‘For a large market invest in Nigeria, for a smaller market East Africa’

‘For a large market invest in Nigeria, for a smaller market East Africa’

The Kenyan business tycoon is chairman and CEO of the multibillion-dollar privately held Comcraft Group — a global conglomerate founded by his father more than 80 years ago. The group is a leader in the steel, plastics and aluminium markets in Africa.

In an interview conducted by Ivorian entrepreneur and author Eric Kacou, Manu Chandaria reveals some of his secrets for business success in Africa and how other businesses and entrepreneurs can pursue socially responsible practices that benefit the communities in which they work.

There’s a lot of talk right now about Africa and all the ripe opportunities on the continent. I wanted to ask you, as an African business leader, how does the rest of the world participate in Africa’s growth today?

The people who want to make a difference and an impact are coming to Africa without asking. They include companies from China, India, Malaysia, Indonesia and Korea. Africa is growing: Out of the top 10 most important investment destinations today, six are in Africa. [Among those are] Kenya, Angola, South Africa and Nigeria.

Everybody is rushing towards it because Africa now has a more stable political climate. Furthermore, nearly all developed countries are finding it extremely difficult to grow, but Africa is expected to grow probably at six per cent in the coming years.

If you were going to start working on the continent today, which sectors or which country would you look at first?

If I have an appetite that is big enough, I’d go to Nigeria. It has a population of about 165 million, and it supports surrounding countries, which have about 150 million people.

That’s over a quarter of Africa’s total population. So I would go there if I had the capacity to handle a large market. If my capacity was smaller, then I would go to East Africa, because there are about 135 million people from countries such as Kenya, Ethiopia, Uganda, Malawi, Tanzania and Rwanda, Burundi, Somalia and Eritrea.

Which specific sectors would you look at?

I’m currently working in the housing and shelter sectors, which are growing rapidly. I wouldn’t leave these sectors. I’m not as familiar with software or telephones, since our business has specialised in aluminium and steel for the past 70 to 80 years.

You have invested in Africa and in other parts of the world, including India, China, the US and Europe. How would you compare managing your investments inside and outside of Africa?

We are finding that managing businesses in the United States, Canada and Europe is more difficult than ever before because of the downturn in the economy. India is also a very difficult environment. We cannot manage a very strong, sound business in India because it is very competitive.

Meanwhile, managing businesses in Australia, New Zealand and China is far easier. But since most of the people in my businesses have come from Africa, we understand the pulse of Africa, which makes it easier to do business.

What type of mindset does it take to succeed in business in Africa?

First, you’ve got to accept that it’s Third World. If you are thinking about the comforts of the First World, they are not there. But once you get past that, you will realise that each country in Africa has its own speciality, and if you can capitalise on those specialities then you will do well. 

There has been quite a big debate about China’s involvement in Africa. There seems to be a negative undertone when talking about China, with people saying that China is trying to replace the West in Africa. There is concern that this will not benefit Africans. What do you think?

There are two ways of looking at it. First of all, I think that the West had for the past 10 years not really pushed what are known as social amenities — they supported political parties. In contrast, when the Chinese come into an African country, the first thing they do is build a stadium.

Second, they build a road. Third, they build an airport. Fourth, they build a hospital. You know, these are things that are close to the people. China has its own style of doing things, and they know what they want from Africa — specifically oil, copper, aluminium, etc.

There are major funds such as Carlyle Group and KKR that are now investing in Africa. I’ve heard that the level of fundraising for investment in Africa is at a record high. How can these investors partner with African entrepreneurs?

These investors should first ensure that they have a business model that will work. They must also be very sure that they cultivate better management practices with Africans.

If you bring outside management to oversee a project, you’re not transferring the know-how. At some point down the road, these big projects will be taken over by locals and therefore, working with locals is very important to ensure that the business is run well.

Taking a step back from the opportunities in Africa, you have lived through some of Africa’s darkest moments. What would you tell people about managing uncertainty and risk in Africa?

If I had my way, I would bring in more education to help people understand what is good for them. This is not being done. For example, 50 years ago Kenya gained its Independence, but things are no different now compared with how they were.

The older people are bitter about this, and the younger people are bitter because they do not have jobs. Having good governance structures will allow people to start taking ownership of their work, and I think that’s the only way that we will see change for the better.

You mentioned the need to provide jobs and education. I think the business sector has a role to play here. Related to that point, your family started The Chandaria Foundation back in the 1950s. From your experience, what can businesses do to be more reconciled with society?

If any business wants to succeed, they must remember that they have a social responsibility. For the past few years, we have been pushing the importance of corporate social responsibility.

We feel that if you get something out of Africa in terms of profit and growth, it should be your responsibility to invest back in the continent, specifically in education and health. When you’re operating a profitable business in Africa, you must ensure that all stakeholders benefit.

Entrepreneurship is a big topic in Africa. As one of Africa’s top entrepreneurs, what can you tell other people who want to be entrepreneurs? How do we create wealth?

Well, the first thing you must do is take a risk. Essentially, entrepreneurship is all about taking risks, and sometimes failing, if necessary. But failure always opens up another opportunity. But this entrepreneurial mindset is not only for business; this is applicable for running clinics and councils, too. You have to figure out the best way to run these operations.

Looking back to my younger years, I was an engineer and we had goods we couldn’t sell. I was asked to sell them in another country, so I went to Uganda.

I didn’t know how to sell anything but I went to every shop and spoke with all my potential customers. In a year, I made each one of them feel comfortable with me, and so I became the first one to get orders instead of my competitors. It took me eight or nine months to establish myself.

What is the biggest leadership challenge you have faced and how did you deal with it?

I used to have a lot of conflicts with my elder brother about managing our businesses. We always had conflicting ideas. I had to ask myself: “Am I going to win this man over, or am I going to fight him?” So I decided that I would win him over.

And that involved following through on his orders and executing his ideas, but I would do it better than what he had imagined. He started realising: “My God, he’s doing exactly what I wanted him to do but even better.” The point is that when you face a challenge, you must face it, or else you won’t accomplish anything.

Any message you want to leave potential investors?

My message to them is simple: Your destiny is in your hands. Don’t expect somebody else to do it for you. In 25 years, my business was in 25 countries. How did we do this? Number one: You must believe in yourself.

Number two: You must take risks. Number three: You must get truly involved. Don’t let others decide your destiny for you.

In Africa, we are sitting on a huge amount of land with water, minerals and other resources, but we must have the determination to move forward and execute sound plans.

-The east Africa