Mohammed Dewji: A Made in Africa success story

Mohammed Dewji has built his family business from a $26m trading and distribution company importing goods into Tanzania into a manufacturer of multiple products and one of Africa’s few companies with revenues of over $1bn. His next target is to generate $5bn of revenues by 2020 and employ 100,000 people across Africa.

Dewji is unassuming and doesn’t seek the limelight. However, this quiet demeanour should not fool you. Dewji is direct and to the point. He was voted Business Leader of the Year at the African Business Awards in 2015 and headed the Institut Choiseul’s list of leading young African economic leaders in 2016.

As one tracks his career it is obvious to see why. His major feat has been to oversee generational change in the family business and, along with this, its complete transformation, growing its revenues from $26m in 1999 to over $1.5bn last year.

He acknowledges the head start he received from being born a Dewji. The family business was very successful, essentially a trading house buying and selling soft commodities and finished products from tomato paste and bubble gum to tractors and motorcycles. The family was well off and Dewji was afforded the best schooling before going to Georgetown University. 

On returning to Tanzania he served as an MP, although that chapter has long closed and he does not foresee a return to politics any time soon. However, Dewji still has strong political views and is a passionate patriot. Tanzania has often been criticised for being slow at adopting regional integration and opening up its markets. This is something Dewji acknowledges but an approach he is also quick to defend.

He puts it down to issues of land and jobs. Tanzania had inherited a socialist system and its economy was not as developed, for example, as that of Kenya. Given that the country makes up 52% of the land mass of the East African Community, it could not just open up its markets, he argues.

Its weaker educational system could also compound issues in terms of employment. He therefore defends the gradual approach the last few administrations have taken, such as reducing tariffs over a five-year period to create a tariff free zone.

Today he is the principal shareholder, although it remains very much a family affair. His father is chairman of the group and other relatives occupy senior positions. They have grown the business organically without the help of private equity or foreign ownership.

The tipping point, he says, came when they moved from being an import/export business to a manufacturing one. To encourage businesses to produce locally, the government had imposed import taxes on finished and semi-finished goods. Where the business had imported edible oil, they decided to import crude palm oil and set up a refinery, and likewise with soap and many other products.

MeTL, as the group is known, produces foods and goods across 21 different categories, outselling the global brands and often outmanoeuvring the multinationals. Dewji has his own drinks brand, Mo Cola, his own bottled water company and even supplies maize to the World Food Programme.

Logistics and distribution are key

The key to success is their logistics and distribution network. They have a fleet of over 2,000 vehicles and because of their distribution outlets and warehouses across the entire country they reach markets and villages that others can’t.

And this can only be supported because of the wide range of goods that they produce and own, making the whole ecosystem economically viable, as well as hard for another company to replicate. The basket of goods, as he puts it, creates significant scale and a competitive advantage. Most Tanzanian households have at one time or another consumed a MeTL product. Another reason for their popularity is understanding the price points that locals will buy goods at, and their ability to produce goods at an attractive price.

The company is now the biggest employer in Tanzania, with 28,000 people. However, the way it is managed is very decentralised; each business operates as a unit with its own management team. What about future growth? Dewji says this will come from further diversifying the business into new lines of activity and expanding regionally.

Dewji is  looking into financial services (there is currently a bid on a bank) and insurance. He is also looking at a $200m project to produce 150,000 tonnes of refined sugar. The group still imports some finished goods, such as biscuits and pasta, but manufacturing those locally is on the cards too.

However, the real growth will come from replicating what he has done in Tanzania, initially in Mozambique, Malawi, Uganda, Burundi, Zambia and Rwanda. MeTL is finalising a $200m credit line with a consortium of banks led by RMB, Rand Merchant Bank, Nedbank, Investec, Citibank and RBL, an Indian bank, to finance this growth.

Afro-optimism

Despite his defence of Tanzania’s approach to regional integration, Dewji is a believer in the single African market and, as one would expect, the importance of buying African. He is a true Afro-optimist and thinks that leadership and governance throughout the continent is significantly stronger than it was 20 years ago. He is full of praise for Tanzania’s President John Magafuli, who was voted Person of the Year 2016 in our sister publication New African.

Magafuli has been criticised in some circles for being hostile to business using tax audits and new regulation as pretext for a private sector witchhunt. He has not changed the tax regime in any way, Dewji says, but wants businesses to comply with the law, like any business should.

And what irks him in Africa? He is frustrated that Africa has a net food import bill of over $35bn a year, when it is home to so much arable land. What about Dewji in 10 years time? He will be spending more time on his foundation. Running a foundation is more complex than running a business, he says. By then, expect to find some MeTL good in your kitchen cupboard or in your wardrobe.