A man who can hold up his pitta with pride

Paul Rowinski on a philosophical entrepreneur who fought ill-health and fire to bring us speciality breads

PRIDE VALLEY, the company Hossain Rezaei set up in 1990, is essentially an extended family. The central tenets are trust, faith and loyalty.

So it was rather like telling close relatives of a tragic loss when Mr Rezaei stood on a soapbox to placate distraught employees a few years ago after the factories were completely destroyed by fire. Mr Rezaei and his wife, Susan, had created a multi-million pound operation, the pride of the North-east. Then it all disappeared in front of them.

To understand how Mr Rezaei turned it around it is necessary to fathom the man himself. Mr Rezaei is the closest you can get to the Iranian version of John Harvey-Jones. He tackles every problem head on, calm and calculating in business, but open and charismatic by nature.

As an engineering student at Newcastle Polytechnic, he realised that there was a gap in the market for quality pitta breads - then only a fraction of the overall bread market.

While completing his BSc at the polytechnic, and MSc and then a PhD at Durham University, Mr Rezaei ran the North-east's first kebab shops. There, he noticed that while many pittas had some good qualities, they all lacked authenticity.

He recalls: "I decided at the time that I was neither rich enough or experienced enough to get into that game. But I knew that there was some potential."

Just before his finals, he developed a cyst on the base of his spine and had to take his exams in agony. Nevertheless, he passed. Had he failed, he would have returned to Iran.

After his studies, he formed Pride Valley, and the search for an authentic pitta bread began. Mr Rezaei went to Israel and Egypt, back to pitta's roots, to discover the genuine product, then made customised machines to reproduce it.

"It was where being an engineer came in," he says. "Rather than the chamois-leather pitta bread that was on the shelf, breaking into pieces, I decided to design something that allowed me to me create an authentic product."

And when the firm branched out into naans, Mr Rezaei spent hours in the back of Indian restaurants engaged in more culinary research.

His idea of mass-producing authentic speciality breads developed. Within a few years of moving to the purpose-built factories in Seaham, County Durham, in 1993, business was booming. A pounds 500,000 turnover had risen to nearly pounds 10m in 16 months, and staff levels increased from about 25 to 200.

Mr Rezaei was on target to semi-retire in 2000 at 45 and the company was aiming for a turnover of more than pounds 30m. In December 1995, in the space of a few hours, it looked as if the fire had destroyed all that.

"It was like going from here to the moon and the moon was not there," Mr Rezaei recalls. "It was just so soul-destroying. That is the time that you are tested. You have got to stay level-headed. It says in the Koran that everybody is tested, every being, every soul, to see that they perform."

He told his employees they had only lost the tools of their trade but that their acquired expertise remained. He was right.

At Pride Valley, employees have a share option scheme, a pension plan and profit-related pay, coupled with mortgage payments. As Mr Rezaei explains, again quoting the Koran: "If you help someone in the most unexpected place in desperate need, stuck out on the ocean, you will receive help when you least expect it, in the desert. Against all the odds it was that kind of help I got in the middle of the desert after the fire."

Staff set up alternative offices and were the first to inform clients what had happened - before the opposition did.

Within days Mr Rezaei and his backers had come up with a refinancing package. From a nearby empty factory Mr Rezaei staged his renaissance. Reconstruction began immediately, and within four months Pride Valley was back in business.

Mr Rezaei found "family" members in the most unlikely places; one young man from a deprived Newcastle estate whom Mr Rezaei took on, feeling he had what it took, has now become a pivotal player in the company.

Sir Ian Wrigglesworth, the former president of the Liberal Democrat Party, was his landlord at the first factory in Gateshead. Today they are good friends.

Pride Valley is now a market leader, producing around 2 million pieces of bread daily. Tortillas are the latest additions to Mr Rezaei's repertoire of more than 40 varieties.

He claims that he has probably Europe's most sophisticated, hi-tech, hygienic food factory. It is certainly fire-proof.

By 2001 turnover is expected to reach pounds 35m to pounds 40m. By autumn next year Mr Rezaei hopes to have doubled factory space and production.

He wants to take speciality bread into the mainstream and is planning a range of new products.

As for his retirement plans, he is back on target to semi-retire at 45. But it seems more likely that Mr Rezaei will want to stay in the fast lane. It is his natural home, after all.