South Africa’s entry for the 2006 Ernst & Young World Entrepreneur of the Year award is a rags-to-riches immigrant whose tight-fisted approach to costs is legend. He is also among the six most likely winners from almost three dozen country representatives.
Although Bidvest’s Brian Joffe came close in 2004, in the six years since the competition went global, no South African has won it. The initiative now embraces 35 countries from a modest start 20 years ago in Milwaukee, Wisconsin.
South Africa’s Bill Lynch (62), who transformed the Imperial Group into one of the country’s Big Three industrial firms alongside Bidvest and Barloworld, might represent his nation’s best chance yet. His chief competitors come from the US, Taiwan, Indonesia, Hungary and India.
Lynch whose formal education ended when he left an Irish village school, emigrated to South Africa 35 years ago with a young wife, no job and just £2 000. He joined and was soon leading Imperial Motors, then a small loss-making car dealer.
At its current share price, Imperial Holdings is worth R32bn making Lynch (who bought 10% in 1973) one of the country’s richest people – and among its greatest creators of shareholder wealth. R10 000 invested when Imperial’s shares listed on the JSE in 1987 is now worth an astonishing R2,3m.
Imperial today employs 36 000 people, generates profit of R2,2bn a year and boasts annual revenues of R42bn. Through the innovative Ukhamba Trust, it also conceived one of the most successful initiatives for broad-based Black Economic Empowerment.
On paper, the biggest obstacles to a South African victory in this competition will come from American retailing genius Arthur Blank or Taiwan’s laptop computer king Barry Lam.
Together with co-founder Bernie Marcus, Blank (64) turned a vision of warehouses packed floor-to-ceiling with low priced building materials into 2 000-store retailer The Home Depot. The group has a market capitalisation of R500bn (15 times that of Imperial) and annual earnings of almost R40bn.
But a few things ensure Blank is no shoo-in. First, he retired from The Home Depot in 2001. Next, many would consider the 13-year-older co-founder Marcus as having been the retailing duo’s senior partner. And then, although Blank has done well with his new business – rejuvenated American football team Atlanta Falcons – it hasn’t been anything like The Home Depot success story.
The judges might also be wary of creating a precedent by recognising something a contender departed from five years before. Doing so could open the way for a string of posthumous nominations.
To cap it all, despite some very strong candidates, only one US citizen has won the global award (last year’s victor Wayne Huizenga). This is because the judging criteria considers the size and potential opportunities in the entrepreneur’s home market, a fact which clearly counts against Americans.
But even without those hindrances, Blank (and Lynch) face a potentially more dangerous challenger in Taiwan’s Barry Lam (55). He is the founder and CEO of Quanta Computer Inc, the world’s largest manufacturer of laptop computers. Lam’s firm, which he started in 1988, designs and manufactures 14m laptops a year, roughly one of every three produced worldwide.
Lam, dubbed by the media as the “King of Laptops”, is the man behind most of the Dell, IBM, Apple and HP branded portable computers in circulation today. Like last year’s winner Huizenga ($2,1bn) Lam appears on the latest Forbes magazine list as one of the world’s 500 richest people (worth $1,6bn – identical, incidentally, to Liberty Life founder Donald Gordon).
The Taiwanese’s company passed Toshiba as the world’s biggest laptop maker back in 2002, a year in which it set a seemingly tough target of $10bn sales for 2005. Last year Quanta surpassed that goal by some $3bn.
Although the winner is likely to come from one of Lynch, Blank or Lam, given the way Ernst & Young’s judging criteria can reward the less obvious, it would be no great surprise to see it won by one of Jakob Oetama (Indonesia), Sandor Demjan (Hungary) or the ever present Indian challenge represented this year by the wealthiest of the contenders, Kumar Birla.
Oetama (75), who started life as a school teacher and part-time journalist, turned a single literary magazine into a vast media empire. A respected journalist, Oetama used his understanding of the industry to build the 11 000 employee strong Kompas Gramedia group. Its interests stretch beyond newspapers and magazines to electronic media, book retailing, hotels and even paper mills. He must be the sentimental favourite, especially among the journalists here.
Hungarian Demjan (62) is in the mould of celebrated entrepreneurial countrymen George Soros (financial services) and Peter Munk (mining and property). Except that he stayed at home. Like Lynch, Demjan rose from a childhood of poverty, his route being through property development. His TruGranit Development Corporation built much of the city centres of Eastern European cities Budapest, Bratislava, Prague and Katowice.
India’s Kumar Birla (38) is not only the youngest of the six frontrunners, but with personal wealth estimated by Forbes at $4,4bn, comfortably the richest as well. The business he runs – Aditya Birla Group – has turnovers and profit roughly equivalent to Lynch’s Imperial. But what might count against the Indian is his age and that he was inherited the company rather than started or built it.