“Africa has always had a negative image, but it is currently experiencing growth at a rate of 7 or 8%.”Philippe de Moerloose
Interview : Luc Van Driessche
Philippe de Moerloose has been active in Africa since 1991. Demimpex, the cooperative company he founded that year has now grown into a vast holding encompassing a range of subsidiaries employing a total of 3,000 people (including 100 in Belgium), and present in 25 African countries. He sees room for other Belgian companies to get involved.
How did you to come to launch an economic activity in Africa?
I received my primary and secondary education in Lubumbashi. I then returned to Belgium to study at l’Ichec. The ARC but from a very young age, I always knew that whatever activity I would develop it would be focus on Africa.
Why have you not expanded into other regions around the globe?
Culturally and emotionally, I’m very attached to Africa. Between the ages of 3 and 18, I lived in DRC, which allowed me to develop close ties with this continent that is so magnificent and so fascinating, which offers such great potential for development.
Yet Africa is perceived as a continent lagging behind in development.
That’s true. Africa has always had this negative image, but it is currently experiencing growth at a rate of 7 to 8%. When people talk about Africa, it often is in reference to coups d’État or Civil Wars,yet there are so many great things happening there. It’s 22 years ago that we faced the challenge of deploying our activities is on the African continent. Today, we can only conclude that it was a good decision. The group has seen excellent growth whilst Europe and the United States are in crisis.
Is the resurgence of activity attracting foreign investors?
The image of Africahas changed. That’s because there is more increasingly talk of the crisis on other continents than at the moment in Africa. It’s first time in history that multinationals are investing by the billions. This was never the case in the past. During the previous decade, everyone went to Africa for short-term operations. There were a few international groups who, like us, chose to invest long-term on the African continent. Today, more and more American, Australian and South African international groups are investing in Africa, particularly in the mining sector.
Your activities were originally focused within the DRC. What share of your income does this country currently represent?
Less than 10% in distribution. At the moment we have a very good geographical diversification with the presence in 25 countries.
Do you plan on continuing with this diversification?
Yes. We would like to cover the entire continent. There are still many countries to discover, particularly in English-speaking Africa, especially in the east, staying within our main activity: distribution of cars, machinery for construction and agriculture. Distribution requires a lot of skill. The competition, especially from the Chinese, forces us to be experts in our field of activity.
What are your strengths compared to your competitors?
First of all, the knowledge of the continent and its culture. We also have highly effective logistics services and significant stocks in our three major storage platforms (Antwerp, Dubai and Shenzhen), which allows us to keep the delivery times to a minimum, which is very important. We also have efficient after sales services.
You’re also an automotive distributor. Is there are good market in Africa for new cars?
Second-hand cars mass is ancient history. Many countries now only permit the import of maximum 3 years oldvehicles. Africa is seeing the emergence of a middle-class who is able to invest in buying small cars. The banking world is also evolved. Up until about six or seven years ago, it was inconceivable to get a car loan in Africa. Now, the major banks on the continent all offer such credit, although the interest rate are definitely higher than in Europe.
Three years ago, you mentioned that you were sorry to see Belgian entrepreneurs leaving the Congo. Has this trend continued?
When I was a student in Congo, there were lots of Belgian groups there, whether it was in banking, industry, raw materials or construction. Now, I have to conclude that the major groups have vanished. Others have taken their place, particularly the Chinese, which have grown at a speed scarcely imaginable.
Do you think they have staked their claim?
It will be very difficult to recover the ground. These big companies are investing whilst Belgium is still organising exploration visits. Currently, I do not believe that the economic world in sub-Saharan Africa expects explorations. They are expecting direct action.
What niche activities could encourage Belgian companies to return to Africa?
Everything needs to be done on this continent: electricity, infrastructure, agriculture, distribution and maritime activities. It’s all about believing in it. It’s true that in Africa, these things are not easy to manage, but Belgians are highly adaptable. Africa has its limitations and its constraints, particularly the administrative redtape, but it still offers potential for growth.
Express
Active in Africa since 1991, the Belgian entrepreneur Philippe de Moerloose is calling for Belgian companies to invest in a continent experiencing a growth rate of 7 to 8%.
Having established a presence so far in 25 countries, his holding SDA aims to expand into English-speaking countries in East Africa.
Philippe de Moerloose has a target turnover of €1 billion in 2014. To achieve this, he is particularly counting on the growth of his activities in an thedistributionof cars, construction machinery and spare parts.
Philippe the African, 115thlargest fortune inBelgium
For the general public, Philippe de Moerloose is virtually an unknown. In Africa, he is a household name. This discreet entrepreneur has in fact, in the past 20 years, managed to transform a small import-export company – Demimpex -into a vast conglomerate, SDA, with a turnover of some 860 million euros. This ranksPhilippe de Moerloose in 115th place among the wealthiest Belgian, with a fortune of 94 million euros.
Having landed at the age of 3 in Lubumbashi (Katanga), where his father accepted a job as an accountant, Philippe de Moerloose would not return to Belgium for 18 more years when he came to pursue his higher education at l’Ichec. He already knew then that his passion for business would take shape in Africa.
Demimpex – “de Moerloose Import-Export” -was born in 1991. Its activity: exporting spare parts for cars to Zaire, Rwanda and Burundi. The company really took off four years later, with the purchase of VRP (Vehicle Repair Parts), a company specialised in the sale of major automobile brands and the on-site delivery of vehicles and equipment for industry and mining. Philippe de Moerloose in this way was able to create, in one fell swoop, a fast network that has allowed him to gradually expand in Western and Northern Africa. Today, the company distributes cars- Nissan, Ford, VW, Mercedes, Hyundai, Dacia -, heavy trucks – Volvo, Mercedes – and equipmentfor construction (Hitachi, John Deere) and agriculture (John Deere). His clientele is highly diverse: public works and civil engineering companies, mining companies transporters, public authorities …
The portfolio of SDA grew particularly in the 2000s. Currently, the appetite of Philippe de Moerlooseappears insatiable. He is moving into industrial activities – PVC tubes, steel structures, tanks, mining sub-contracting… – and purchased a security company that he restored to profitability before selling it in 2006 to G4S,at a tidy profit. He has also acquired two hotels in Congo, a country responsible for only 10% of his turnover at the moment but which remains one of the nerve centres for the group. And an anchor pointforPhilippe de Moerloose, whose ties with president Joseph Kabila and his entourage are publicly known.
Airline company
Very quickly, de Moerloose also realised that to reduce delivery times to the maximum extent, air transport would be indispensable. He launched his own company Demavia Airlines, which rents aeroplanes and flies cargo twice a week between Brussels and Kinshasa. It serves the subsidiaries of the group, but particularly the major names in air freight.
Philippe de Moerloose does not like to talk much about the issue of Hewa Bora, the Congolese company that was blacklisted in 2009,of which he was a shareholder-never a majority shareholder, he hastens to add-and which he directed in the 2000s. The joint-venture with Brussels Airlines planned in 2007 is long gone. For now, the airline division of SDA is limited to Demavia.
The number-one growth centre for SDA remains the distribution of vehicles,machinery and spare parts. Philippe de Moerloose would like to see his group’s turnover reach €1 billion starting from 2014. He is particularly setting his sights on East Africa and the Maghreb.
At age 46, Philippe de Moerloose spends a lot of his time on the African continent. But this doesn’t stop the father of three teens from closely following the youngsters at the school of the Tennis Club inBercuit, of which is the owner.