Homegrown African Giant: How We Compete

A few months back, I had the honor of speaking at the Global Business Forum Africa, an annual conference that saw thousands of government, business and financial leaders gather in Dubai to discuss the future of Africa’s economies. As a panelist on the session – Made in Africa: For Africa, By Africa –?I spoke about my company, Mohammed Enterprises Tanzania Limited (MeTL), which is one of Tanzania’s largest homegrown multinationals with businesses spanning more than thirty industries.

Historically, overseas companies have dominated African markets. Coca-Cola, the world’s largest beverage company with the most comprehensive beverage distribution system worldwide, has?been?importing and manufacturing?beverages?into Africa for over 90 years. The beverage giant enjoys a near monopoly over Africa’s beverage market. In 1998 – the year I graduated Georgetown College – when MeTL was nothing more than a trading house, Coca Cola held a 79% share of the African soft-drink market, according to the New York Times.

However, in the span of 20 years, MeTL has built a beverage company that not only competes with Coca-Cola, but also enjoys a sizable and growing share of Tanzania and East Africa’s beverage market.

Similarly, Unilever is one of the largest multinational corporations in the world and is also one of the oldest operating in Africa. For over a century, Unilever has pushed onto the African market everything from food, condiments, tea and coffee to cleaning products, air purifiers, and personal care items. Yet, despite Unilever’s deep penetration into Africa, MeTL has succeeded in not only competing with but also enjoying a substantial market share in various categories, from oils to home and personal care goods to food and beverages.

How did a small, Tanzanian trading house transform into a multinational corporation capable of competing with global giants?

Tanzania’s Tax Regime. Upon my return to Tanzania from Georgetown in 1999, Tanzania was shifting its tax regime from a focus on trading businesses to that which supported manufacturing, value addition and job creation. The new structure saw a 0% import tax on raw materials, a 10% import tax on semi-finished goods, and a 25% import tax on finished goods. This protective measure encouraged and aided local industrialization.

Our family trading house immediately started to manufacture all that we were trading. Edible oils – we brought in crude oil and began refining, soaps – manufacturing, wheat flower – milling,?textiles --?ginning,?spinning, weaving, processing, mercerizing, dying, and printing. The list goes on.

With Tanzania’s supportive tax policies and Africa’s plentiful supply of raw materials and competitive labor, MeTL industrialized, building a fleet of almost fifty manufacturing plants across Tanzania and East Africa. The Coca Colas and Unilevers, who primarily manufactured outside of Africa, could no longer compete with MeTL’s prices. Tanzania’s market opened up to us.

At MeTL, we call ourselves “The People’s Brand.” We are made in Africa, by Africa and for Africa. While Proctor & Gamble and Coca Cola products enjoy shelf space in supermarkets or at higher end shops, on the streets, and in the hands of Africa’s masses, you will find locally manufactured?MeTL goods.

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