BY JUDY OGUTU AND KADAR M.
Mr Abdirizak Ahmed, known to many as ‘’Gaada’’, reclines in his chair and breaks into a prolonged laughter. “I am 48 years old. Write that,” he tells me jokingly when I ask him how old he is. He quietly watches my pen before bursting into laughter again. Gaada comes across as a generally happy person. The display of laughter soon turns out to be a mark of the new optimism that is spreading among the Somali business community, that the country is slowly finding its path to peace and development. Gaada, who holds a Master’s degree in sustainable development from Gothenburg University in Sweden and a Bachelor of Commerce Degree from Karachi University, is the Chief Executive Officer (CEO) of Sahalpack, a packaging and labelling company. His company mainly does business with other businesses in Somalia.Sahalpack supplies these companies with labelling materials.
“The industries we supply cater for beverage, pharmaceuticals, cosmetic, horticulture (in Kenya) , confectionaries and bakeries,” he details. The company is young, having began operations only late last year. “For eight months, I was planning for this business. Printing is too big, so we settled on flexible packaging,” he states. Gaada’s business model is Business to Business (B2B). He invested close to a million dollars in the business, he says. He notes that most industries in Somalia are new as many manufacturing industries are currently setting up there. Gaada thus envisages a big market in the country in not so far a future. Sahalpack has a staff of 30 workers, half of them casual workers.
“These employees are from Kenya. The factory needs expertise, which is not easily available in Somalia,” Gaada says. The Horn of African nation has been ravaged by decades of war, but it is currently rebuilding. Most Somalis live in the diaspora, which is what makes getting skilled workers in the country such a daunting task and a major challenge to companies setting shop there. According to Gaada, operating a business in Somalia is challenging given the infrastructure in the country.
First, there is intermittent supply of electricity, and then limited supply of raw materials as well as skilled labourers such as technicians and machine operators. “The raw materials we use come from petroleum waste. These raw materials are still not available in Africa. You cannot import labour and raw material at the same time,” Gaada quips. He notes that this is the right time for the country to educate its young people and also train them to work in industries. “We should do whatever it takes to train them in universities, colleges and in vocational training centres. There should be investments in the education sector,” he says. The Sahalpack CEO observes that it is easier to run a business in Somalia from Kenya, given the cordial relationship shared by the two nations.
“It is not hard if you have a productin Kenya and you want to sell it inSomalia and vice versa,” he stresses.Sahalpack products are mainlytransported to Somalia by freight, asthere are more airlines which play theNairobi-Mogadishu route daily.Gaada further points out that doingbusiness in East Africa has greatlyimproved, as most products areprocessed and countries within theregion do not have to import valueaddition materials.
“Somalia is part of East Africa and business in the region is growing. We find that most products go through value addition and they are used here. Technology has also improved. Local companies provide plate making, shafts, cylinders, die cutters, ink and so many other machinery inputs,” he says, stressing his view that the East Africa Community (EAC) should open up to Somalia. His argument is that the regional body should help revive business in Somalia so that the countries can fully operate as block. The businessman points out that Somalia is growing at a fast rate economically and credits the Somalis living in the diaspora for contributing to this growth.
Vibrant business environment
They have returned into the country from the US, Saudi Arabia, Sweden and they are rebuilding the nation. Gaada observes that even though the Somali population is not as big as most of her neighbours, the purchasing power of the Somalis is very high, creating a vibrant business environment. The small industries in Somalia are also growing, which is clear sign that the business environment is improving. Gaada, who lived in Sweden for 20 years, has also run businesses in Malawi, Tanzania, Zambia, and Congo before settling in Kenya.
According to him, Somalia has a lot of honey and nuts, which need to be properly packaged. The business he is engaged in is an art that gives people the power to sell products at better prices through value addition. “A lot of agricultural and other products need to be redefined, packaged and sent abroad,” he notes. Besides supplying companies in Somalia with labels, Sahalpack also advices them on the choice of colours, designs, how to package their products and other marketing aspects.
The CEO observes that the beverage industry in Somalia is growing fast. At the moment there are almost 17 companies that package drinking water. There are also mini-markets in Mogadishu and Hargeisa. These have a high demand for well packaged goods. The more shopping infrastructure and culture get established, the more brands and packaging become significant. The big challenge for Gaada is thus poor infrastructure in Somalia. “The cost of electricity,” he says, “is a nightmare.” The cost of a Kilowatt is close to one US dollar.
It is about dedication
Gaada, an avid reader, says he has over the years learnt that managing a business does not necessarily require a university degree. “People think you learn management from universities. Steve Jobs (the late Apple CEO) was leading one of the biggest companies in the world without a degree. It is about dedication and how you handle people,” he observes. The latest books he has read are: Steve Jobs Biography, and The World is Flat, by Thomas Friedman. Somalia has a lot of enterprising and globally experienced people like Gaada, an asset that the country will have to rely on in rebuilding.