UK: My best deal - Swraj Paul, chairman of Caparo Group. (1 of 2)

UK: My best deal - Swraj Paul, chairman of Caparo Group. (1 of 2) - Swraj Paul is a cheerful and successful businessman with sentimental reasons for his choice. By Chris Blackhurst.

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Last Updated: 31 Aug 2010

Swraj Paul is a cheerful and successful businessman with sentimental reasons for his choice. By Chris Blackhurst.

Every time he visits his Natural Gas Tubes plant in South Wales, Swraj Paul always stands alone for a few minutes, in silence, before a sapling in the factory grounds. It may seem strange: a steel mill owner paying homage to a thin, young tree on a gusty hillside above Tredegar. Sadly, there is nothing odd about it whatsoever.

The tree was planted in honour of Paul's daughter, Ambika, who died of leukaemia in 1968. It was a shattering experience. Even today the roly-poly, cheerful Indian multi-millionaire (his Caparo Group owns three quarters of the quoted Caparo Industries conglomerate worth £60 million) has difficulty in discussing it.

If any good can come out of his daughter's death, it is the Tredegar plant - the decision to build it is what he unhesitatingly chooses as his best deal.

Born in 1931, into a Punjabi steel mill-owning family, Paul was educated at the Massachusetts Institute of Technology and Harvard Business School. He returned to India and a career in the family firm. In 1966 tragedy struck: Ambika developed cancer. Leaving his three brothers to look after the business, Paul brought her to this country for treatment. When she died he was a broken man. Recovery was slow.

Finally, after two years of "sanyas" - an Indian word for soul searching in the wilderness - he decided to stay here and form his own business. He stuck to what he knew best and went into the steel industry. Armed with a loan of £5,000, he leased a small factory in Huntingdon. "I didn't come here to work - I'd stopped working altogether - but I began to get itchy feet," he says. "I started from fresh with no money."

With three employees, he manufactured steel pipe - the sort that holds up road signs and street lights. Within 12 months the company, which he called Natural Gas Tubes, was making profits of £60,000 a year. "In Britain, in those days," he says, "customers were looking for someone who could provide a good service, who could meet delivery times. The steel industry was just not geared to somebody doing that."

Buoyed by that success, he decided to open a much bigger factory. "Most people in the industry said I was crazy. British Steel, for example, had a lot of steel pipe capacity lying idle - but I knew that if I could start from scratch with a highly committed workforce, it could be very cost effective."

Grants from the Government and the European Coal and Steel Community were available if he set up in the Welsh valleys. He moved on to a new industrial estate at Tredegar. The factory took two years to build and cost £5 million. Paul put up £600,000 of his own money. "Without the grants it wouldn't have opened," he says.

When Prince Charles did open it, in 1977, Paul acquired a lasting tribute to his daughter. The factory is modern, purpose built, with state-of-the-art machinery and a motivated workforce. "Unemployment in the area is high. The local people wanted it to be a success." The reaction of his competitors at British Steel was less positive. "When I met them they said 'Sell the machinery, close the plant, it won't make a penny'," he laughs. "It's made money every year."

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