Mohammed Dewji – A Family Business Role Model

Mohammed Dewji – A Family Business Role Model

Why it Matters He is transforming his Fathers' modest trading Family-owned business into MeTL Group, a conglomerate aiming to be a cornerstone of

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Why it Matters

He is transforming his Fathers’ modest trading Family-owned business into MeTL Group, a conglomerate aiming to be a cornerstone of African economy. 

MeTL Group is a family-owned business, and is Tanzanias’ largest home-grown company, with an impressive presence in Tanzania and 11 countries in sub-Saharan Africa and Dubai.

When you visit Tanzania

Upon arrival into Tanzania, you are never far from a brand owned or controlled by  the Group. You are likely to brush your teeth with Fluordent toothpaste, take a bath with Mo soap, wash clothes with Poa or Taifa detergent, sip tea grown on its plantations, sweetened by KK sugar, or you might quench your thirst with Maisha water. Your breakfast of pancakes or chapatti might be made with Safi Wheat Flour and Safi Cooking Oil, and you may wear a khanga during one of your outings.

Mo Dewji - oumamugavoice family business consultants

Mohammed Dewji (Photo Courtesy)

“We want to be the people’s brand, catering to the daily needs of consumers, while building one of the most successful businesses in this part of the world.” states Mohammed Dewji.

It’s an ambitious dream, but for Mohammed Gulamabbas Dewji, it is typical. A man of extraordinary ambition, he’s demonstrated this single attribute with stunning effect  – transforming a small, family-owned regional trading house into a multi-billion dollar, multinational conglomerate and creating one of Africa’s largest family fortunes.

Background: The heritage of MeTL Group as an economic powerhouse runs deep. Mohammed Dewji [42] popularly known as “Mo,” is third generation in a family of Tanzanian entrepreneurs.

An ardent football enthusiast, and supporter [and one time sole sponsor] of Simba Sports Club (SSC) of Dar es Salam, “Mo” is the Chief Executive and Leading shareholder, of MeTL Group, a family-owned Tanzanian conglomerate with operations in manufacturing, agriculture, haulage, storage distribution, trading, and real estate.

MeTL Group is one of the largest industrial conglomerates in East Africa, with annual revenues of $1.5 billion and a workforce in excess of 20,000 people. MeTL Group contributes around 3.5% of Tanzania’s GDP.

His Grandmother: owned a small trading shop in the 70s which operated out of her home in Singida, a sleepy town in Tanzania’s central region. From her modest residence, which was made from mud and sand, she peddled everything from sugar and rice to matchboxes and spices.

“She was not particularly rich,” added Mo, “but she was very entrepreneurial and had a very strong work ethic,” he says.

“She would be the first to wake up very early in the morning, clean the house, prepare food for the family and then open for business till the late evening.”

His Father: Gulam Dewji, Mos’ father, took over the business, from his grandmother, and adopted a more aggressive approach. He begun importing soft commodities into Tanzania using family savings and credit facilities. And by mid-1970s, he had turned the shop into a thriving import-export business.

Dewji often credits his father with providing the business training pivotal to his success.

Fathers Influence: “My father had been training me for business since I was 11 years old.  He taught me how to do business. I remember that even as a kid, whenever there was a school holiday, he would compel me to follow him to work. He would tell me ‘Mohammed, this is family business. You need to learn the ropes’.”

Mohammed “Mo” Dewji, 42, is hailed as Africa’s youngest billionaire, worth $1.3 billion. He offers his entrepreneurial advice and positive views on life to almost half a million Twitter followers

Mohammed “Mo” Dewji – 42 (Photo Courtesy)

Playing a different game

Dewji attended the International School of Tanganyika in Dar-es-Salaam. At school, where along with his siblings he played tennis, football, and golf. Golf was his favourite. The young Dewji spent several hours every week on the city’s course. He enjoyed the sport, not only because he was great at it, but because he came to realise many of Tanzania’s most successful businessmen and his father’s friends concluded many deals on the fairway.

Professional Golf….?; Keen to develop his son’s golfing prowess, Gulam Dewji sent a teenage Mohammed to the Arnold Palmer Golf Academy in Orlando, Florida. Dewji ended up attending Saddlebrook High School, also in Florida. A few years later, Dewji decided to abandon his dream of playing professionally, going on to study International Business and Finance at Georgetown University.

Upron graduating, Mohammed was hired by a financial services firm on Wall Street where he worked 100-hour weeks and earned a little over $60,000 a year. While for many it seems like a lot of money, it was hardly enough when paying rent in Manhattan and 30% in personal income tax. Within a few months of working, Dewji realised he needed a hand.

“When I called my father asking for financial support to sustain myself in the States, he politely turned me down,” Dewji recollects with a smile.

“He said I was chasing pennies in New York and helping the Americans build their economy, whereas there was a family business to run, and fortunes to be made in Tanzania.”

“He said I was chasing pennies in New York and helping the Americans build their economy, whereas there was a family business to run, and fortunes to be made in Tanzania.”

Reluctantly, Mo, who was only 23 at the time, packed his bags and headed back to Tanzania.

“I always knew I was going to go back home. I always wanted to go back, but I had such a strong community of friends in New York and I was sad to leave them.”

In 1998, Dewji returned to Dar es Salaam to join his father’s business, taking up the position of chief financial controller for the group. MeTL was already one of the biggest trading companies in Tanzania by the turn of the century. The company imported everything from sugar and wheat to cotton and soaps, and exported Tanzanian cashews, cowpeas, maize, and everything in between.

MeTL was a prosperous export-import and trading house. But the barriers to entry in the import business were quite low, and soon the space became saturated. Competition stiffened and the margins on the soft commodities that had become MeTL’s mainstay were thinning.

“Don’t get me wrong, trading is a great business and, in fact, we are still very big on trading today,” says Dewji.

“But it is too passive. We were importing edible oils and soaps, which I couldn’t understand. Why import soap? Why couldn’t we manufacture the soap ourselves?”

So Dewji drew up a business plan for an edible oils manufacturing facility and approached his father, suggesting they start manufacturing certain items. His father, while impressed with his son’s initiative, asked him to hold off on his industrial ambitions. It was too capital-intensive and the older Dewji wanted Mo to channel his energy on a business they already understood well—trading.

Dewji suspended that dream for a while, keeping in line with his father’s wishes. But he knew the future for MeTL was manufacturing. He waited for the right time and opportunity to take the plunge.

Business Friendly Government Policies

The major break came in 2003, when the Tanzanian government decided to put some loss making state-owned corporations up for sale.

“Essentially, these companies had been run down by bankruptcy because of government inefficiencies and the government was eager to sell them at giveaway prices. He took a loan and bought a lot of these sick industries, including soap production, grain milling, rice, and sugar blending. I also went into the edible oil business and the textile industry.”

Dar es salaam city Mohammed Dewji oumamuga hall of fame for captains of family businesses

Dar es Salaam, from the city centre to Msasani Peninsula. The fast-growing city’s population of 4.1 million is expected to leap to 6.2 million in the next decade. (Photo Courtesy)

The growth Curve 

East Coast Oils and Fats; His first line of action was expanding the capacity of the edible oil refineries he acquired. Dewji expanded MeTL’s edible oil refining capacity from 60 to 600 tons almost immediately. That under-performing edible oil refinery he acquired back in 2005 is now East Coast Oils and Fats, the dominant manufacturer of oils, soaps and fats in the country. The company controls a 60% market share, and accounts for more than 30% of METL’s annual revenue.

Some of the world’s largest agricultural companies have approached Dewji to acquire his business. Dewji says he’s not selling anytime soon.  “There is so much opportunity for growth and I’ll be shortchanging myself if I sell now,” he says.

Textiles : Dewji is also big on textiles. Tanzania’s former socialist government had invested hundreds of millions of dollars in building textile mills. But again, the government could not manage these industries properly. Dewji bought them out, cheaply.

“The machinery was all run-down and the technology obsolete. But Tanzania is the third-largest cotton producer in Africa. There was a massive opportunity, so we spent millions of dollars in rehabilitating the mills by investing in top European and American machinery.”

MeTL Group is now the largest textile producer in sub-Saharan Africa with four textile mills

and an annual production of more than 100 million running metres of fabric. MeTL also operates its own cotton ginnery and also owns cotton plantations.

The group competes favourably with China in textile production. According to Dewji, textile production is cheaper in Tanzania than in China because labour is significantly cheaper in Tanzania and, where China has to import cotton, Tanzania produces its own in huge quantities. In a bid to help protect the industry, the previous Tanzanian government slapped import tariffs and a standard VAT of 18% to protect domestic manufacturers like MeTL.

“China can’t compete with me,” he boasts.

“Every year, we produce more than a hundred million metres of cloth. For perspective, that is more than 2,500 times the circumference of the earth.”

A-One Products & Bottlers : Apart from textiles and edible oils, another major success story for the group is its beverage company, A-One Products & Bottlers. Dewji created A-One in the early 2000s by acquiring a number of government-owned bottling companies. He spent $48 million over time to turn the plant around. A-One’s bottling plant can now produce and fill as many as 24,000 beverage bottles per hour. The plant runs 22 hours a day and contributes more than $60 million to MeTL’s annual revenue. The subsidiary produces its own cola and orange drinks to compete with the Coca Colas of this world, and he produces a highly popular energy drink Bomba, considered a Red Bull competitor.

Dewji’s business strategy : is hinged to a quasi-leveraged buyout model. He loves to hunt for rundown, loss-making businesses that have been badly managed. He then buys them for good value, restructures the company, and brings in fresh management, who in turn make it profitable.

“I see a company that is on the brink of insolvency, and the owner is struggling to stay afloat because he has got one product, very limited capital, and expensive debt. He does not have distribution and he has to give credit to customers because he’s small.

“I do not necessarily have those problems. I get access to better interest rates from international financiers so my cost of borrowing is low; and then this will be another product I will just place through all my outlets and just sell.

Work-life-family-charity balance

Family Business; Even though Dewji calls the shots and is the controlling shareholder, MeTL is still a family business. His father, Gulam Dewji, serves as the group’s chairman, while his immediate younger brother, Hussein Dewji, is the director of sales for the group. His younger sister, Fatema Dewji Jaffer, is the director of marketing for the group, while another brother, Hassan Dewji, is the director of human resources.

The Mo Dewji Foundation aims to “enrich the lives and alleviate Tanzania’s citizens from poverty and hardship” through grants and project implementation. The registered charity funds the Mo Entrepreneurs Competition and Mo Scholars Programme oumamugavoice

Mohamed Dewji Philanthropy arm – Mo Dewji Foundation (Photo Courtesy)

Family Meetings; “I enjoy working with my family,” the chief executive says.  “Everyone is actively involved and we respect each other’s contribution to the business.

My father, siblings and I try to meet at least twice a month in the office to review any important issues we might have. We’ve made it a point to be as honest and open to each other. We try to never discuss business at home. Even when we meet together for lunches and dinners at our family home, we stay away from business. It is very important to have that work-life balance at all times.”

MeTL is now in its third generation. Dewji’s children are all very young, and his nephews and nieces are still toddlers. He says he does not plan to coerce any of them to join the family business eventually.

Giving Back to Society 

Dewji is not all about business though.

In 2005, he was elected to parliament. During Dewji’s 10 years as a member of parliament, Singida went from having two secondary schools to 22, while access to clean water increased from 23 to 84 percent of municipal residents. Since he couldn’t effectively toggle between the family business and politics, he left politics to focus on the family business and philanthropy.

The Mo Dewji Foundation aims to “enrich the lives and alleviate Tanzania’s citizens from poverty and hardship” through various poverty alleviation project implementation. oumamugavoice family business consultants Kenya

Mo Dewji Foundation – Water Projects (Photo Courtesy)

He regularly speaks at international conferences where he advocates for Africa—Tanzania in particular — as an investment destination of choice. He’s a Young Global Leader at the World Economic Forum, and is on the advisory board for East Africa for the Rhodes Scholarship.

Mo has an impressive social media profile with 487,000 Twitter followers and more than 500,000 Instagram followers. He often provides business advice to those who track his feeds, many of whom are young, aspiring entrepreneurs.

Philanthropy is a big ticket at MeTL.  Having accumulated a fortune estimated at more than $1.4 billion [in February 2018], according to Forbes.  Dewji has been seeking out ways to give back.

Mo Dewji Foundation - oumamugavoice

Mo Dewji Foundation

In 2015, he launched the Mo Dewji Foundation a registered charity that provides grants for a host of social empowerment projects and academic scholarships in Tanzania’s impoverished localities. Dewji gave the foundation $2 million during its launch. Dewji says his pet project, a pediatric oncology center, has seen survival rates jump from 12 percent to 60 percent.

The group’s registered non-governmental organisation, Singida Yetu. has seen the Group over the last five years, spend more than $3 million on education, water supply, income generation, healthcare investments, and sports programmes.

Bill Gates and Warren Buffett pledge; In July 2017, Mo became the first Tanzanian to join the high profile Bill Gates and Warren Buffett Giving Pledge launched in 2010. The Giving Pledge is an effort to help address society’s most pressing problems by inviting the world’s wealthiest individuals and families to commit more than half of their wealth to philanthropy or charitable causes either during their lifetime or in their will.

He credits his parents and grandmother with instilling a deep sense of responsibility, particularly as a Muslim, to care for less fortunate members of society.

In business, he achieves this through impact investing. “When devising our expansion plans, I continuously stressed the importance of a business strategy that sees the economically disadvantaged not as charity cases but as willing and able consumers of products that match their needs,” he wrote in his Giving Pledge letter.

Besides, in a recent interview, he said, “I always tell my friends, : ‘When God blesses you financially, don’t raise your standard of living. Raise your standard of giving’.”

When God Blesses you, do not raise your standard of living. Raise your standard of giving.

“It is the right thing to do,” he says.

The Future

What does the future hold for the family business that’s grown from $26 million to $1.5 billion?

Dewji’s ambitions for MeTL are no less lofty—it aims to become a $5 billion entity employing 100,000 staff. Tanzania’s titans are raising east Africa onto the world stage.

Fast mover advantage

http://www.oumamuga.com/wp-content/uploads/2018/08/Tanzania-map-.jpg

Tanzania is a large country, measuring roughly a million square kilometres and more than 85% of the population live in rural areas. Most large fast-moving consumer goods manufacturers encounter difficulty in moving goods across to the most remote areas. MeTL does not have that problem.

Over the years, Dewji has built one of the best distribution networks and warehousing facilities in the country. MeTL has more than 100 trade outlets across the country and through its transport and logistics subsidiary, Glenrich Transportation, operates a fleet of more than 1,000 different vehicle types which move across every corner of the country providing fast delivery of goods and efficient services to the clients.

Today, MeTL has business interests in more than 30 different sectors and operates across east, central, and southern Africa. Its agricultural division is one of the largest producers of the fibre sisal, used in composite materials. It operates 11 sisal plantations covering a total land area of more than 40,000ha in five regions of Tanzania. The company also farms tea, cotton, and cashews. More than 90% of the cashews it produces are shipped to the US.

We trust that Mohammed Dewji is a befitting role model for family businesses and a worthy nominee for our  Wall of Honour.

Part of the article was a conversation with Mfonobong Nsehe which first appeared in Campden FB 

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