Entrepreneurs see a world of opportunity
It’s a tough job, but somebody has to do it. I have just spent the past five days in Monaco to attend, for the second time, accounting firm EY’s Entrepreneur of the Year competition.
Alas, the winner of the South African competition, Super Group CEO Peter Mountford, didn’t win the global competition, but given the quality of the 50-odd entrants, his chances were small despite Supergroup’s amazing turnaround.
It was won by Canadian Murad al-Katib, who runs a global food company that specialises in lentils. Who would have thought there was an enormous future in lentils, but when Katib explains it, it’s kinda obvious.
Lentils are a high-protein, low-cost crop with a low environmental impact in a world in which the population is increasing by 75-million people a year – more or less the population of Canada.
Katib, an enormous man with a disconcertingly bubbly personality, is CEO of AGT Foods and Ingredients, which has a big business in SA, based as one would expect in Krugersdorp. AGT is not a food company as much as a food trader, selling seed and buying the product to sell on.
He implicitly acknowledges, in case you were wondering, that lentils taste horrible, but perhaps that’s just my personal preferences showing. However, lentils and beans are increasingly being sold in spice-rich packs. That is the way they are eaten in the Middle East, which is where Katib’s family originates.
AGT, with a market cap of $450m, is small by the standard of food giants such as General Mills of the US and Associated British Foods, which are both about 60 times larger. But it handles about a quarter of the world’s lentils and has big stakes in a range of other pulse crops. AGT actually looks fairly cheap, with a forward price:earnings ratio of about 14, which is about half that of the giants, but it does not appear to be producing a very much higher rate of profit at the moment.
The judges of the EY competition do seem to love an immigrant dimension to the story; 2016’s winner was a refugee. And, of course, social awareness is crucial. Katib said he didn’t really see “social entrepreneurs” as particularly a class on their own; social entrepreneurship was now simply an integral part of doing business. Younger consumers, in particular, expect companies to operate in an environmentally and socially conscious way.
It sounds odd to hear entrepreneurs talk about social investment in the supersalubrious surrounds of Monaco, reputedly the richest place on earth. Is it possible to be serious about social entrepreneurship in the Monte Carlo Yacht Club, where it costs about $20,000 a day to moor during the Grand Prix?
If ever there was a visible example of mammon, it’s Monaco. It’s a pretty town set on steep slopes and obviously had its building heyday in the ’50s because it shares some of its modern architectural style with Amanzimtoti. But there are also plenty of old-style houses that are classically French provinciale, beautiful and classy. The town is car mad, and turning your head to watch the Ferraris go by quickly becomes pointless by repetition.
For entrepreneurs, Monaco is the ultimate prize or at least it’s presented as such. But the survey EY puts out every year shows, or at least purports to show, that entrepreneurs take the social aspects of their work very seriously.
EY expanded its survey in 2017 from the winners of the competition around the world to what it describes as “middle-market” companies (with a turnover of up to $3bn). It surveyed 2,340 business leaders in 30 countries about their ambitions, challenges and strategies. This group consists of about 99% of all enterprises and about 45% of global GDP.
The vast majority (90%) signed on to the idea that growth cannot be sustainable unless it benefits a wider community. For this group, “inclusive growth” is not an add-on strategy; it is the whole point.
About a third of those surveyed were aiming for growth of between 6% and 10% over the next year; and 14% of respondents are looking for 16% and over.
The most surprising finding is that smaller companies are enthused by the ructions dominating the political stage, which they see as possibly providing openings to gain market share and grasp new opportunities. Fully 89% of all middle-market C-suite executives agreed that uncertainty provided them with opportunities to disrupt market leaders.
In the dappled sunshine of the south of France, you can never quite be sure if what you are seeing is real. But it does provide a glorious counterpoint to the gloom of SA and the world’s seemingly endless wrangling. As entrepreneurs show, confidence is the key. If it’s impossible to be confident about our present, we should at least be confident about our capacity to change it.
ALAS, THE WINNER OF SA’S COMPETITION, SUPERGROUP CEO PETER MOUNTFORD, DIDN’T WIN THE GLOBAL COMPETITION GROWTH CANNOT BE SUSTAINABLE UNLESS IT BENEFITS A WIDER COMMUNITY … ’INCLUSIVE GROWTH’ IS NOT AN ADD-ON STRATEGY; IT’S THE WHOLE POINT