Guts To Turn Gloom To Gold
Bhav Dhillon CEO of Cemix was featured on the full page of NZ Herald.
Owner passed tests of recession by focusing on people, says Sally Webster
THE summer holidays of 2008 were not easy for Bhav Dhillon. His purchase of construction materials company Cemix went unconditional just two days before the Lehman Brothers collapsed and the global recession began.
But his path to owning a New Zealand-based cement company seemed to be pre-ordained. After graduating with an MBA , he started work immediately with Finnish automation giant Raute Precision.
‘‘One day there was a message on the company answer machine. We were all well travelled but we stood round a fair while trying to decipher the Kiwi accent. Eventually we figured out that Cemix were interested in automating. A month later I was here prospecting and within about 18 months we had a sale.
‘‘The first dry-mix concrete bag rolled off the new machine in 2005 and I’d taken the role of project manager. Things were a bit quiet in Asia so it all worked very harmoniously. My wife was happy living in One Tree Hill and we’d had our first child. A year later came the offer of general manager and I gladly took it.’’
By 2007 Cemix had begun to attain a considerable market share because of the extra business generated from automating, and the owners decided to sell. Dhillon spoke to his wife about buying it himself.
‘‘Why would you want to change what we have now?’’ she implored.
‘‘We have everything we need.’’ Indeed, the life they’d worked hard to achieve was too comfortable to give up initially. But as efforts to sell the business unravelled every time, Dhillon couldn’t resist and he bought it himself. But suddenly he was struggling. The glide from international salesman to project manager to general manager was challenged when his role changed to that of owner.
‘‘In my whole working life I’d never felt so much trepidation,’’ said Dhillon. ‘‘We went away on a family holiday at Christmas and before I walked out the door I opened a letter from our best customer at the time, Stevensons. They were closing down.’’
Yet two years later at the launch of Cemix’s Envirocrete, Dhillon was chatting happily about the product — a dry-mix concrete that makes use of crushed, recycled concrete instead of the usual 50 per cent contingent of precious aggregate.
Envirocrete is a green product aimed at the DIY-er. It can be mixed in a Cemix plastic bag in your own backyard.
Ministry statistics suggest that concrete makes up 17 per cent of the nation’s annual refuse. About 163,000 tonnes of broken concrete are deposited in New Zealand landfills each year. Someone pays to dump it and now Cemix is buying some back again.
Guests who attended the launch included Environment Minister Nick Smith and the MP for Maungakiekie, Peseta Sam Lotu-liga.
Smith thought Envirocrete was ‘‘a good, practical measure consistent with a clean, green image typical of the quiet revolution going on at a domestic level in the last few years’’.
Lotu-liga was complimentary, too: ‘‘What Bhav Dhillon has done with Cemix is foster a passion for the product, invest in innovation and invest in people. It’s a recipe for success.’’
The people-oriented approach took Cemix out of deep recessional waters into premium contracts supplying major hardware retail chains.
It later knocked the incumbent supplier off its long-time perch at Bunnings with the same line-up of dry-mix products for the retail market.
‘‘The transition was seamless,’’ said Bunnings director Rod Caust.
Bhav tends to credit his people for the success of his directorship. They are to refer to themselves as ‘‘team members’’, not ‘‘employees’’, he says.
‘‘Each year without fail I read Good to Great by Jim Collins,’’ says Dhillon of his influences. The author writes that the best business leaders don’t begin by setting new strategies. ‘‘They first got the right people on the bus, the wrong people off the bus and the right people in the right seats — then they figured out where to drive it.’’ Dhillon used the wisdom from the book to deal with the problems he faced at the beginning of the recession.
‘‘Even on a sunny day everyone could see the black clouds of redundancy. So I decided to work on the morale of my team. Rather than focusing on strategies of margin I looked at market share. I said, ‘This is the time when the market is slowing down. Let’s get a good share of it so when it comes up again we have customers.’ Unless you have a customer you can’t make money.’’
Dhillon puts much of the company’s progress down to the adversity of the recession. He said he increased focus on research and development, and out of that came Envirocrete. ‘‘I wasn’t re-inventing the wheel ... Simple things work.’’