Dr. Sudhir Ruparelia is the founder and Chairman of the Ruparelia Group, one of Uganda’s largest business conglomerates with investments in financial services, real estate, education, hospitality, agriculture and broadcasting. He is also arguably Uganda’s richest businessman. CEO East Africa’s Muhereza Kyamutetera sat down with him for take on various business issues.
A number of analysts have made different takes on the economy and where it is headed. Being one of Uganda’s largest players in the economy should give you a better and more grounded take on the economy; what are your thoughts on our economy today?
Two – three years ago, things were quite tough; am sure you have seen that the economy grew by about 2.5% in 2016 but recovered in 2017 and 2018 to grow at about 5% and 6% for 2017 and 2018 respectively, according to figures from ministry of finance and IMF.
I also know that the Central Bank eased down on its monetary policy and as such, commercial banks have responded generally by cutting interest rates and increasing lending. I can say the situation has improved and the private sector is more optimistic than it was 2 years ago. I also believe there is room to even improve that by further easing down on interest rates, so the economy can recover fully.
We hope in the next budget, this June, the ministry of finance can announce further measures to further stimulate the economy.
Specifically for the Ruparelia Group, would you say the last 1-2 years have been good?
As you know, we are a multi-sectoral entity- so some sectors have done better than the others- but across the board I can say things are looking up.
First of all I must say that as a group we are confident in this economy which is why we continue to invest and reinvest in Uganda. Whatever challenges there are, we have come to accept that, that is the nature of business. There is no economy without challenges; so we just have to learn how to navigate around them and wake up each day with the hope and optimism that things will get better.
From the hospitality front we recently added a number of investments- we completed Speke Apartments at Wampewo, in early 2018 as well as completed the remodeling of Speke Resort Hotel in Munyonyo, creating 45 world-class suites for both long and short stays.
We also recently completed Speke Apartments, Kitante- a set of 83 one and two-bedroom fully furnished apartments. We also in the year announced plans to construct a one of a kind Speke Resort and Convention Centre, Entebbe- a trail blazing hotel, with a marina and convention centre that will fully transform Entebbe town.
We also recently completed renovations at Kabira Country Club.
Our efforts were also rewarded with major global and local recognition. Other than hosting major global and local events and conventions, group hotels won several awards.
Recently Commonwealth Resort Munyonyo and Speke Resort Munyonyo won the coveted 2018 World Luxury Hotel Awards regional and country categories respectively. Speke Resort was also awarded the 2018 “Certificate of Excellence” by Trip Advisor for the fourth consecutive time since 2015.
We also got recognition from Africa’s 8th richest man, Mr. Strive Masiyiwa who said Speke Resort Munyonyo and the adjoining Commonwealth Resort should be named the “the official African Conference Centre” for its “amazing” beauty and unique meetings, incentives, conferencing, exhibitions (MICE) solutions.
Speke Resort Munyonyo was also recognized as the best Service and Luxury Business Hotel – in the Ekkula Pearl of Africa Tourism Awards, where I was also recognised as a Lifetime Tourism Achiever.
We are humbled by all these recognitions; they are surely an inspiration to do better each day for the group but also do our country Uganda proud, because as a group, we can only be as successful as the nation where we are domiciled.
On the education front, Kampala Parents School had all its 234 pupils who sat the 2018 Primary Leaving Exams passing in first grade. We believe, this was driven by the group’s $7 million facelift, expansion and re-equipping of the school.
In real estate, we had many major milestones- but the biggest and most iconic is the completion of the Kingdom Kampala Mall; an ultra-modern mixed-use Grade A property- a blend of 4,000m2 of retail and 18,000m2 of office space, 4,000m2 of retail as well as parking for up to 450 cars.
These are some of the more monumental successes by the group and we thank all our staff and customers for their individual input- we are what we are because of them.
In 2016, BoU of Uganda closed Crane Bank, one of the group’s iconic businesses- a development that many people thought would mark the beginning of the end of the Ruparelia Group. How did the closure of Crane Bank impact the group?
As you are aware, we are in court contesting what we believe was an unjustified closure of our bank, but also the rushed, negligent and fraudulent manner in which it was closed. So there is only much we can say at this moment as the matter is sub judice.
However, our claims have so far been proven by the findings of the Auditor General and Parliament’s Commissions, Statutory Authorities and State Enterprises (COSASE) who found out that the closure of Crane Bank and 6 other banks before that, breached several provisions of the Financial Institutions Act (2004) and was therefore illegal.
That said, as a Group, we are determined to defend both our integrity and that which belongs to us. We are also determined to expose the wrong doing by some of these entities that were involved in the fraudulent and illegal closures- because we know that it is not only us who were affected but many other Ugandans.
Many analysts have told of a real estate bubble coming soon- yet we see continued investment in the sector. As largest developer of commercial and residential space in Uganda, what’s your take on investing in real estate? Is it still viable?
Every sector has its highs and lows but like most other entrepreneurs have said before, if you want to invest, you need to go mainly for the basics of life i.e. food, shelter, clothing etc. These seem to have infinite demand.
Therefore, real estate, even with its highs and lows is a good sector to invest in with average 8%-12% returns on investment- as long as you get the fundamental right.
The construction & real estate sector, continues to attract a lot of attention from the banking sector- accounting for over 20% of all private sector credit- in fact it is the biggest recipient of private sector credit, followed by the trade sector.
Most of this money is being directed to the demand side- 70 percent of all lending goes to financing residential and commercial mortgages, an indicator that demand is there.
Industry and group insights show, occupancy rates of above 80% for Grade A and B office space in Kampala and above 70% for warehouses. Residential occupancy rates in both the upscale suburbs and metropolitan suburbs also remain above 80%. If the projections of 6% growth in the coming years, come to pass- the sector should remain vibrant.
That said, the key tenets in the business remain: location and quality. That is the hallmark of the business if you want to make it big.
What are your parting shots? What advice would you like to give to Ugandans especially entrepreneurs?
I would like to tell especially the youths and the young entrepreneurs to get down and get their hands dirty.
Uganda, like every other country has its own challenges and opportunities; but the future belongs to those who go after the opportunities not the ones that are always whining about the challenges.
Government has invested significantly in roads, electricity generation and distribution- which are all factors of production. It is now up to us as Ugandans to put in our all and make the best use of these, all the challenges regardless.
The youth of today are blessed to be born in the era of the internet- there is boundless opportunities there.
Lastly, I would like to urge government to work towards closing the long awaited oil & gas opportunities. Many investors have made projections and investments based on that opportunity, the longer it takes to materialize the more these investors will be hard pressed.
I also expect government will pay more focus on settling its domestic creditors, as this could add more pulse to the economy.
Meet Paddy Muramiirah, the man spearheading Crown Beverages’ aggressive comeback
Engineers; Mechanical Engineers at that, rarely make it to the top leadership levels, unless of course it is an engineering firm.
For brands in the Fast Moving Consumer Goods (FMCG) categories such as soft drinks or alcohol where the flamboyance and exuberance of the brands is one and the same with that of the brand guardians, the top jobs have often been reserved for marketers and sales people and every once in a while, CEOs with a finance background.
Not that there is anything wrong with the Engineers, but somehow, since the marketers are already customer facing, it is easy to keep it that way. In fact one, can in Jesus’ speak say, it is easier for a camel to go through the eye of a needle than for an engineer to become a star-performing CEO of an FMCG brand.
Such was the mythical pessimism that greeted Crown Beverages’ Paddy Muramiirah, when he was appointed Chief Executive Officer in November 2016.
But Amos Nzeyi, the Executive Chairman and one of the company’s shareholders, knew better. While announcing Muramiirah’s appointment then, he said, that he had emerged the best from a number of applicants because of his “his leadership, immense experience and knowledge” in the carbonated soft drinks industry as well as his “strong track record.”
“Mr. Muramiirah has demonstrated throughout his career the ability to work successfully, designing and leading strategies which resulted in impressive value creation. And given his credentials, I am certain he will make a significant contribution to the role and create the next chapter of CBL’s story of success; Mr. Nzeyi said.
Creating value and the next chapter of CBL’s story of success
Muramiirah, a Mechanical Engineer by training, joined CBL in 2005 as the head of operations and rose through the ranks. He has also overseen the company’s aggressive production expansion throughout the years.
At the time Muramiirah becme CEO, CBL was year in, year out, losing ground to their archrivals, Century Bottling Company Limited the bottlers of Coca Cola. For example between 2013 and 2016, while Crown Beverages’ Compounded Annual Growth Rate (CAGR) in sales turnover was 4%, Century Bottling was growing at an average 6%, thus widening the space and share of wallet gaps between the 2 cola archrivals who between them control an estimate 80% of the soda market in Uganda.
In 2013, while Century Bottling sold UGX302 billion worth of drinks, Crown Beverages sold UGX195.4 billion- a variance of UGX106.6 billion. Century made a UGX13 billion profit, while Crown made UGX15.4 billion. In 2014, the sales turnover gap widened to UGX115.1 billion, as Century sold UGX346.4 billion and Crown Beverages UGX231.3 billion. Both companies made UGX7.3bn in profit.
In 2015, Century sold UGX384.3bn while Crown turned over UGX240 billion- widening the market share gap by UGX144.3 billion. That year Crown made a trifle UGX 100 million in profit, while Century made a handsome UGX20.2 billion in net revenue- their highest in recent history, if not the highest ever!
In 2016, the year Muramiirah was appointed CEO, both companies slowed down in turnover- Century by .23% to UGX383.4 billion and Crown Beverages by 4.7% to UGX228.7- creating an even wider gap between the two companies’ sales turnover of UGX154.7 billion- the highest ever in the companies’ history in Uganda.
Crown however made a profit of UGX9.11 billion and Century UGX2.5bn.
Within the first few weeks on the job, Muramiirah oversaw the company’s biggest shakeup, letting go of several senior managers and went on to shock naysayers, by making a 28% come back in 2017 sales turnover to UGX291.8 billion while Coca Cola’s only grew 3% from UGX383.4 billion to UGX394.5- reducing the gap between the 2 companies from UGX154.7bn to UGX 102.7bn- the lowest in 5 years.
Profit also grew by 69% from UGX9.1bn to UGX15.4 billion. Coca Cola on the other hand had profits turn to losses- from a profit of UGX2.5bn in 2016 to a loss of UGX800 million.
2018 saw yet another good year for Crown Beverages- a 19% growth in turnover, from UGX291.8 billion in 2017 to UGX347.9 billion. Century on the other hand grew by 8% from UGX394.5bn to UGX426.7bn and as a result the gap between the 2 rivals further shrunk, this time to UGX78.8bn- a historic low in over 5 years.
Crown Beverages also had, their most profitable year to date- UGX29.3 billion in profit, up 90.3% from the previous year.
Thanks to this great performance, in June, 2019, the company won the PepsiCo Europe and Sub-Saharan African (ESSA) Bottler of the Year 2018 award. The company was also named the 1st Runner Up for the global PepsiCo Bottler of the Year award, beating over 200 other PepsiCo bottlers from all over the world.
Speaking at the ceremony to mark the milestones, Mr. Amos Nzeyi, the Chairman CBL commended the company’s customers, staff, shareholders, partners and the government for their contribution to the success.
“The journey has just started,” Mr. Nzeyi notified whoever cared to listen.
About Crown Beverages
Crown Beverages’ is a franchisee bottler for PepsiCo Inc. in Uganda that bottles a range of carbonated soft drinks that include: Pepsi, Mountain Dew, Mirinda Fruity, Mirinda Orange, Mirinda Pineapple, Mirinda Green Apple, 7UP and Evervess Tonic. The products are available in returnable glass bottles and plastic/PET bottles.
They also bottle Nivana water in four variants namely; Tangerine, Strawberry, Still and Sparkling.
The company is 100% Ugandan owned; by Amos Nzeyi, Chris Kayoboke and Prof Maggie Kigozi, who in 1997 bought a 51% stake from South Africa’s International Pepsi-Cola Bottler Investments and in 2001, acquired the remaining 49%.
The shareholders have since invested over $200 million (Ugx740 billion) in the business to date, creating the company into one of Uganda’s top 20 taxpayers. According to Muramiirah in a recent media interview, the company has between 2013 and 2018 paid a total of UGX284 billion in taxes.
Orient Bank’s Julius Kakeeto to head Post Bank
Julius Kakeeto, formerly Orient Bank Managing Director and Chief Executive Officer, is set to head the troubled Post Bank, CEO East Africa Magazine has learnt.
Kakeeto is to replace troubled Managing Director, Steven Mukweli who is facing corruption charges at the Anti-Corruption Court. Mukweli along with 7 other senior officials at the government owned Post Bank were charged with abuse of office, causing financial loss and conspiracy to defraud their employer.
The officers are: Safina Wabuna, the Executive Director for Information and Communication Technology (ICT), David Mwesige, the Head of Information Technology, Augustine Kisitu, the Head of Business Technology and Emmanuel Mwaka, the Finance Manager. Also charged are: Alex Kayaayo (Executive Director for Credit and Business Growth), Fred Samuel Wasike (Head of Business Growth) and Gilbert Nuwamanya (Sales Manager).
CEO East Africa Magazine, understands that Kakeeto has already sent in this resignation at Orient Bank and a farewell message to staff and is serving his notice period.
A highly placed source at Ministry of Finance, Planning and Economic Development, under whose docket Post Bank falls, also confirmed to CEO East Africa Magazine that indeed Kakeeto is crossing over to Post Bank.
“Off the record, I can confirm that his name has been submitted to Bank of Uganda for approval,” said the source.
Section 54 of the Financial Institutions Act (2004) requires all bank board directors to undergo a fit and proper test, carried out by the Central Bank.
Who is Julius Kakeeto?
Little is known about the largely press-shy Kakeeto, but according to research done by this publication, he wields more than 19 years in banking.
The Alliance Manchester Business School (MBA, Finance) and Strathmore University (ACCA) alumni started his banking career at the Citi Group in London in September 2001 and rose to the VP Global Markets position in London before returning home as Finance Director at Equity Bank in September 2009, a role he did till May 2011 when he moved on to become Director of Business Development at Orient Bank. Betweeen October 2013 and July 2014, he briefly served as the Executive Director before being appointed substantive Managing Director in July 2014- a role he has served for 5 years and 2 months.
During his 5 years at the helm of Orient Bank, deposits grew by over 59% from the UGX388.1 billion he inherited to UGX618 billion by close of December 2018- a compounded annual growth rate of 10%. Lending grew by 147.5% over the 5 years from UGX135 billion in 2014 to UGX334.1 billion at end of 2018- an annual growth rate of 201%. Total bank asset book also grew by about 56% from UGX480.8 billion to UGX750 billion at end of 2019.
As a result he managed to turnaround the UGX13.3 billion losses he inherited in 2014, making a profit of UGX1.5 billion in 2015, UGX5.8 billion in 2016, UGX4.8 billion in 2017, closing 2018 with a UGX5.6 billion profit.
Little is known about his package at Post Bank but at Orient Bank, his monthly salary was a reported UGX44,580,000.
Geologist, Proscovia Nabbanja appointed as UNOC caretaker CEO
Proscovia Nabbanja, the Chief Operating Officer at the Uganda National Oil Company (UNOC) has been appointed by the board as the interim caretaker CEO.
Wholly owned by the Government of Uganda, UNOC is a limited liability company whose prime purpose is to handle the Government of Uganda’s commercial interests in the petroleum sector and to ensure that the resource is exploited in a sustainable manner.
Nabbanja steps into the shoes of Dr. Josephine Wapakabulo who resigned in May this year over- what she said was the need to focus on family and pursue new opportunities.
Some insiders however say although Dr. Wapakabulo was an engineer by background, with a PhD in Information Science from Loughborough University and a Global Executive MBA from the prestigious
Institut Européen d’Administration des affaires (European Institute of Business Administration) INSEAD, she was seen by many of the oil & gas experts at UNOC, many of whom were part and parcel of oil & gas story and history, as an outsider and imposed upon them by president Museveni.
This resistance could have fast-tracked her self-ejection.
Who is Nabbanja?
Nabbanja has been in the COO role at UNOC since November 2016.
Before that, she served as a geologist at the Petroleum Exploration Development and Production (PEPD) of Ministry of Energy for 15 years, rising to the level of Principal Geologist, a role she held between April 2015 and October 2016.
A holder of Bachelor of Science in Geology & Chemistry from Makerere University, Nabbanja also holds an Msc, Petroleum Geoscience from the Imperial College London as well as a Master of Business Administration (MBA) from the Imperial College Business School.
She also holds a Diploma in Management of Petroleum Operations and Development from PETRAD Norway.
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