THE RICHEST PEOPLE IN AFRICA: MOHAMMED DEWJI NAMED YOUNGEST BILLIONAIRE IN AFRICA

Mohammed Dewji, CEO MeTL Group.

Mo Magic: A Week With Mohammed Dewji, Tanzania’s Wealthiest Man

By Uzodinma Iweala

Mohammed Dewji is the third generation of a family of successful Tanzanian entrepreneurs. Over the past decade, as CEO he has grown his family’s business from a national trading house to a multi-billion-dollar, multinational conglomerate, generating a $2-billion fortune for himself in the process. Dewji believes the future of business is in Africa. After a week visiting his various operations across Tanzania, it is easy to see why. When most people visit Tanzania, their primary destinations are usually a safari in one of its picturesque game parks or the sweet-smelling spice markets on the island of Zanzibar. I spent my time crisscrossing Tanzania on a safari of a different sort – tracking some of the numerous entities that make up Mohammed Enterprises Tanzania Limited (MeTL), the unique and diversified group of companies that has made 39-year-old Mohammed Dewji one of Tanzania’s wealthiest and most important men.

My first stop was the sprawling A-One bottling plant in an industrial zone just off Julius Nyerere Road, one of Dar es Salaam’s main arteries. After a mid-afternoon arrival from Lagos, it was perhaps the best place to try to shake off my cross-continental, red-eye-flight-induced stupor. My guide, Nitin Vishwakarma, a five-year veteran of MeTL and the executive assistant to Mohammed Dewji, made sure I received a bottle of Mo Bomba Energy Drink, the MeTL Group’s recently introduced competitor to the internationally known Red Bull. “Try it,” he insisted and handed me a golden bottle. I’ve never been one for energy drinks, but surrounded by top A-One executives and a number of staff in the quality control and testing lab where we stood, I felt obliged. Much to the delight of the whole lab, I quickly downed a 275ml bottle specially designed for the local market. It went down easily, with a refreshing carbonated kick. I sheepishly asked for another bottle and soon felt my haze lifting away.

A-One Quality Control Testing Lab

Out on the main factory floor, multiple production lines staffed by young Tanzanian men and women in casual clothes, except for their hospital blue hairnets, hummed loudly as they churned out bottle after bottle of A-One soft drinks at high speed. Each of the three lines at the A-One plant can produce and fill 24,000 beverage bottles an hour. The plant runs 22 hours a day, producing up to three million cartons of various flavoured drinks per month and generating almost $50 million in revenue last year. It is a small segment of the MeTL Group’s annual $1.5 billion revenue, but A-One’s amazing productivity is evidence of a strategy Dewji has employed with almost every manufacturing concern he owns in Tanzania: find an underperforming or derelict business, buy it cheaply and invest in new equipment and management that will turn the company into a cash-producing asset. A-One, which MeTL created by merging a number of companies acquired between 1999 and 2000, is just one of many examples. After spending $48 million to turn the plant around and develop eight new soft drink products priced to be affordable for the local low-income population, A-One is now profitable. MeTL competes successfully with Coca-Cola and Pepsi in the local beverage sector and hopes to dramatically increase its local and regional market share over the next few years.

“I will only look at a business that is in trouble or poorly managed, and I see potential in that business,” Dewji told me during one of our numerous conversations. “For example, this guy is struggling. He’s got one product. He’s got limited working capital. He’s borrowing at high cost – they get killed here with high cost of borrowing. He doesn’t have distribution. He has to give credit. So I know that, one, if I take over, my cost of borrowing is going to be half of his; two, this will be another product I will just place through all my outlets and just sell; and three, I have the necessary systems to be able to manage this in a better way.” In other words, Dewji, who studied finance and international business at Georgetown University and briefly flirted with a career on Wall Street after finishing school, has turned his family shop from an import-export trading house into a hybrid manufacturing conglomerate and leveraged buyout firm.

With his love of immaculately tailored Armani, Gucci and Zegna suits, Ferragamo footwear and a self-described “fetish for glasses” (he owns over 100 pairs), Dewji certainly looks more like an international financier than a rough and-ready African industrialist with an almost single-minded focus on providing goods and services to the often ignored consumers at the bottom of the pyramid. From a distance, Dewji’s formal presentation can be imposing – he is almost never seen wearing anything but a suit. Up close and personal, however, he has the effortless informality of a seasoned politician specially tuned to his audience. When we first met at the World Economic Forum in Davos, Switzerland, Dewji, who sometimes goes by the nickname “Mo”, greeted me with “What’s up bro?” and the classic handshake-hug. He is most often described as extremely aware of how lucky he is to have been born into a family with drive, resources and vision. Dewji regularly credits his father with providing the formal and informal education that has led to his success. “My father had been training me since I was 11 years old,” Dewji told me. “He used to teach me how to do business. Every Christmas, every summer, he kicked my ass to come and work for him.” Ali Moledina, the CEO of Neomedic PTY Limited (a pharmaceuticals company based in South Africa) and a childhood friend and college roommate of Dewji, told me, “Mohammed has always been a humble person. I mean his father was wealthy even at that time, and you never sensed that if you met him. You never got a sense that he was better than you.” Indeed, this quality has proved important in many aspects of Dewji’s career, allowing him to connect with a mostly poor, rural population in his family’s hometown in Singida, a constituency he has represented in the Parliament of Tanzania since 2005. It has also underpinned the development of a business strategy that sees the economically disadvantaged not as charity cases but as willing and able consumers for products that match their needs – and pocketbooks.

MeTL Head Office, Dar Es Salaam, Tanzania

The MeTL Group that Dewji now leads as CEO has its origins in catering to those generally overlooked by the market. In its previous incarnation, it was a small trading business set up by Dewji’s paternal grandmother, Fatemah Dewji. The Dewji family originally hailed from the town of Kutch in Gujrat, India. According to family history, Dewji’s ancestors left India and crossed the ocean in the late 1800s, aware that they were headed to the continent of Africa, but unsure of where exactly they would land. Fatima Dewji originally started trading to help the family make ends meet in Singida, the poor, rural area of northwestern Tanzania where they eventually landed. It was Dewji’s father, Gulam Dewji (now Chairman of MeTL), who took the business from a one-woman shop to a nationally known import-export house with approximately $30 million in revenue a year. Gulam also named the company after his younger brother Mohammed, who died as a teenager. At the time, MeTL focused mostly on importing finished products from abroad for resale in Tanzania. They also exported a number of locally produced agricultural commodities and raw materials. Today, MeTL is popularly known as a company that sells almost everything from air conditioners to bubblegum. The only exception is alcohol, which MeTL does not import or produce in keeping with the family’s Islamic faith. The company relies heavily on radio and roadshows to reach its target consumers, many of whom reside in rural areas and lack consistent access to television or the internet.

MeTL’s head office occupies the 22^nd floor of the PPF towers, one of the tallest buildings in Dar es Salaam’s city centre. It is a remarkably compact setup for an organization of 31 distinct companies which collectively employ 24,000 people, or about five percent of Tanzania’s total formal sector workforce. Dewji’s large office, sparely furnished in a modern style, sits in a corner of the building with a view towards numerous embassies, a golf course and beyond that, the serene blue of the Indian Ocean.

When I arrived in the early evening, he was in the middle of his regular meetings with constituents from Singida. Dewji is a creature of routine, arriving at the office around six each morning to start his day by reading and responding to hundreds of emails and reports he receives from the different heads of MeTL’s various operations. He later holds meetings until noon, when he sneaks away for a quick run and workout at the gym followed by lunch at home, where he gets to see his three children. The rest of his day is divided between business and constituency issues, with meetings often stretching until well past 10pm at night.

While I waited for him, I watched a short documentary about his successful 2005 campaign for office that, at age 29, saw him become one of the youngest parliamentarians in Tanzania’s history. When I asked him whether there’s any conflict of interest in working both as a parliamentarian and a businessman, he responded: “I never speak in Parliament about business. I only speak about my constituency and focus on water, education and health”. Dewji sees his political service as another means of giving back to Tanzania rather than as a profession, and he actively pushes for solutions to some of the structural problems that directly affect the rural community where he spent his early years. Two of Dewji’s major concerns have been reducing Tanzania’s high maternal mortality rate – an issue close to home because his mother almost died while giving birth to him – and digging boreholes to increase the availability of clean drinking water. One of the accomplishments of which he is most proud is that his direct efforts have increased the availability of potable water across his district from 23 percent to over 80 percent.

For Dewji, much of the tendency towards service comes from his deep Islamic faith, instilled in him in part by his grandmother, and a general interest in ethical principles from all religions. As a theology minor at Georgetown, Dewji studied “everything”: Islamic thought and practice, Hinduism, Christian ethics, and Jewish mysticism. “Consciously, I’m a religious person. I believe,” he told me when we sat in his office, “I believe life is short and you’ve got to give back. That’s the reason I ran for Parliament in the first place. It was all on humanitarian grounds.”

Dewji has an idealistic streak that provides a framework for his life, but it is also clear that his family’s businesses have been the major focus of his attention, at times to the detriment of other areas. “I’m not so proud of not spending more time with my children,” Dewji said to me. “Actually this thing is kind of eating me, and it’s funny that my father started telling me, Look you’re as good as how good your children are… If you are going to create so much wealth and if you’re not going to prepare your children with the right attitude, the right etiquette, equip them with the right knowledge, then you’re a failure in life.” He credits his wife Saira, who he has known since secondary school, with providing much-needed balance in the family life and reminding him of what is most important. “She keeps telling me that it’s not all about wealth, about money… I think, if she wasn’t there, I probably would have died a working man,” he said.

MeTL Sisal Fields

It is easy to see why there is so much work to be done. MeTL’s core businesses span a geographical region that includes most of Tanzania. Over the next three years, Dewji plans to cement MeTL’s position as an African multinational through opportunistic investments in surrounding countries. “I’m already present in Kenya, in Rwanda, in Burundi, in eastern Congo, in South Sudan, in Malawi, in Mozambique, in Zambia, in Ethiopia, and in Dubai,” Dewji said in his office, excitedly rattling off a list of countries. “But I want to replicate, so we are going to start upon an expansion of $500 million in the next 12 months.” Dewji plans to increase MeTL’s presence in five main areas where he feels the group has a clear advantage: production of edible oils, grain milling, petroleum distribution, trading and textiles. On 15 August, 2014, MeTL and Rand Merchant Bank of South Africa signed a $200 million agreement for medium-term financing dedicated to Dewji’s expansion plans. “Our vision going forward is that by 2017, 2018 we want to be a $5-billion revenue company with an employment of 100,000 people – God willing,” Dewji said.

21st Century Textiles Ltd

Textile production is one of the major pillars of Dewji’s manufacturing empire. With cotton and sisal fields across Tanzania and processing factories in Tanzania, Mozambique and Zambia, Dewji is likely the largest textile manufacturer on the African continent. MeTL’s combined textile concerns produce nearly 120 million metres of cloth each year, generating just over $100 million in revenue.

The first factory I visited, Afritex Limited, is in the port town of Tanga, located approximately 160 kilometres from the border with Kenya. Tanga was the administrative capital during the period of German colonisation, but with the rise of Dar es Salaam as an administrative and commercial centre, the city experienced a profound decline. Recently, the government has invested large sums to revitalise the port facilities and thus provide much needed relief to the congested port of Dar es Salaam to the south and competition for the Kenyan port of Mombasa to the north. Afritex is situated in a growing industrial zone a few kilometres from the port and about five minutes’ drive from the Tanga Airport. Its large warehouse contains a series of machines for removing impurities from ginned cotton and spinning the remaining material into long yarn threads that are eventually woven into large sheets of white fabric.

Workers Weave Sisal Yarn into Fabric

Its larger sister plant, 21st Century Textiles, is 300 kilometres away in the centrally located town of Morogoro. Both facilities are capable of printing and dyeing cloth but only 21st Century Textiles has recently acquired the machinery to make garments such as T-shirts for export to Europe, South Africa and the United States. MeTL’s sisal rope, yarn and fabric facilities, also located in Morogoro, are set up in a similar fashion, though finished sisal products are mainly used in the packaging of raw materials like coffee grounds. The inside of each factory is filled with a multiplicity of deafening sounds and strong smells as thousands of spinning machines and weaving looms click and clack their way towards producing thousands of metres of fabric each day. In certain rooms, there is a sweet smell in the air from the starch applied to the cloth before it is sent to the dyeing facilities.

If one of Dewji’s obsessions is tackling Tanzania’s high youth unemployment rate, then his textile factories provide an interesting solution to the problem. The managers of Afritex and 21st Century Textiles tend to employ unskilled labour that they train on the job over a three to nine-month period, depending on the role. Dewji makes it a point to mention that in certain factories, MeTL uses manual labour where they might otherwise use machines purely because it provides local employment. It is also smart business –the more people employed, the richer the area, the more consumers MeTL has for some of the other fast moving consumer goods (FMCG) like beverages, detergent and edible oils that the company either imports or manufactures. In general, MeTL enjoys good relations with its unionized workers, and seeks to provide incentives for those it employs beyond regular wages, such as free meals and educational scholarships.

MeTL Tea Plantation Nursery

On the opposite side of the country, high in the hills near the town of Songwe and a stone’s throw from the border with Malawi, MeTL engages in a very different kind of production: tea farming and processing. It is a testament to the size and range of MeTL’s operations that Dewji has not yet had the chance to set foot on this vast property, which forms only a fraction of MeTL’s 66,000 hectares of landholdings across Tanzania. The views from the plantation are breathtaking, as is the altitude. Rolling hills planted with short tea shrubs in neat rows line almost every visible surface. About 1,500 people work the 5,000 hectares of the plantation under cultivation – 2,000 hectares are devoted to tea and about 3,000 hectares used to grow the eucalyptus that some of MeTL’s factories use as fuel.

MeTL acquired these plantations in 2003 and invested $28 million in 2007 to replant mismanaged fields, improve the plant nursery and refurbish the rundown tea-processing factory. Executives expect the continued investment to pay off over the next 10 years as they look to export heavy quantities of processed tea in bulk to other countries in Africa and the Middle East for packaging and resale. Along with cashew, wheat and cotton farms, the tea plantation forms part of MeTL’s investment in producing and processing raw agricultural commodities. For Dewji, the range of interests is all part of creating a sustainable company that meets the basic needs of Tanzania’s population. “Tanzania is a poor country. I see the GDP is $30 billion. People have no money to wear Armani suits or nice glasses. I said, what is the utmost important thing that a Tanzanian needs? It’s food. So I said I am only going to focus on the bottom of the pyramid where I can get the volumes that I want and deal with food, period. Then I went into clothing because it is the second most important thing,” he said.

Indeed, one of the largest revenue generators for MeTL is East Coast Oils, an edible oils refinery close to the Dar port and one of the last stops I made on my journey through the world of Mohammed Dewji. Commissioned in 2006, East Coast Oils alone accounts for over 30 percent of the MeTL Group’s annual revenue. Situated at the end of a pipeline that runs directly from the port to massive storage tanks arranged around a central refinery, the plant processes crude palm oil imported from Malaysia and Indonesia into 600 metric tonnes of liquid cooking oil each day. It also produces soap and other household cleaning materials from the solid byproducts. It is massive in scale, and with the recent financing acquired for expansion will grow to produce over 2000 metric tonnes each day. When I visited the CEO Vijay Raghavan, he apologised profusely for the mess inside the compound. Where there were once palm trees, the ground was littered with refuse and machine parts as construction workers hurried to add refining capacity in advance of a January 2015 deadline. Once the expansion is complete, MeTL expects the East Coast Oils plant to generate over one billion dollars in revenue each year – one-fifth of Dewji’s 2018 target.

East Coast Oils Soap Packaging Station

When next I met up with Dewji, it was in the newly built VIP terminal at Nyerere Airport as he waited to board a flight to India to purchase small coal burning plants that will ease the energy costs at a number of MeTL factories. He was considerably more relaxed, still wearing a suit but no tie, and reclined into one of the plush couches in the ornately furnished room. Dewji’s friends and family often describe him as tireless but the breakneck pace sometimes leaves him visibly exhausted. On this particular trip, he was planning to spend only one day in India before returning home. According to Dewji’s younger brother Hassan, who runs the large human resources department for MeTL, one of Dewji’s greatest strengths “is his ability to empower his top management.” Hassan explained over email that Dewji is not at all hands-off but uses a gentle touch. “He focuses on deliverables, but will not look over your shoulder all the time. This approach has been key in creating a sense of ownership – MeTL senior [executives] feel valued and see their job as being important.” Dewji’s firm grip with a light touch has been especially useful for managing relationships in what is still very much a family business – Dewji’s younger siblings also hold executive roles in the company. According to Gulam Dewji, his children have managed to work together because the family has focused on nurturing similar values and mutual respect. “Mohammed has deservedly assumed the control of the company because of his capabilities, his hard work, and his unshakeable love and care for the family,” Gulam told me by email.

Dewji has no plans to let go. He sees no point in taking the family business public, at least not for another 10 years. “I think we are highly highly undervalued. I can go get debt where I’m paying less than 3 percent for short-term money, 4.5 percent interest for medium term. I would rather borrow than pay 12 percent dividends and giving equity to people. I’m first scaling up to a very sizeable business then consolidating. So I think within a 10 year spectrum I will definitely look at taking some of my companies public.” For Dewji, who admires do-it-yourself billionaires Warren Buffet and Aliko Dangote, there is no cashing out, no quick road to massive wealth. “I’ve learned one thing, and I always tell this to the youth: you cannot make money overnight – unless you do illegal things. But generation of wealth is like climbing stairs. It is step-by-step, block-by-block. When I was younger, I used to always try to think that the pace, that my pace was slow and that I needed to make more and more money. But as time went, I kept understanding that there is no magic. Magic is only that you’ve got to work hard, you need to have luck, you need to be ethical, you need to be clear on your vision and then drive that vision. And that is not easy. I work crazy hours. It’s not easy.”

Ventures Africa recently valued Dewji’s personal net worth at $2 billion dollars.

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