Anchors Aweigh, Once More

Amritsar-born Harindarpal ‘Harry’ Banga’s second act, as founder of the Hong Kong-headquartered Caravel Group, has the makings of surpassing his three-decade-long success as a shipping and commodities tycoon

- SAMAR SRIVASTAVA

A few minutes into my interview with Harindarpal Banga, I get to the question that’s been on my mind since I started reading up on him. How did the Chandigarh boy who turned first-generation entrepreneur master the market cycle?

Harry, 69, as he is known to friends, had spent his career in shipping and commodity trading. In the 1980s, he and his partner, Noble group chairman Richard Elman, went on to create from scratch the largest commodity trading firm in Asia. From seven people in a tiny room in Hong Kong, the firm went on to pioneer commodity trading in China. By early 2010, its market cap had risen to $11 billion.

Along the way, the Amritsar-born Banga and Elman had seen China transform itself into the world’s second-largest economy. As it went from producing 150 million tonnes of steel a year to 600 million in the 2000s, the ensuing commodity supercycle was one the world had never seen nor is likely to see again. Banga was in the thick of things travelling across China, staying in rest houses without heat or running water, forming relationships with steel mills that would last a lifetime.

In those heady days, the iron ore shipment that Noble had sent from Goa to China for $12 a tonne in the 1990s was being sold at $200 a tonne. The market was somewhere close to the top. “When you start seeing this for things that are essentially picked from the ground and shipped out, you start thinking isn’t this [price] enough?” asks Banga. Global miners Rio Tinto, BHP and Vale had chosen to expand capacity furiously in a peaking market.