Country FilesEast & HornAfrica's youngest billionaire banks on regional integration to boost expansion

Thu,26Apr2018

Posted on Thursday, 27 October 2016 11:22

Africa's youngest billionaire banks on regional integration to boost expansion

By Mark Anderson and Dotto Kahindi in Dar es Salaam

Tanzanian billionaire Mohammed Dewji. Photo: MeTL GroupTanzanian billionaire Mohammed Dewji, who is head of Mohammed Enterprises Tanzania Limited (MeTL) Group, is spreading his trading, commodities and manufacturing businesses around East and Southern Africa, positioning them to benefit from regional integration.

 

Dewji is looking to nearby countries for growth. Dewji’s business empire, made up of interests in textile manufacturing, logistics and agribusiness, brought in revenue of $1.5bn in 2014 according to company statistics. At 41, Dewji has an estimated net worth of $1.1bn, making him the youngest billionaire on the continent. Across its operations in 12 countries on the continent, MeTL employs more than 24,000 people.

Dewji has his sights set on more than tripling his company’s revenue. “[Seven years from now] our revenue target is $5bn per year. We project that we will be employing 100,000 people,” Dewji tells The Africa Report. To do that, MeTL’s targets are in East and Southern Africa. MeTL executives have identified Burundi, the Democratic Republic of Congo (DRC), Malawi, Mozambique, Rwanda, Uganda and Zambia as countries ripe for investment. The company says investment in these countries will strategically position it to capture opportunities in three regional blocs.

Dewji’s conglomerate has planned projects around the region: warehouse facilities in Kenya, Malawi, Mozambique, Uganda and Zambia; commodities trading firms in Malawi, Mozambique, Tanzania, Uganda and Zambia; and companies to sell petroleum products in Burundi, the DRC, Malawi, Rwanda and Zambia. “If someone has thought about where to deploy capital right now, this strikes me as a well thought-out plan,” says Nairobi-based analyst Aly-Khan Satchu.

But questions linger over MeTL’s capacity to carry out this ambitious expansion. “Africa is notoriously asymmetric, so MeTL will need to deploy quite a lot of management capital into these countries in order to get these kinds of things off the ground,” says Satchu.

In Kenya, the largest economy in the region, MeTL is currently growing and selling tea. It is now set to diversify into warehouse facilities and cotton production. “We are now going for cotton, where we are looking to invest $200m as part of our expansion plan,” Dewji says.

Power for textiles

MeTL has expressed its wish to ­establish new facilities for textile­ production,as well as a ­detergent-manufacturing plant and a carton-­manufacturing plant in Ethiopia. But Dewji has struggled there. He says he bid for ­government-owned textile mills that were being privatised, but “the government did not want to sell them to me, for whatever reason. They know best.”

Textiles remain a key target area. “If you look at Tanzania, Ethiopia, Zambia and Mozambique, there is a plenty of cotton,” Dewji says. “But you need to have competitive power. Power is too expensive. We are also looking at how to invest in power for textile [production].” He is optimistic about two countries in particular: “I’m very confident that Tanzania and Mozambique will fix their power because of the gas availability.”

Dewji says he also wants to capitalise on his company’s distribution networks. “We have over 100 outlets [in Tanzania]. We have 2,000 vehicles that do the distribution, which gives us the reach that nobody [else] has attained in the distribution industry,” he says.

Expensive transport is also holding back trade in the region, says Dewji: “If you are moving goods via trucks […] it makes no sense because it is costlier [than rail].” Long delays at Dar es Salaam’s port also prove problematic for business: “If Tanzania fixes efficiency at the port, our gross domestic product will grow by 0.5%.”

Dewji argues that Tanzania’s recently elected president, John Magufuli, who campaigned vigorously on an anti-corruption platform last year, will be good for the business community. “I think if we stick to what he is telling this country to do, we will fly. The man has great vision, he is pushing for revenues to increase. He is cutting expenditure. All in all he is having more money to be able to deliver to the poor in terms of social services, education, healthcare, water and agriculture.”

Some businesses in Tanzania are concerned that the new mandate of the Tanzania Revenue Authority (TRA) to carry out audits and investigate corrupt practices will damage the business environment. The TRA has been looking over the tax payments made by MeTL and other big firms. Dewji says he is not worried. “[The TRA] has been open that they are partners with entrepreneurs and they want to work side by side with them. I think that attitude is a good attitude.”

In June, Dewji announced that he would give away at least half of his wealth to philanthropic causes, saying that he wants “to truly support the betterment of our society so that future generations grow up to live even better lives and strive for even more than they think is possible today.”



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