TOP AFRIC AN COMPANIES 77 of Nigerian familyowned businesses intend to pass on to the next generation, according to PWC SHARE OF LARGE COMPANIES THAT ARE FAMILY-OWNED (%) As of 2013 or closest available year, based on location of headquarters Southeast Asia 80-90 Latin America 70-80 India 70-80 Eastern Europe 60-70 Middle East 60-70 China 35-45 Africa 30-40 108 THEAFRICAREPORT / N° 108 / JULY-AUGUST-SEPTEMBER 2019 Checks and balances: Rita Maria Zniber, CEO of Diana Holding For many private- equity operators in Africa, the business model is quite different to that seen in, say, the United States. Ziad Oueslati, managing director and co-founder of Tunis-based Africinvest, preaches the benefits of outside partners to deliver corporate governance in family-owned companies. In East Asia, there was a step change in growth when those types of companies reorganised; Oueslati says family businesses in Africa are heading in the same direction. For Rigouzzo, one of Amethis’s success stories has been Kenya’s Ramco Group, a large conglomerate. Amethis took a 30% stake in Ramco Plexus, the printing division of Ramco Group, freeing up capital for the conglomerate’s expansion into East Africa. Amit Patel, chief executive of Ramco Group, says the change came by building trust. “We didn’t even know that we wanted to divest until we had the conversations over the course of a year,” he recalls. “We thought: ‘Let’s open ourselves up to Africa and the world.’” The restructuring and rationalisation can quickly produce benefits. That may be because many of these companies historically grew in an opportunistic rather than a planned fashion. As Patel says, “People tell me: ‘You are a confused group. You are in everything,’ but that is simply because wherever we saw an opportunity, we just dived in.” And while this can makes for fast growth, it can mean that the relevant corporate structures to underpin the business may be lacking. Knowing when to look for partnerships For Yohannes Mekbebe of Côte d’ivoire’s Yeshi Group, this problem has become more apparent in the past few years. “Our story starts in 1979, with a partnership between my mom and the Beydoun family from Lebanon,” Mekbebe tells The Africa Report. It has grown into a sprawling conglomerate of 10 companies in eight countries, operating in retail, building materials, imports and distribution, with a big chunk of the business focused on steel rebar for the construction industry. His company finances property developments in all of its markets because “developers need space and time to execute payments. And it is becoming a real problem for us, as we are operating as a bank in many of these markets,” says Mekbebe, “and yet we don’t have a finance division to address these needs.” As a result, the Yeshi Group is looking for the right partnership to help it grow – perhaps a fintech company to help with payments, or maybe Visa, says Mekbebe. Cedric de Spéville, chief executive of the Eclosia Group (#295) in Mauritius, has relied on partners to help him learn. “In wheat milling, for example, we brought in an equity partner to bring real knowledge transfer,” he says. “And we are doing an aquarium in Mauritius. Rather than overpay consultants, we have brought in a player from the industry.” Discussions about foreign investors buying shares in a family business can quickly turn hostile, however. For good reason, argues Yeshi’s Mekbebe. Family groups often have their own hidden jewels, the value of which is only just being recognised: distribution networks. Mekbebe says they are critical to doing business on the continent. “Building a distribution channel in an African country can take 10 years, if not a generation. It’s what we all owe to the generations that preceded us,” he says. “And as a family business, you can be quite defensive over that.” Certainly, Mohammed Dewji, chief executive of METL, attributes the success he has had in taking on the Unilevers and Coca-colas of this world to “our very
© PressReader. All rights reserved.