Hussein Sufian Presents Bakhresa Group: A Leading Industrial Conglomerate in Tanzania

Interview with Hussein Sufian, Director of Corporate Affairs and Managing Director of Bakhresa Group

What are the major challenges you face today?

One of the major challenges we face as a group is that Bakhresa has grown from a small business into a bigger business in a very short time. The one big challenge we are facing is getting the staff which are competent enough, especially in terms of finance, technology, managing the company. This is a challenge because in Tanzania, we have some specific labor laws which restrict the use of expat trade in businesses. We cannot get as good of a number of people as we would expect to get because of the limitations from the current regulation in the country.

Are there financial challenges like access to more funds?

We are fortunate enough to have access to finances both within the country and outside the country as well. That is not a challenge for us.

What is your scope of business and your competitive advantages?

We are a family owned business mainly focusing on agro processing. Our headquarters is in Tanzania, but we also have operations in East and Central Africa, specifically in Uganda, Rwanda, Burundi, Malawi, Mozambique, Zimbabwe, and South Africa. We are also exporting the products which we produce in almost the entire region of southern Sub Saharan Africa, exporting to Kenya, South Sudan, DRC Congo, Mozambique, Angola, Botswana. In some of these countries where we do not operate, we are exporting the products which we are producing. Our competitive advantage is that we know our market. We concentrate on producing high quality products at an affordable price. That has been our strength and because of that we have access to the masses.

What is your assessment of the business landscape in Tanzania?

In Tanzania, we have the Presidential Manufacturer of the Year Award. The Confederation of Tanzania Industries has been running these competitions for the last 10 or 15 years and every year we are ranked number one in the food processing category.

The government, through the regional economic blocs such as the EAC and SADC, is trying to promote the intra business between countries and also improving the business environment by normalizing the standards and trying to remove the non-tariff barriers. That makes it possible for businesses like us to have access to the regional market. There is very good cooperation as well. We are getting very good assistance from the business associations in the region such as the EABC, the Tanzania Private Sector Foundation, and the Confederation of Tanzania Industries. So, these are some of the instruments we are using to solve some of the problems or challenges we are facing. So, in general, the business environment is favorable. There are no hurdles or challenges which cannot be resolved.

You said that the key to successfully building a sustainable brand is a massive investment in technology for each product and that you will continue producing innovative products that meet the needs of your international and domestic clients. Is that still a key element for Bakhresa Group? How do you want to improve on that?

We are investing in technology because technology has advantages in terms of production. Normally, we go for state of the art technology in all our facilities and in whatever we are doing. If we look at our business model and the types of industries and our machines and where we are different from some of our competitors, it is simply because we believe that advancement in technology and using the best technology of the day gives us an economic advantage, being able to compete with our competitors. Technology increases our efficiency and reduces production costs. That has been key for our business success.

What are some specific examples where you have applied technology, where you brought something new? What are you expecting in the future? Are you open for new innovation, international partnerships, etc.?

For example, in our transport division, we are using brand new Mercedes Benzes for our distribution. Everyone knows the quality of Mercedes trucks. Most of our competitors are using cheap equipment from other manufacturers. In the milling sector, we are using Oola machines which are the Rolls Royce of milling machines. These are one of the best machines. We are also in beverages. We have an automated line and we are using state of the art filling machines which are fully automated, PLC operated, making sure that we are using the latest technology in the country. Presently, we have started Bagamoyo Sugar Limited. This is a new project in which we were honored by our late President to develop a greenfield sugar project. We are the first in the country to use a subsurface drip irrigation system which will be fully automated and the whole farm will be drip irrigated.

What is one of your recent projects and what will it bring to Bakhresa Group and the population?

We were awarded a farm by our late President, free of charge, to start the greenfield sugar plantation and also develop a sugar factory so that we can aim to reduce the deficit of sugar in the country. Now, the country is importing sugar for domestic use while there is a possibility of it being locally produced. This is one of the largest projects that we are in. We will be producing sugar which is very much needed by the population but we are in line with the government policy of trying to reduce the dependence of the country on importing sugar.

Are you going to export the sugar also or will it be reserved only for Tanzania?

This will be only for Tanzania.

What has been the impact of COVID? How has it affected your business?

In Tanzania, the government decided to take a very proactive policy. We did not have a lockdown. In many countries, the lockdown is what really affected business. In our case locally, we were not impacted. The only impact we feel is on our export market because some of the neighboring countries which we are exporting our products to were in lockdown. So, they limited the movement of the people, transportation, and consumption went down.

Now, are you doing the same amount of exports or has everything normalized?

We have a second wave. Right after we finished the first wave, when the business started to catch up, we started doing some export and our exports were somehow going to the level prior to COVID. But presently, in our neighboring countries where we are mostly exporting our product, we understand that there are some precautions which have been taken by them to try to minimize the impact of the second wave. So, we will wait and see what the level of the impact on us will be and it depends on the level of the measures which might be taken by the authorities in those countries.

What are your CSR activities?

We have a very unique policy within Bakhresa Group. Our Chairman, Mr. Said Salim Awadh Bakhresa, really does not want us bragging or making advertisements about CSR because he believes that he is a very good Muslim and that there is a very thin line between advertisement and CSR. We have a budget for CSR and we are supporting a number of causes in the country. We are sponsoring students, we are helping renovate hospitals, equipping them whenever there are natural disasters, and we have an NGO affiliated with the Group which is dedicated to CSR projects. We receive a lot of requests and we do support them whenever we think that it will have an impact on society.

What are some of your success stories? What awards or recognition has the company achieved?

In Tanzania, we have the Presidential Manufacturer of the Year Award. The Confederation of Tanzania Industries has been running these competitions for the last 10 or 15 years and every year we are ranked number one in the food processing category. This is our major success. One of the other successes that Bakhresa has as a brand is that we are a household name in Tanzania. Everybody knows about our existence or they are consuming our product.

What is the percentage of revenue that export brings to you compared to within Tanzania?

Recently, our export has gone down, but it is because of the good reason that we have opened up facilities in country which previously we used to export. Now, we have plants in Uganda, Rwanda, Burundi, Malawi, these are the neighboring countries. Previously, our exports were around 40%. But right now, our exports are around 10%.

What represents your business outside Tanzania compared to inside?

In terms of percentage, 70% will be in Tanzania. The business outside Tanzania will account for 30%.

What are you pushing at the moment for your strategic development?

We are pushing to more investment outside of Tanzania. As Bakhresa, we want to be African number one. We want to be an African brand so we have started with Sub Saharan Africa and we are consolidating our position here, but our plan is to go outside Sub Saharan Africa. So, we are looking into the Central African market and in the future we have plans to go into the rest of Africa as well.

Are you looking for international partners in that development growth?

Right now, outside Africa, we are looking for exporting our products. But for now, our immediate focus is on Africa. Our major forecasting strategy is to continue as Bakhresa. We normally have not partnered with anyone in these other countries we work in, at least for now.

Are you looking to attract skills, partnerships, interest from people in your current specific projects? Is there anything that you are focusing on?

We are working with many partners because our new sugar factory is a $100 million project. It is an agriculture project and there will be some outgrower scheme as well. Currently, we are working together with some banks and development partners.

Could you explain more about your story, your personal history? Why did you decide to join Bakhresa?

I am proud of the Bakhresa Group because I am part of the success within the group. I joined Bakhresa Group immediately after I graduated from the University of Dar es Salaam in 2000. Bakhresa himself has mentored me, personally, they have sent me to training, given me exposure and opportunity to act and be able to improve my managerial skills and become one of the leaders of directors of Bakhresa Group. I am proud of the Bakhresa Group, because without the Group and the plan within the Group, I would not be who I am today. Most of the managerial skills which I am using right now I have acquired here with the Group. We have a very unique culture. One unique thing about Bakhresa is that our employee turnover is very low. We have people who have been working here for the last 25 or 30 years and since I have joined, some of my assistants have been working with me for the past 15 or 16 years. Normally, once someone joins Bakhresa Group, the majority of them will stay with us for life. We are working as a family and I am enjoying my working experience.

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