Somali Companies & entrepreneurs active in Africa

[Constantine MMX]

Originally Posted by Xusein

LONDON, February 3, 2011 /PRNewswire/ -- By handling remittances from the international Somali diaspora, Dahabshiil provides a vital source of income for African communities and in doing so, has become Africa's largest money transfer company, according to a recent article by the BBC.

http://www.digitaljournal.com/pr/215084

That's impressive, hope they continue growing and branching out into other sectors.

[Xusein]

Their debit card venture as well as telecom in Somaliland as well as Islamic banking in Djibouti is a start to the future empire. Go Burco.

[Janub]

Their history is knit with episodes of devastation – war and hunger. They have been accused of offering a safe haven to Al Qaeda terrorists. And recently, they have redefined the art of piracy, in which large ships have been captured and released after huge ransom payouts.

Yet, despite their shattered hopes back home, the Somali community in Uganda has taken the economic landscape by storm, enjoying a commendable share of the country’s fuel industry, among other sectors. DEVAPRIYO DAS looks at this business community.

GOOD SOURCING

Hassan Ahmed, a Ugandan Somali, and Director of the prominent Somali-owned City Oil franchise, hints at the secret behind Somalis’ success in business. “Somalis have always had links to many areas of the world”, he says.

“With that link, they are able to have very good sourcing. Every time you source well, it will result in benefitting the consumer, because you are able to bring the costs down.”

That strategy bodes well with Uganda’s consumers who depend heavily on imports but whose purchasing power is low. It also explains why Somali businesses have become an accepted part of Uganda’s commercial life, covering essential services like fuel stations, foreign exchange, money transfer, and supermarkets.

FUEL STATIONS

Ahmed reveals that City Oil was formed in the 1980s as Mandela Auto Spares, and started by selling spare parts. The company then graduated to selling tyres, before realising it could capture a larger market by setting up fuel stations.

“If you look at our stations, they are not your typical stations”, says Ahmed. “They are giving auxillary services that complement fuel.”
Today, there are various Somali owned petrol station chains, including Hashi Empex, Hass Petroleum and Hared.

It is a competitive market, especially as global oil prices have followed no perceivable logic in the past 18 months; which also means the auxillary services provided by chains like City Oil have not automatically led to more customers in these difficult times.

“The public has been very sensitive to price,” Ahmed remarks. “We find that it’s very difficult to sell fuel if you don’t have the right price at the pump.”

Following the liberalisation of the fuel market in Uganda, Somali fuel enterprises have helped make prices more competitive. “Right now the (profit) margins are at their lowest point”, Ahmed observes.

He believes that even if Uganda commercially exploits and refines its crude oil reserves locally, Somali fuel stations would remain in business. “Because that fuel still needs to be pumped into vehicles”, he says. “A network needs to exist”.

HISTORIC LINKS

It is a network built carefully over time. The first Somalis to settle in Uganda came in colonial times, as the so-called Somali Scouts in the imperial British Army. Many stayed on and assumed Ugandan citizenship, with large numbers working in the meat industry.

Thousands are believed to have left the country during Idi Amin’s rule, returning only under the NRM Government in 1986.

The current conflict in Somalia has witnessed an influx of refugees into Uganda. Some have been settled in camps such as Nakivaale in Western Uganda, while others have been absorbed by relatives living in Kisenyi and surrounding areas.

Many have prospered, while some, like construction queen Amina Hersi Moghe, owner of the multi-million-dollar Oasis Centre and Laburnum Courts in Kampala, have defied gender and cultural stereotypes to become spectacularly successful. In fact, Ms Hersi was named Woman Investor of the Year 2008 by the Uganda Investment Authority.

GOOD RATES

Being a resilient people, Somalis have prospered because they are willing to take risks and accept smaller profits. Yassin Mattan, Head of Business Affairs for the Somali Community Association in Uganda, explains that when it comes to trade, “everyone wants to be very competitive in terms of the pricing factor, so it’s the margin that people are looking for.

While some people are looking for a higher margin, these guys [Somalis] are looking for a lower margin. They’re looking at the turnover.”
Hassan Mohammed Hersi, for example, has been Manager of Half East Forex Bureau on Kampala Road, for 11 years.

“The business of exchange is all about competition and it’s very tough business,” he says. “It needs experience, needs also capital, and needs you to be a well-known person in the business for a long time.”

Born and bred in Uganda, with many business contacts, Hersi felt he could profitably run a forex business.
Today, most of his clients are Indian and Chinese traders involved in high-volume import-export businesses. “It’s all about your rates,” he responds, when asked how he attracts and retains his customers.

“People know you through your rates, what good service you give them, how your location is, security, all that. [But] if your rate is the best, they will come and buy from you and sell to you.”

BREAKING GROUND

Yassin Mattan himself took a risk by engaging in commercial farming, a first for Uganda’s Somali community. “I saw it as an opportunity, this lack of commercial farmers in Uganda,” Mattan says, “and the potential was there both as a business, and at the same time, for
providing food security for the country.”

Today, his Kayunga-based Maple Farms employs 40 people, utilises scientific farming practices, concentrates on growing maize and basmati rice over 140 acres, and is generating roughly 50 tons of food grain per year via two annual harvests.

Most of the crop is sold locally as internal demand -exacerbated by food shortages and sales of Ugandan harvests in neighbouring markets like South Sudan - has skyrocketed.

Recently, the Somali community in Uganda announced it would earmark Shs1.4 billion to further expand food grain production in Kayunga.

As Somalis continue to invest in Uganda’s burgeoning small and medium enterprise sector and contribute a growing share of taxes, it becomes clear: this is a community that is thriving and here to stay.

[xJamaax]

Aden Mohammed-Kenyan Somali (?)
Barclays Managing Director for East and West Africa!

[nairoberry]

Originally Posted by popa1980

I think its funny that people the Kenyan forumers defend their Asian community so much when it is no secret that they run monopolies and price-fixing is rife.

why should i even bother with you.



anyways, i miss eatleigh man(called isich by nairobians) i used to go to eastleigh the one close by the airforce base(that is eastleigh line saba, right? or is it line 8?) i used to take a matatu(public service vehicles) from imara daima(off of mombasa road) go to town(to fleece money from my sister) then take another matatu(remember there was a matatu that used to ply the eastleigh route called three 6 maafia?) to estleigh eat some good somali or indian food, and then walk over the little bridge into outering estate-maringo estate-and jericho because most of my friends used to live there(sometimes i would walk to buru buru cross mutindwa market into umoja estate). then i would take another matatu from jogoo road to pipeline and then walk past daytona club and back into imara daima. GOOD TIMES MAN

if you have lived in eastlands you know what i am talking about. westlands can go kick rocks

just writting all that made me miss homesick. i miss nariobi with all its chaotic lifestyle. THERE IS NO CITY LIKE NAIROBI IN AFRICA.

[Xusein]

Eastleigh is pretty famous among Somalis. I know people who have lived there in the past.

I don't want to turn this into a "photo thread" but business there seems to be flourishing.

Looks like Muqdisho would be like if it wasn't partly a warzone.


http://img156.imageshack.us/img156/7...oyalhotel1.jpg


http://img577.imageshack.us/img577/3393/dsc01731oi.jpg


http://img137.imageshack.us/img137/5...alacehotel.jpg

[Xusein]

Opened a few weeks ago.

Nairobi Star: Yussuf Haji Opens Madina Mall



The rapidly evolving face of Eastleigh is now host to one of Nairobi's newest commercial buildings as Madina Mall opens its doors. The modern multipurpose building will be officially opened for business tomorrow by the Minister for Defence Yusuf Haji, according to Dr Faisal Guhad of Al-Bushra Properties Ltd.

The building, located along First Avenue Eastleigh, consists of a supermarket in the basement, a 99-room modern hotel which will occupy several floors, a hospital facility with maternity, dental and in-patient and out-patient wards, offices and shop stalls.

The shops occupy the ground floor while the offices, internet café, and a restaurant sit on the first floor. The mall also hosts a conference hall, a mosque and gym facility on the fifth floor.

http://garissacity.blogspot.com/2011...ns-madina.html

Video of the opening (in Somali).

[Ayatulahi]

Grand Royal Hotel, Eastleigh, Nairobi

[Kenguy]

If it wasn't for the nearby airbase, most of those buildings would be taller. Eastleigh would rival other upcoming areas in Nairobi like Upperhill and Westlands.

[BUTEMBO21]

Hence me respect for Somalis.

[Constantine MMX]

The major plus about Somali businesses in other African countries is that the majority of their profits goes back into the local economy of that country. These businesses main benefit for Somali merchants based in Somalia itself is the opening of new markets, and potential overseas partners.

That's a win-win situation.

[Xusein]

True. I can see many joint ventures being made between these businessmen and ones based in Somalia when times are good. People are just waiting to build their cash until the real boom: when Somalia is finally stable enough to see investment. There will be millionaires made, I tell you!

[Xusein]

Money man serves the Somali diaspora

By Katrina Manson
Published: May 24 2011 21:25 | Last updated: May 24 2011 21:25



Aged eight, Abdirashid Duale would rush back from school to take his place in the family’s small shop in Burao, a dusty livestock trading town in Somaliland, selling everything from clothes and shoes to flour and sugar.

Today he divides his time between London and Hargeisa, the capital of Somaliland, an autonomous region of Somalia that declared independence in 1991, and is the chief executive of Dahabshiil, a global money transfer company that operates through 24,000 outlets in 144 countries. Dahabshiil also offers debit cards, reward points and SMS notification services and, soon, Somaliland’s first fully operational bank which is currently under construction in the capital.

“From a very early age I got used to talking to adults ... while other friends or even my brothers used to play football, for me my fun was to stay in the store, and sell people goods,” he says. He even drove his father’s car, at age 13. “I was in competition with other people who were working for my father, so I wanted to be useful and serve him,” he says, speaking in the garden of a Nairobi restaurant.

In four decades, Dahabshiil has evolved into an internation*al bus*iness that uses the most modern technology. However, working in Somalia, a failed state, means danger has never been far away: in 2009, two workers were killed in an attack by al-Shabaab, an Islamist group, forcing the business to close half its 50 or so Mogadishu outlets. To this day, the company sometimes transports cash hidden in cars. Mr Duale thinks the company’s best protection is its local approach: “We are ‘money without borders’ – people need us. Customers see us as a part of them. We’re bringing money to them, not guns, so they will look after us.”

The business was transformed from the shop of Mr Duale’s 1970s childhood into a global business by finding opportunities in a string of calamities that have befallen Somalia – from poverty to war and terrorism.

For the family’s story is also the story of the Somali diaspora. Poverty and trade first sent Somalis to Yemen, Dubai and the Middle East. In 1991, the capital Mogadishu was overwhelmed by fighting between rival groups, earning Somalia its label as a failed state. Perhaps 1m Somalis scattered throughout east Africa but also to the Middle East, Australia, Europe and North America. “After 1991 all the Somalis were displaced in a way,” says Mr Duale. “I’m one of them, so we know where they live, how to communicate with them and serve them.”

Mr Duale says his company handles remittances of $200m a year to east African countries outside Somalia, and that the company also remits a large proportion of an estimated $1.6bn sent back to Somalia every year, making it the largest money-transfer service in the Horn of Africa.

Yet Dahabshiil started by default, a device to overcome one of many challenges in running a business in Somalia. In order to stock the latest shoes from Milan, Mr Duale’s father, Mo*hamed Saed Duale, needed hard currency for purchases from the trading hub of Yemen. Meanwhile, the Somali diaspora was keen to send money home, so Mr Duale’s father would collect hard currency from them in Yemen to buy the shoes, then hand the money over to the “lenders’” family members in Burao in local currency, making an additional cut on the exchange rate. Remarkably, rather than pay interest, he had found a way to turn a profit on borrowing.

That sideline would become the heart of the business. But it was not always clear it would be that way. Mr Duale can still remember when a liberation force invaded one day in 1988, and the defending regime res*ponded with bombs: “There was blood everywhere – we couldn’t stay. We left our car, our shop, our house, everything.”

The family fled to live among nom*adic herdsmen and eventually his father reached the Ethiopian border, found Somalis in desperate need of sending and receiving money, and set about making it happen. The business model soon changed, as no one want*ed rapidly depreciating local currency. Instead, the company made a double cut by charging a commission and operating a currency exchange service situated in its outlets, a model it keeps to this day.

Getting money back to Somalia was often risky and, in some countries, restricted. “You can manage to hide $200,000 yourself if you know the technique,” says Mr Duale of people’s ef*forts to secrete cash.

Another hurdle to expansion was regulations. When Mr Duale registered as a teenage sole trader in London’s East End, home to waves of immigrants over centuries, to set up the first European branch of Dahabshiil, he met an alien way of doing business: “I knew Somalis, I knew how to serve them, but I did not know about formality – in Burao you don’t need accountants, lawyers, a bank.” Despite his unsteady English, he found an accountant, bought a guide to doing business in 12 European countries and began unravelling the red tape, working seven days a week.

Dahabshiil has been so good at complying with host countries’ regulations that it won customers when al-Barakat, one of its Somali competitors, was shut down by the US after the September 11 2001 terror attacks. Mr Duale insists that no money within Dahabshiil funds pir*acy – an*other Somali blight – or terrorism, and regularly co-operates with international agencies when asked.

The father-and-son team plays to its strengths, especially when it comes to understanding the culture in which the company operates. Mr Duale looks after the western side of the business and his father, now chairman, looks after Africa. The strategy has helped the company keep up with developments: today, funds can be transferred online in minutes, and it uses Facebook and Twitter, alongside developing its banking and tele*coms operations as part of Dahabshiil’s expansion.

Although they work as a team and, as a boy Mr Duale hankered to be like his father, relations are not always straightforward: “Sometimes you don’t know – are you talking to your boss or are you talking to your father? When he tells me my mistakes is he talking to his son or to his staff? Sometimes you would like things to be a little bit separate.”

Doing business in hard places

Abdirashid Duale learnt how to expand the family business amid war, poverty and even the strictures of doing business in the west.

● Start young. “In Burao [town], you can take more responsibility from a very early age: you become more mature by doing this kind of activity. It was job training from a very early age.”

● Serve your community. “Without knowing your people as your customers and your staff, and them trusting you, you cannot be in business. I knew Somalis, I knew how to serve them, so it was not some sophisticated customer I had to find.”

● Adapt. “I could have said ‘I don’t want to expand in Europe – it’s too much, it’s not easy to be in that field with a different language’ but I didn’t. I said: ‘I have to get used to it.’ And then I came back to Somaliland ... and I had to re-educate myself.”

● Market yourself. Dahabshiil took on a UK public relations agency to deal with international press interest when the company issued its first debit card in Somalia, which was – and remains – a failed state.

● Do what you love. “It’s by feeling passionate about it that you expand your business.”

http://www.ft.com/cms/s/0/afae0e64-8...#axzz1NWulQywX

[Constantine MMX]

Hashi Energy Ltd was founded in Kenya in 1991 by Mr & Mrs. Hashi. The company was known as Hashi Empex Ltd before undergoing corporate re-branding in 2008



Hashi Energy Ltd started out as a Kerosene distributor for Chevron Kenya Ltd then known as Caltex Oil Kenya Ltd. The Company engaged in filling Kerosene Jerricans in Mombasa and distributing to Rwanda and DRC markets. These markets were challenging, with unfavourable terrains and political instability.

In the mid 1990s Hashi Energy acquired depots in Eldoret and Kisumu and used these facilities to supply Kerosene to the western Kenyan market and to export to DRC, Rwanda and Burundi.

In 1996 Hashi Energy Uganda Ltd was incorporated as a subsidiary to Hashi Energy Ltd. The company began selling bulk fuel to customers in Uganda and DRC. In 2001 the company acquired a depot in Jinja which was used as an operational hub for the Uganda market. Thereafter the company acquired several service stations and mini depots in Jinja, Kampala and its neighboring towns.

In 2007 Hashi Rwanda SARL was formed in Kigali, 2 years later the company acquired 2 service stations in Kigali.

Our Business

Hashi Energy’s core business is importation, distribution and marketing of refined petroleum products; the company is one of the oldest indigenous oil marketing companies in Kenya.

Over the years the company has grown to become a major player in the Oil business supplying over 240 million lts of petroleum products annually to the East African region. The company has a capacity to supply 360 million litres per year.

http://www.hashienergy.com/

[Ras Siyan]

I'm impressed! Now WTF is our government waiting in to call these brothers to invest in Djibouti

Somaliyei Djibouti maalgaliya, anaka isku dadee!!!

[Janub]

Originally Posted by Ras Siyan

I'm impressed! Now WTF is our government waiting in to call these brothers to invest in Djibouti

Somaliyei Djibouti maalgaliya, anaka isku dadee!!!

Djibouti has few benefits. A Somali can open a business in the center of Tanzania or Uganda and he can automatically link up over 100 million customers from Zambia to South Sudan who are settled and rapidly urbanizing. Same with Kenya. The land is cheap, taxes are low, and the governments in the region are all very business-friendly.

But setting up a business in Djibouti is a hassle. The land is expensive, there are few venues for importing and exporting and they're always expensive, the wider region [Eritrea, Somalia, East Sudan, Ethiopia, Yemen] is largely nomadic, not modernizing, and will have a low purchasing power for the foreseeable future; the only expendable cash is usually saved for dry season for necessities so there's no space for leisure spending. The governments in the region with the exception of Somalia are all authoritarian and punish free enterprise.

Its unfortunate but the answer is a no-brainer. The Horn is a terrible place to setup a commodities or service-based business while East Africa is famed for this sort of thing, and Somalis always enter service & commodities businesses. The Horn would be great only for manufacturing and no Somalis do manufacturing.

[Xusein]

There are a few Somali investors in Djibouti AFAIK but they have strong connections to the government.

I'd say that the hardest thing for outsiders to go to the Horn isn't nomadism but the fact that it is a very hostile environment for newcomers with no connections. One of the reasons why Kenya has prospered in comparison is due to their relative tolerance to outsiders.

[Janub]

Originally Posted by Xusein

There are a few Somali investors in Djibouti AFAIK but they have strong connections to the government.

I'd say that the hardest thing for outsiders to go to the Horn isn't nomadism but the fact that it is a very hostile environment for newcomers with no connections. One of the reasons why Kenya has prospered in comparison is due to their relative tolerance to outsiders.

When I said nomadism I was referring to how the lifestyle affects the stability of the customers as well as the frugality of nomads compared to settled people who have a lot more to spend on average. There's a tiny income base in the region surrounding Djibouti. But you're totally on-point with the second part, the hostility of the environment is a huge negative but its entirely the result of the region's authoritarian governments and the lack of economic freedom in general. In Kenya there are no controls, no government standing over your shoulders and so forth, such is the opposite in the Horn.

[Xusein]

I'd say it's half from the government and half from the general attitude by most in the region so I get your point now. The harsh environment has made people stick to their own while eschewing outsiders. Also doesn't help that the most historically forward regions are currently under a transitional period ATM.

Djibouti is more cosmopolitan in comparison especially to it's surroundings and theoretically has more potential as an expat Somali hub (they are mostly Somali Muslim after all, while Nairobi is not) but I think investors have found Kenya to have better gains due to market size and freedom, and now you see places like Eastleigh that are big. All about economies of scale I presume.

[Janub]

Originally Posted by Xusein

I'd say it's half from the government and half from the general attitude by most in the region so I get your point now. The harsh environment has made people stick to their own while eschewing outsiders. Also doesn't help that the most historically forward regions are currently under a transitional period ATM.

Djibouti is more cosmopolitan in comparison especially to it's surroundings and theoretically has more potential as an expat Somali hub (they are mostly Somali Muslim after all, while Nairobi is not) but I think investors have found Kenya to have better gains due to market size and freedom, and now you see places like Eastleigh that are big. All about economies of scale I presume.

When it comes to business, people don't care about ethnicity or religion. If such was the case, Somalis would be investing in Mombasa and not Nairobi. I honestly don't think Somali entrepreneurs will trade East Africa for the Horn or Djibouti at any point in the future. Djibouti's economy is too formal, too controlled. And now that the major companies are rolling in, typical mid-level Somali companies can't even compete. Outside of Somalis, people in the horn are generally very frugal and cheapskate, and the mentality in the region just won't allow the average person to move ahead that fast or to have ambitions, people are stuck in a cycle and a culture that chastises change, alongside a long contemporary culture of socialism. Its just impossible to compare EA with HOA in terms of conducting business and trade, its night and day, and the potentials for both regions aren't the same either.

When I think of Kenya I think of FREEDOM. Crime, yes, corruption, yes, but I physically FEEL free when I'm there. When I step inside the Horn I feel like I just walked into a prison, the whole region is a mini-North Korea, full of communist/socialist trash mindset and authoritarian dickheads down to the police, even bribes won't save you.

The EAC states did something right at some point, and its paying off. My experiences in the region (not Djibouti in specific) led me to believe that things just won't change in terms of street-level economies. If Somalis could have successful businesses in the Horn outside of Somalia, they would. But they don't, for good reason. And now that the seeds have been sown and people see the fruits of the region, Somalis will be a permanent and exclusive fixture in the EAC.