The affable 45-year-old with the bushy white moustache is president and chief executive of Ballard Power Systems Inc., the environmentally friendly energy company that's taken the market by storm. He is also the brains behind the $1.2 billion in development deals the company has sewn up in recent months, including a Dec. 15, $600-million agreement with Ford Motor Co.
In 1997, the investment community dubbed Ballard Power and its fuel cell the Next Big Thing. The company's shares (BLD/TSE) have soared from about $28 a year ago to a Dec. 18 record high of $117.25.
In one year, its market capitalization has climbed to more than $2.5 billion from about $500 million. In quiet yearend trading Wednesday, the shares were up $2 to $109.
Not bad for a company without any substantial revenue that doesn't expect to break even until 1999 -- at the earliest.
If Rasul is worried, he doesn't show it. The blueprint for success was drawn up long ago by the executive team and it's just a matter of following the plan, he says. Year after year, the company continues to reach its targets and wow its critics. Rasul is confident Ballard's risks are diminishing and success is inevitable.
"This is not a Bre-X, you know," he said in a recent interview at the company's impressive head office and manufacturing facility in south Burnaby, B.C. "It's not hot air. It's solid commitments by players in the industry who are going to be customers of ours, who are going to buy these units and put them into the marketplace.
"They're putting their money where their mouths are. That should give shareholders a lot of confidence that we are on the right track."
It was a serendipitous path that led Rasul to Ballard. After completing his early schooling in his native Kenya, he studied industrial engineering in Britain. That produced a stint at a Swiss-based telecom company.
By chance, his command of English pulled him out of the backroom one day. The industrial engineer gave a visiting delegation a quick tour of the company. Rasul was hooked.
"I remember thinking, 'People actually get paid to do this?'," he says.
After completing business school at Montreal's McGill University, Europe became his training ground.
He hooked up with the European operations of Black & Decker Corp. and spent two years learning the art of countertrading, bartering goods for profit across communist Eastern Europe.
"We were out there flogging shoes, drill bits, wine, airbeds and everything," he says. "It was my first introduction to entrepreneurialism."
Family ties brought him back to Canada. A chance meeting with a schoolfriend led to an introduction to MDI Mobile Data International Inc., a struggling high-tech communications company based in Richmond, B.C.
Rasul liked the potential and became employee No. 13.
The company was literally broke and, for the first few months, the new vice-president of marketing and sales was paid stock in lieu of salary.
But MDI's technology proved a hit and sales grew exponentially. By 1988, the company was a takeover candidate; eventually it was gobbled up by U.S. communications giant Motorola Inc. for $105 million.
"I realized pretty quickly the decisions would be made in Schaumburg, Ill. [Motorola's head office], and not in Richmond, B.C.," Rasul says.
Then high-tech investment firm Ventures West Management Inc. introduced Rasul to Ballard Research Inc. Led by founders Geoffrey Ballard, Paul Howard and Keith Prater, the eclectic crew of 18 dedicated researchers was developing an alternative energy source out of a North Vancouver garage.
In a case of déjˆ vu, Rasul saw the potential and signed up, again taking stock in lieu of salary from the cash-strapped company.
The executive team began putting the pieces of the Ballard puzzle together.
A long-term strategy was developed and, for the past nine years, Rasul has been carefully plotting the company's course, step by cautious step.
"The world is very unforgiving of false starts of new technology companies," he says.
The fuel cell concept is deceptively simple. Basically, a flat plate made out of carbon, a platinum catalyst and an electrolyte membrane convert hydrogen, methanol or natural gas into electricity without combustion or pollutants. The more fuel cell plates stacked together, the greater the electrical charge.
The potential application is staggering -- literally anything powered by fuel or electricity appears to have potential.
Legislators are adding a sense of urgency. To the surprise of many, negotiators at the recent summit on climate change in Kyoto, Japan, managed to reach a last-minute agreement that will put more pressure on the world's industrialized countries to adopt lower-emission standards for new cars.
At the same time, traditional power utility customers are searching for cheaper, more efficient energy sources.
To prove to the world Ballard was indeed on to something, Rasul's first move was to get the fuel cell into the hands of its potential customers.
The company shipped 20 early fuel cell units to a list of blue-chip giants including auto makers Ford and Daimler-Benz AG, German producer of the Mercedes-Benz automobile.
With hindsight, it was a cunning opening play. Ballard quickly established relationships with potential clients, allowing them to validate its own research.
The second step was deciding which commercial market to target. Rasul feared if Ballard concentrated on a single niche, it would lose out on the fuel cell's full potential.
So the young company took an enormous gamble and opted to go after the cell's biggest possibilities: power stations, buses and, most importantly, automobiles.
The next hurdle was proving to doubters the gee-whiz technology would work in the real world. After getting about $10.7 million in much needed support from federal and provincial governments in 1991, Ballard's first fuel cell powered bus was developed and was soon lumbering around the streets of Vancouver.
The industry took notice, and the first research dollars and development agreements began to trickle in. In June 1993, the company tapped the public market, raising $15 million in an initial public offering of shares and warrants at $8 a piece.
Cutting down the size of the bulky fuel cell system was the next challenge, this time tackled in partnership with Daimler-Benz. In 1994, the auto maker presented the first fuel cell powered passenger van. Two years later, it launched a smaller fuel cell car that had room for six.
Then came "the most important event in the life of the company," says Rasul.
Last April 14, Daimler-Benz capped four years of research with a $508-million commitment to develop pollution-free automobiles using the Ballard fuel cell. The long-term agreement calls for commercial production by 2004.
As part of the agreement, the German company acquired 5.6 million new Ballard shares at $35 each for $198 million.
In October, the U.S. caught on to the Ballard story. The fuel cell was lauded in a lengthy piece in the New York Times, and the company earned an "outperform" rating from New York's Morgan Stanley Dean Witter Discover & Co.
Even U.S. President Bill Clinton did his part, referring to Ballard several times in an environmental speech.
By Halloween, shares had charged up to the $80 level.
"It has become the No. 1 environmental stock," says Jason Zandberg, analyst at Vancouver Pacific International Securities Inc. "Everybody has gotten their mind around the Ballard story all at once."
But Ballard wasn't done yet. In December, it slam-dunked two more multimillion-dollar deals.
On Dec. 15, the company received a $600-million vote of confidence from Ford. The U.S. auto giant will spend $302 million in cash and technology to get a piece of Ballard's pollution free car. Ford will become a significant shareholder too, investing an additional $296 million to acquire 3.7 million Ballard shares at $80.80 each from the company and Daimler-Benz.
Once the deal is completed, Ford will control about 15% of Ballard, while Daimler-Benz will own about 20%.
Three days later, Ballard signed a $105-million agreement with GEC Alsthom NV of the Netherlands. The power and transportation giant will help market and manufacture Ballard's stationary power plants.
It will invest $53 million in cash and technology for a 21.4% stake in Ballard's power plant subsidiary. Ballard and its new partner will jointly put $51 million in a new company to manufacture and distribute the 250-kilowatt power plants in Europe.
After a stunning 1997, what will Rasul do for an encore?
Investors can expect more deals, he says, possibly projects on diverse fuel cell applications like portable units, trains, boats and aerospace.
More agreements may be in the works, but he says the company will "continue to keep its eye on the ball" of its first and foremost goal -- commercialization of the fuel cell.
"The goal is to get the product to market. The deals are all in support of that."
And fortunately, the risks are fewer and the odds weighted more than ever in Ballard's favor, Rasul says. Unlike the early days, the company is now well financed with more than $170 million in the bank and more to come. Blue-chip partnerships limit the risk of Ballard making a serious error before going to market.
Finally, the company is the comfortable leader in the fuel cell race, edging out a long list of rivals including engineering giant Siemens AG, Mitsubishi Heavy Industries Ltd., International Fuel Cells Corp. and Toyota Motor Corp.
But Ballard has to cut fuel cell costs, so much of 1998 and beyond will be spent searching for cheaper materials and developing a faster, higher volume manufacturing process.
At present, a Ballard fuel cell car costs about 10 to 12 times more to manufacture than a Mercedes-Benz automobile.
But Rasul doesn't seem worried. Cost issues were factored into the Ballard blueprint long ago and will be resolved in due time. "The whole world is our oyster," he says.
