“I CAUTIONED MY WOULD-BE WIFE TO THINK carefully before she agreed to marry me,” recalls Robert Chandran, President and CEO of the $3.8 billion Chemoil Corporation, gazing out at Pier 3 from his Embarcadero Center office in San Francisco, CA. “‘Indians, my dear, don’t think of divorce as a way out,’ I warned her,” he says. “If there is something I value more than the business, it is the partnerships we build in life.” Chandran should know.

At quite a young age, the Mumbai-born Chandran came down to Coimbatore in Tamil Nadu, when his uncles put up a paper distribution office to be run by his father. “They knew he was trustworthy and their gamble paid off.” After a master’s degree in Chemistry, Chandran went off to the Asian Insitute of Management in Manila, the Philippines, for an MBA, and continued working for an engineering company there. “I met my wife there and we have been in this partnership now for 28 years,” he laughs. Chandran grew to be the general manager of the engineering trading company, but decided the Philippines was a small market.

Soon after, Chandran, wife and child landed in the U.S., with all of about $1,500 in familial wealth. “That was soon gone. The hospitals took care of it when we had our second child,” recalls the CEO. The company in Philippines was loathe to let go of Chandran and agreed to set him up an office in San Mateo. “I joined my previous owner in 1976,” he recalls, “and I had to organize a loan to pay an overdue bill of $10,000 in the first week.” From there, Chandran built up the engineering trading company to a fairly large business, doing about $40 million. Parallely, Chandran began investing in real estate, and by 1981, owned about 740 apartments in the San Mateo area. “I invested in areas where I could drive and see the building within an hour,” says Chandran. “While I was a good buyer, my wife—the most organized person in the world—managed the apartments.”

In 1981, one of the brothers of the partner at the trading company partnered Chandran in his real estate endeavour. “Till he recently retired from ChemOil, he hasn’t ever interfered in what I did. The absolute trust is a phenomenol driver in business,” says Chandran fondly of his partner. The Filipino brothers fell apart, and the partner at the trading firm pushed down Chandran’s role within the company. Chandran quit.

Within 25 days, he launched his own company. Chandran bought an Epson printer, an Apple, and a bunch of software including the DB2. “That was my introduction to technology,” he smiles. Chandran, his Filipino partner and another Indian formed Chemoil with $120,000 and drew a credit line for $1 million from the Bank of America. “We had a freight contractor working for us in the previous company, where the contractor put a bunker clause, after the 1979 oil crises. I retorted that we wanted a contract for supplying him. The freighter agreed, and we were asked to fetch him 1000 tons of fuel and a 100 tons of diesel in Los Angeles within 30 days. The freighter asked us to get him a price in a week’s time!”

One of Chandran’s friend introduced him to a colleague in another bunkering company. Noticing the unhappiness in the colleague, Chandran lost no time in hiring him. Chemoil struck its first deal. “In the beginning, we planned to do business in chemicals and oil, but till today we haven’t sold one ounce of any chemical. It has been oil all the way,” laughs the 54-year olf CEO, a job he describes as akin to driving a Ferrari at a high speed (unlike other businesses that, he says, are like “an old lady driving a car on the freeway”).

The oil industry is a high volume, low margin business and, because of the volatility of the oil, a high risk one too. “You know whether you a genius or an idiot in hours,” says Chandran, as the market jumps and falls. When you run a business like that, one important thing is management. When you see a billion dollars coming into the account, says he, and see some 900-odd million flow out with equal briskness, you get to wondering if there isn’t any way more of the money could be captured. And the only way you can do this today is to get onto the technology cart. This is an important lesson that he (and as he likes to point out, Sam Walton) learnt. “Traditional accounting is not for the business manager. There is no knowledge in it.” Swiftly enough, Chandran set up California Software, an IT company that built up his relational database systems. “And I have the unfair advantage of doing this out of India, and can beat the biggest of the oil companies at their game—at a lot less price,” he chortles.

Despite set backs of oilspills and large-scale law suits from business in Los Angeles, Chandran has pushed Chemoil from strength to strength. “My partner could have blamed me for the catastrophies that hit us in the Los Angeles port, or the subsequent restructuring we had to do, but no. Not a single word did he utter,” says he. “When you are doing well, it is easy to think about ejecting the other person from the partnership and gather in all the profits yourself, but partnerships help in ways you never knew even existed.”
Chandran teaches and lectures at b-schools across continents, and Chemoil has made it to the Forbes 400 privately held companies. “Managing risks is an exciting part of the business,” he says. Finding niches in the business has helped this ace to the billion-dollar business bracket. His company supplies in excess of 5 million tons annually on all three coastlines—the U.S., North Western Europe and Singapore. Their success in the bunkering industry has led to ownership of oil terminals and expansion to other areas of the oil industry beyond bunkers. Today, the Chemoil Group is a significant participant in the worldwide fuel oil market with an annual turnover in excess of $ 3.8 billion, and

Chandran is contemplating an office out of Sri Lanka.”We have partnerships with companies all over the world. Never do we even contemplate buying any of them out. We work in partnership.”