HOLDINGS

Tanzania 2018 | ECONOMY | B2B

A diversified business line and excellent distribution network are the keys to success for these two holding companies.

Toufiq S. Turky
TOUFIQ S. TURKY
CEO
Turkys Group
Mohammed Dewji
MOHAMMED DEWJI
President
MeTL Group

How has the company grown since its establishment and what has been its strategy?

Toufiq S. Turky Turkys Group grew from a bottling plant to cement trading, which was our core business, manufacturing, and, eventually services. We took our inspiration from Dubai, Singapore, and Hong Kong, which are all massive service-driven economies. Trading is still our backbone: we supply almost 80% of building products and 60% of food products in Zanzibar, and 40% of food products in general in Tanzania. We have also refined our value streams, working backward in the cement line through the construction of our cement plant, and adding value downstream in the hospitality and catering sectors. The key to our strategy has been diversification. Most holdings companies in Tanzania have dedicated themselves to one sector: food products, energy and mining, or communication. However, Turkys Group is constantly on the lookout for new ventures or business propositions. When we travel abroad and see what is on offer in other world markets, we take inspiration to start something similar on our home turf. The ultimate objective is to improve the quality of life and empower our people to reach similar standards of living that can be found elsewhere.

Mohammed Dewji MeTL is a family business with many different branches. We began as a trading house dealing in imports and exports. Today, we still import a huge range of soft commodities, in total around 200, and export all cash commodities. However, we have also integrated many of our operations, and now manufacture in over 40 industries. We are in direct competition with many of the multinational FMCG giants, which we consider a considerable achievement. We have some key areas of focus: textiles—since we are involved in sisal cultivation and processing, and have three textile mills in Tanzania producing over 100 million meters of cloth—grain, plastics, and soft drinks. We have also started boosting our agricultural arm of the business. We have developed out-grower schemes, processing plants, and look to increase our export footprint of these goods. The key to successful diversification is distribution. We have thousands of outlets countrywide, over 2,000 vehicles, and the warehousing and ICT infrastructure to support this. All in all, we contribute a little over 3% of the GDP of Tanzania and employ 28,000 people, making us one of the largest employers in the country after the government.

How can the government further drive Tanzania's industrialization agenda?

TST First and foremost, we need to tackle massive challenges in infrastructure—not just physical, but also in terms of policy. If policy is not clear or misinterpreted, then this puts the country at a disadvantage when it comes to attracting investment to boost industrialization. For example, while taxation tariffs in Tanzania are fairly similar to other countries within the East African Region, the interpretation of the legislation has differed from that of say, Kenya. The actions of the Kenya Revenue Authority have pushed the country up to 80th in the world in terms of ease of doing business, while Tanzania lags behind at 132nd. The second major concern is labor. We are limited in our array of vocational training on offer for those who wish to focus on high technology or highly specialized industrial skills. The government has clearly demonstrated an understanding of the importance of boosting human capacity; however, it needs to streamline the process of training. While we do want to improve the caliber of expertise among native Tanzanians, it is important to bring in those people who already have the necessary skills to bring up the level in the first place. I am President of the Zanzibari Chamber of Commerce, Industry and Agriculture (ZCCIA), and we have been working closely on this front, signing deals with aid organizations from the US, the German government, and BEST AC.

MD We are at the front of driving industrialization, always on the look out for industries we can develop domestically. When we have the raw material, competitive pricing, and available human resources, it is possible to develop diverse lines of production, and enable those to flourish. We also aim to develop linkages between our products; for example, we are into grain milling, but have begun exploring opportunities in processing and value addition and are opening lines in biscuits, bread, pasta, and noodles. With the government placing a huge emphasis on industrialization, particularly in the Five-Year Development Plan, and working in general to improve the business environment, we are expecting more and more players to move into this sector with us. The administration has realized, for example, the importance of incentives in this field, such as removing VAT on certain machinery imports.