Mohamed Dewji: « Tanzania’s largest employer with 28,000 employees »

Mohamed Dewji: "I feel I have missed two great opportunities in my career as an entrepreneur."

A month before his abduction in Dar es Salaam, Thursday, October 11 by hooded unknown, the youngest African billionaire had told Financial Afrik (See FA from September 15 to October 14) on its course and prospects.

Interview by Szymon Jagiello, Financial Afrik’s European Affairs Correspondent.

Could you tell us briefly how your company has developed since you joined it in 1999 to become this company which now weighs $ 1.5 billion?

Mohammed Dewji: It was at the insistence of my father, who ran a business specializing in the import / export of raw materials and whose income was around $ 29 million, that I came back to Tanzania to dedicate myself to the development of the family society. While climbing in the hierarchy of it, I contributed in particular that the company widens its range of distributed products, to more than a hundred today.

In summary, therefore, we have developed our trading house into a factory that reaches the turnover mentioned in your question and that owns more than 31 industries active in the textile, agribusiness, etc. However, what makes me particularly proud is that over time we have become the largest private employer in the country with 28,000 workers on a continent where access to work remains one of the most important themes.

What motivated your desire to turn to manufacturing instead of continuing to focus on the import / export of raw materials?

MD: One of the main reasons that motivated me to move the family business to other activities was the ever-smaller margins that we would be making in the years to come because of the increased presence of more big players, like Cargill, who make bigger profit margins on the backs of smaller players. Why did you decide to start manufacturing? For the simple reason that East African states decided in the late 1990s to introduce, for example, taxes on semi-finished and finished goods at 10% and 25% respectively. Measures that motivated me to start manufacturing products.

Did you know directly what goods were you going to make?

MD: That was the million dollar question at the time! However, we started from a simple observation. Per capita income in the late 1990s averaged $ 50 per month in Tanzania. Most of the expenditure was on food. So, we quickly turned to the production of products such as salt or sugar with the aim of offering very good qualities at competitive prices. With the time that average income per capita has risen to $ 85 today, we have diversified our production to produce goods such as detergents. In short, we have been able to adapt to the changing demands of the consumer by constantly offering good quality products at low cost and we are currently in direct competition with major companies such as Pepsi, Coca-Cola and even Proctor and Gamble. Moreover, we have even managed to overcome these brands in some products, such as soaps.

How?

M.D: The international companies mentioned rely heavily on elements, such as marketing, which makes their transaction costs higher. On the other hand, we bet on volume and smaller transaction costs, which de facto gives us the opportunity to sell our products cheaper.

You just talked about marketing. It seems that the brand « MO » has played a preponderant role in the success of your business.Why?

M.D .: When we looked at our marketing strategy, we made more than 250 different products involving 250 different brands. Rather than spend millions of dollars promoting a given product each time, we decided to opt for a consolidation strategy by extending a word associated with the product. Quite quickly, we found consensus around two elements. First, it should not be too long because the longer the word, the more complicated is to pronounce it for Africans. Secondly, it did not necessarily have to refer to or have any meaning in connection with our consumer products.

For example, if you take Nike, the name does not mean shoe. After a long reflection, we came up with the idea of ​​developing the brand « MO », which was the nickname given to me when I was studying in the United States. Overnight, our products have become « MO-Cola », « MO-Dent, » and so on. This allowed us to save money to invest in the development of society and to involve consumers, not with a product, but with our group.

So it seems the marketing strategy adopted as well as the opportunity to offer good quality products at low cost are among the elements that have greatly contributed to the success of your business. Are there others?

M.D .: Certainly the logistics factor and our distribution network are important components. Our fleet of 2,000 vehicles, for example, gives us access to local markets and remote rural points where few competitors are present.

The life of an entrepreneur is composed of successes, but also failures. What have been your biggest setbacks so far?

M.D .: I would not say that I have experienced notable failures because, thank God, my company has developed well when I look at the evolution of the latter. On the other hand, I feel I have missed two great opportunities in my career as an entrepreneur. The first is related to the telecom industry. If I had invested in telecom licenses, I am convinced that I could have become a « Vodacom » in Tanzania or even a « Safaricom » in Kenya.

What factor influenced your decision not to invest in this sector?

M.D .: I did not think that the purchasing power of people would evolve in such a way that would enable them to allocate so much of their income so quickly to the purchase of a mobile phone, to make calls, etc. Given the number of laptops on the continent, we can say that I missed a great opportunity.

You mentioned a second missed opportunity. What is it ?

M.D .: It’s about financial services. A sector today in full transformation and booming, especially when it comes to banks. In addition, the acquisition of a financial institution would have been a profitable synergy for my company.

When you analyze your experiences and your journey, what are the factors that contribute to success in business and what advice can you give to young people wanting to enter the path of entrepreneurship?

M.D .: The road to success is certainly not an easy task. If you allow me a metaphor, becoming a successful entrepreneur is not a process where you take an elevator or escalator in which you easily climb to success. It is rather a long staircase where you have to put your foot on each step to steer step by step. It requires a lot of vigilance, constant effort, a great deal of ethics and a lot of discipline. Above all, and against competitors, credibility is the determining factor. In summary, therefore, if a young person who wants to get into business concentrates on these points and keeps in mind that success does not come quickly because it is a long journey, few things are likely to happen. ‘Stop.

Take the case of a young person who uses your recipe and knows success. How to make your business sustainable?

M.D .: The development of a society is not done alone. It is also evolving thanks to the people who work there. It is therefore important to create an environment in which employees develop a sense of belonging to the company. They must be able to identify with the company for which they work. This employee buy-in is one of the key elements in the evolution of the entrepreneur’s society as they will have an easier time adopting the culture, values ​​and codes of their company. In such a context, they will find meaning in their professional actions, which will have the effect of increasing their performance which can only be beneficial for the sustainability of a society. However, creating such a climate remains one of the most difficult goals to achieve.

In recent years, it seems that the philanthropic aspect takes a more and more marked place in your activities. Do you follow in the footsteps of Bill Gates, who retired from business with Microsoft to devote himself entirely to charity?

MD: I think that when a businessman reaches a certain threshold of wealth, he is an ethical principle that he must adopt, which can be summed up in these words: « instead of constantly seeking to raise his standard of living there is a moment when he must strive to increase his level of generosity. « Like it or not, we will all be brought to God one day and we will be held accountable for the impact that we left last us. So yes, it is very likely that in a few years, I will withdraw entirely from business to focus on helping my peers.

Speaking of your philanthropic activities before the beginning of the interview, you mentioned that it is more difficult to manage a foundation than a company. Why?

M.D .: That’s right. In business, the rule seems simple because it consists of making money. Regardless of the strategy or actions that are adopted, the principle remains the same: to have a return on investment, be it short, medium or even long term. In philanthropy, on the other hand, subjects appear infinitely more complex. Every area where humanitarian problems remain, whether in education or lack of access to health care, requires different needs and different methods of intervention. As a result, it seems very complicated to ensure an optimization of the investment. In this context, it is necessary to devote a lot of time to study cleverly so that each given dollar results in a desired impact, not for oneself but for the collective good.

 

 

Some figures on the MeTL Group

– Active in 12 African countries, particularly in the eastern and southern regions of the continent.
– From $ 30 million in 1999, the group has seen its turnover climb during the last 20 years. It is estimated at 1.5 billion dollars currently, which represents more than 3,5% of Tanzanian Gross Domestic Product (GDP).
– He is considered the second largest Tanzanian employer after the state. More than 28,000 people work for this company today.
– This conglomerate is present in various sectors such as agriculture, oil, light manufacturing, real estate and even insurance, to name but a few.

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