Mohammed Hamid is one of Uganda’s most successful and prominent entrepreneurs. He is the Chairman and founder of Aya Group, a $200 million (annual revenues) conglomerate with interests in milling, food manufacturing, commodity trading, transportation and hospitality.
Hamid, 54, originally from South Sudan, traveled to Uganda as a teenager in 1987 to briefly visit his elder brother who owned a successful trading business in the country. He fell in love with the country and decided to stay on. He has since become a citizen. In the last 28 years, he has built one of Uganda’s largest privately-held conglomerates. Hamid is currently concluding construction on a 5-star Hotel in Kampala, which will be managed by Hilton.
I recently caught up with him for lunch at one of his offices in Kampala where he recounted his journey.
You are a Sudanese by birth, but you decided to live and build your life and business in Uganda. What’s the story behind that?
I was born in Sudan, but I have been in Uganda for many years, so I consider myself Ugandan. I came to Uganda for the first time in 1987 to visit my elder brother, Mohammed El Hamid, who runs Pan Afric Impex, a commodity trading house. I had just completed High School and I was preparing to go to the United States to pursue my studies, but I decided to come here to visit my brother first of all. But I fell in love with this country and I saw a lot of opportunities here. So I asked myself, “Why am I going to the States to study, when there are many good Universities here in Uganda?” Eventually, I decided to stay in Makerere University where I pursued studies.
Why did you decide to stay in Uganda?
My elder brother was already a successful businessman in Uganda, and I saw that this country was a virgin land with many opportunities. I’ve always had a knack for business and an eye for opportunity, so I decided this country was the perfect place to start and build a business.
Tell me about your first business venture
When I decided to study and live in Uganda, I joined my brother in his commodity trading business. It was tough because I was pursuing a degree in business and at the same time, I had to work with my brother. But those were defining years for me. I learnt about time management and prioritizing tasks. I learned the ropes of trade during those years. After working with my elder brother for a few years, I set out to launch my first business which I called Pan Afric Commodities. This was in the early 90s. I raised money from my brother and used my own savings and began to import wheat flour, juice, sugar, rice, beans, vehicle tyres, biscuits and wheat flour- anything that could deliver a decent profit margin. God blessed me and I became a millionaire within a short time.
So you built your initial fortune in trading. At what point did you decide to go into manufacturing?
Uganda is a landlocked country, so whenever we imported wheat flour, we had to store it at the Port and warehouses in Mombasa, and that came with its own challenges. Our flour could get contaminated since it usually has a shelf life of only six months; some of it could be stolen. So I decided it was time to build my own factory, because rather than import wheat flour that had a shelf life of six months, I could import wheat grain which has a two-year life shelf and process it into wheat flour, and make a healthy profit. So in 1998 I bought a milling machine from Premier Mills, a company which was owned by Sudhir Ruparelia, Uganda’s richest man. We moved the factory to a 15-acre piece of land I had acquired in Kawempe, near Kampala, and we started our milling company from there. We are now the largest milling company in Uganda, producing more than 20,000 tons of flour per month.
Aya Mills is the flagship company of your group. What are the company’s annual revenues?
Aya Mills contributes more than $100 million annually to our group’s bottom-line. For now, it is our largest business.
What do you think has been responsible for your success in the wheat milling business?
There is a popular meal in India called Chapati. It’s also popular a popular meal in neighboring East African countries like Kenya and Tanzania, but it was not as popular in Uganda ten, twenty years ago. So we capitalized on that. We actually introduced the majority of Ugandans to Chapatti as a healthy and alternative meal choice. Our marketing strategy and most of our advertising was centered on Chapati, and of course wheat flour is a major ingredient when you make Chapati. We went around showing people how to make Chapati with Aya wheat flour, and Chapati is delicious, so before we knew it, everyone in Uganda had began to accept Chapati. Everyone associated Chapati with Aya flour, and that association worked in our favor. We’ve never stopped producing affordable, high quality flour, so we dominate the market even till this day.
You also run a baking business? What informed that decision?
Our milling business succeeded rather quickly on account of the fact that be introduced Chapatis to Ugandans. As we kept producing our wheat flour, we realized we would make a lot of money if we simply added value to the wheat flour. As a businessman you’re always looking for the next opportunity, so I realized that the flour I produced in my mills could be used to make biscuits, bread, and other baked goods. So in 2000, I approached the Export Import Bank for a loan to set up additional milling factories. I added my savings, and I bought additional milling machines from Italy and established 2 more milling plants. Now we are the largest bakery in the country.
Tell me about your transportation and mining businesses
As I said earlier, as a businessman you are always on the lookout for new opportunities. As our milling business grew, I realized that we were spending ridiculous amounts in contracting haulage companies to transport our goods to distributors and retail outlets around Uganda. So I decided to set up my own transport company, so I bought 100 trucks and began FIFI Transport Uganda Limited, which is now a leading hauler in the East and Central African region. We now have a fleet of more than 3,000 Mercedes-Benz Actros trucks which are capable of handling containerized and bagged freight. Our mining business is still relatively young. We are scouting for gold and we have licenses in quite a few regions. When we make a major discovery you’ll be the first to know.
How many people do you employ in total, and what’s the key to successfully managing so many companies at the same time?
I employ more than 5,000 people across all the companies in the group. I make it a point to hire highly professional managers for my businesses- people who are committed to their job. I motivate them and provide the support that is necessary.
You are said to be very close to President Yoweri Museveni and some people believe you are just a proxy for some of the President’s businesses. Is that true? What is the link between your relationship with him and your business success?
(Laughs) President Museveni is a friend to anyone who is a friend to Uganda. For as long as I can remember, one of the President’s key mandates has been to support the private sector and to provide them with the enabling environment to thrive. President Museveni for the past two decades has provided stability. Uganda is one of the most stable countries I have seen around the world, and with stability, business thrive. The Government is always there to support private sector. If you want President Museveni to be your friend, just do good business here.
So is the President a business partner of yours?
Those are mere rumors. The President is a partner to everyone doing good business in Uganda.
What do you find as the challenges of doing business in Uganda?
The only problem is the fact that we are landlocked, so you find you have a problem with logistics. The nearest port to Uganda is in Mombasa, so goods sometimes get stuck in Mombasa. Apart from that, everything here is fine.
You’ve been building Hilton Kampala since 2006. What’s happening with it?
It’s a large project. It’s costing us in excess of $200 million. And if you’re spending that sort of money on a project, you don’t want to rush it. You want to take your time to build something of world-class standard. I signed a management contract with Hilton Hotel so it will run by them. We’re taking our time to ensure we build the best Hotel in Kampala.
But people say the project has taken so long to be completed because you’ve had a problem in raising money.
Those are rumors being peddled by my detractors. We have money. I have a long-term syndicated loan from several banks for this project. I have also put in my own money – tens of millions of dollars. We never planned to rush it because we can’t afford to make any mistakes. We expect to open officially open the hotel for business this year or by 2016.
Aya is firmly established in Uganda; do you have any plans to expand outside Uganda?
I’m in love with Africa. If I find any interesting avenues for expansion elsewhere, I will make the move.
As published on Forbes