing more. Wai Wai and CG Group are growing too fast in too many directions. It’s a question of allocation of resources and funds in the right direction. We have 3,000 direct employees in India. The way I see it, India may become the global headquarter some day. It will be the largest market over a period of time. India may be the country where my next billion will come from. But before that, it needs to make the Indian rupee fully convertible.
What is your revenue target in India and how much do you plan to invest?
At present, India accounts for about 25% of our global turnover. About 30% comes from Nepal and the rest from all the other countries we do business in. Investments will depend on the businesses we set up here. If we get the approval to set up a bank, that itself will require Rs500 crore of capitalization. We can invest several hundred crore in India, but there’s no fixed number in mind. We are a debt-free company. Investment will never be an issue.
Do you plan to bring your tobacco and beer businesses to India?
Tobacco is a business we want to move out of slowly. Most of it is already being sold to Japan Tobacco. We run our brewery in Nepal, and it will stay like that for some time.
You have stayed away from acquisitions. Will you leverage that route to grow?
Acquisitions usually come with a lot of burden and debt, which I don’t want. However, I am open to the idea now. I would be interested in buying a herbal products brand in India, may be for Rs100-200 crore. But we are yet to spot anything.