Philippe de Moerloose: "the big Belgian groups have vanished from Africa"

"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 Africa has 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 old vehicles. 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 red tape, but it still offers potential for growth.

LUC VAN DRIESSCHE

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 the distribution of cars, construction machinery and spare parts.

L'Echo, 17/10/2013, page 19: Philippe the African,115th largest fortune in Belgium

Philippe the African, 115th largest fortune in Belgium

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 ranks Philippe 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 equipment for 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 Moerloose appears 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 point for Philippe 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 in Bercuit, of which is the owner.

L.V.D.

LUC VAN DRIESSCHE

Philippe de Moerloose

Biography:

Philippe de Moerloose was born on 30 June 1967, in Watermael-Boisfort, Belgium, but grew up in the Congolese province of Katanga. Philippe de Moerloose founded DEMIMPEX upon graduating from l’Ichec in 1991.

His activities were initially focused on the export of spare parts to Africa, but rapidly expanded to include sales of vehicles and industrial equipment. Today, the Consortium SDA-SDAI that Philippe de Moerloose founded has a consolidated adjusted turnover of some 500 million euros and employs over 2000 people.

Philippe de Moerloose is also active in the industry, hotel and airfreight sectors, strictly via the Belgian company Demavia.

Introduction:

1991 Creation of Demimpex (short for: "de Moerloose-Import-Export"), specialised in the sale and export of spare parts to Africa.

1995 Demimpex purchases "Vehicles Repair & Parts" (VRP), the leading Belgian company in the sale of 4x4 vehicles and spare parts abroad.

1996 Creation of the first subsidiary on the African continent: Demimpex Afrique.

1999 Acquisition of Transco, a Belgian competitor of Demimpex-VRP based in Antwerp.

2000 Creation of the bonded logistics centre (Pre Delivery Organisation) in Antwerp with a capacity for 2,500 vehicles.

2001 Acquisition of "Auto Transport Company"(ATC) in the Belgian Group Chanic. This acquisition allows the Group to officially distribute the Nissan brand in RDC.

2004 Joint venture ATC Comafrique with the Group SIFCOM allowing the distribution of the brands Nissan, Volkswagen, Audi and Budget Rent A Car in Côte d’Ivoire. Creation of a Belgian-Algerian joint venture, Demdistral, for the distribution of the brands Hitachi and John Deere in Algeria.

2005 Creation of Demimpex Middle East in the Dubai free zone.

2008 Creation of the holding under Belgian law, Société de Distribution Africaine (SDA), allowing consolidation of all of the interests acquired to date.

2010 Launch of SDA Asia, a base for the Group in China

2011 Development of the network SMT (Swedish Machinery & Trucks), official distributor of Volvo Construction Equipment, Volvo Trucks and Volvo Penta, in Cameroon, Congo Brazzaville, Côte d’Ivoire, Nigeria and RDC. Demimpex is split into two companies: Demimpex Motors and Demimpex Equipment.

Creation of DEM Equipment in RDC.

Creation of SDIAG for the distribution of John Deere Agriculture agricultural equipment.

Automotive activities are added to the joint venture TRACTAFRIC MOTORS CORPORATION. This company is the second leading player in sub-Saharan Africa in the automotive sector and is owned for 60% by the Group Optorg and for 40% by the Group SDA.

Purchase and integration of the Multitech group (official distributor of Volvo in Ghana, Burkina Faso, Benin and Liberia) into the SMT network.

2012 Establishment of management committees within SDA, Demimpex Equipment and SMT Europe.

Creation of the holding under Luxembourg law SDAI, encompassing the interests SDIAG and CBA Trading (formerly SDA Asia).

2013 Creation of the sub-holding SMT Group by adding the subsidiaries owned in Africa.

Creation of the sub-holding DEM Group by adding the DEM Equipment subsidiaries owned in Africa.

Reinforcement of the DEM Group network through the creation of the subsidiaries DEM Ghana, DEM Mauritanie, DEM Maroc, DEM Nigeria and DEM Sénégal.

Hobbies :

A fan of marathon running and endurance sports, Philippe de Moerloose has completed numerous races including the Paris, Brussels, Barcelona and New York marathons. He also enjoys tennis, and has been an outstanding player for many years. These physical challenges demand qualities such as surpassing oneself, mutual support and endurance. This is a reflection of the energy and the capacity "to push the limits" that characterises Philippe de Moerloose in both his athletic and professional endeavours.

A man deeply committed to Africa (Source : “L’Eventail” Magazine).

Our guide to the extraordinary career of Philippe de Moerloose is Michaël Delvaux, a close friend from the start and a key figure in the structures of SDA and SDAI, who tells us about the small SME that has grown into a holding currently rivalling the big names in international distribution.

At the head of the holdings SDA and SDAI, in over 20 years, Philippe de Moerloose has developed a Group of companies with a presence in 27 countries and three main sectors of activity: the distribution of cars, the distribution of construction equipment, mining and forestry machinery and the distribution of agricultural tractors.

Focused chiefly on Africa, Philippe de Moerloose was able to seize the opportunities offered by the continent in order to transform them into an exceptional business. SDA encompasses companies active in the exclusive representation of automobiles and machinery in Africa.

More broadly, the consortium SDA/SDAI (2008/2012) offers a full range of high-quality products and solutions and above all, after sales service on a par with any European network. The investments in structures to meet the international needs of manufacturers and the recruitment of talented staff have been the keys to their success. But even more than his thorough knowledge of Africa gained over his two decades on the continent, it is Philippe de Moerloose 's capacity to pass on his knowledge that has made the consortium a true asset for its partners, clients and suppliers.

The start of an adventure

After spending his youth in Katanga, Philippe de Moerloose was sent to Belgium for his university studies. But it was with a certain apprehension that he landed in his country of origin, and he immediately missed Africa. A people-person and above all, culturally African, Philippe de Moerloose was determined to return to Zaire after having benefited from all that Belgium had to offer. After all, his heart was in Africa.

In 1991, at the age of 23, Philippe de Moerloose founded a cooperative company that he named Demimpex (an acronym for de Moerloose Import Export), specialising in services in the import-export of spare cars parts between Belgium and Zaire, Rwanda and Burundi. No market study, no business plan, but three reasons, each of which alone would be enough: to provide service to the people he had met during his summer jobs in the mines of Katanga, a consuming passion for cars, and the intuition that there would be a demand that could be filled by a serious, resourceful and hard-working entrepreneur, and through which could earn a living. Service, intuition, passion and hard work became the foundations for his success. And it is no accident that these elements are inseparable from Africa, where the custom of sharing generously with the community, the value of hard work and the uncertainty of what the next day may bring are characteristic aspects of the culture.

Between 1995 and 2010, the dream was realised with accelerating growth for the company thanks to numerous takeovers. These acquisitions helped to expand the activities, allowing collaboration with teams from highly diverse backgrounds, and to grow the group by gaining representation in Africa for many leading brands (such as Nissan, Mercedes, Volkswagen, Ford…) as well as for industrial equipment (such as John Deere, Hitachi, Volvo Construction Equipment and Volvo Trucks). More than just takeovers, Philippe de Moerloose was also acquiring know-how and thus gradually building an invaluable network; he would be able to use it to optimise sales and to expand the structure in order to offer his clients the service he believes they deserve: “the same kind of service that your average person receives in Europe.”

A growing success

Philippe de Moerloose quickly built up a clientele among mining companies, commercial companies, transport companies and African governments. On the basis of this success, he could have simply stopped there. But it wasn't in his nature: he can't abide failure, or waste, and sees the debacles and abandoned projects of others as opportunities and ideas that simply haven't been implemented properly. For a decade now, Philippe de Moerloose has specialised in overhauling and restoring to profitability companies that have got into trouble due to poor management or lack of persistence. “You can reach a goal when you have a clear one, and through hard work”, he exhorts his teams. In this way, Philippe de Moerloose was able to create his hotel and industrial activities by taking over assets that others did not have the dedication to make profitable.

A man of strong intuition, Philippe de Moerloose also added a new link to his group, given the constant demand and the results achieved: in fact, he created logistical platforms in Dubai and Antwerp as well as in China. These are all part of a commercial strategy to focus on the idea of services. Some are resigned to losing ground against the commercial power of China or the Middle East. For his part, Philippe de Moerloose is investing to learn and to turn a profit just like he did as a young student in Belgium.

Understanding his client's needs and meeting them remain his sole obsessions. With slim margins and fierce competition, the strength of the consortium is in the availability and the large stock of vehicles and machines. Thus, instead of delivery from the factory in 2 to 3 months, the company is able to deliver in 3 or 4 weeks. He has large warehouses that allow him to store 2500 vehicles and machines; the same applies for the spare parts. Currently the group has a workforce of nearly 3,000 employees around the world and has experienced growth of between 15 and 20 % annually over the past decade.

Humility in the face of a complex market

Whilst success can be disorienting for some, Philippe remains a discreet man with a low profile who doesn't enjoy flattery. He retains his outspoken taste for challenges, for surpassing himself and his profound commitment to the African continent. He is fluent in Swahili and more than ever he feels at home expressing himself in this language.

After all, Africa is a difficult continent in which to work if you are not African. It takes patience and you need to approach people with an understanding of their culture, without losing your own personality. Africa sometimes frightens away Western investors, particularly because the press generally refers only to the political instability, war or questionable business practices. “It's a very simplistic image transmitted by certain media", he notes. Africa is an extraordinary growth zone with many opportunities in all sectors, particularly in infrastructure, agriculture and services. It has a young population full of energy and talent who only need benevolent leadership and the means to express themselves. This is my credo and my profound conviction. That is why I am confident, and why I make these investments. The business world in Africa is changing for the better. And it's thanks to this that we are able to fully realise our goals. The successful companies are those who create value, not those who confiscate it.”

Never one to resist a challenge, but has Philippe de Moerloose achieved his goal? It matters little. This true businessman is always looking for more. Not simply for himself, but for his 3000 employees and his clients. With the help of experience, he has learned that the tide can shift and the market moves very rapidly. He has seen companies go under for good, or unable to recover. He has purchased some of them. Starting from scratch to become an established name in the market today, as a company that is successful, loyal and acknowledged by its clients, employees and suppliers was never a goal in and of itself; but it has become a point of pride. Today, the caption of industry has a nostalgia for the days when he discovered the mines during summer jobs and the period when, although he was the boss of the SME, above all, he was an outstanding salesman. Already at a young age, Philippe de Moerloose gained this talent which became the other invaluable secret of his group: his capacity to organise dedicated management committees, competent in their jobs, allowing each member, male or female, to develop the qualities of vision, strategy, and perseverance necessary for the group to emerge.

Few people are able to convey their qualities to their teams, but those who manage to do it no doubt reap more rewards than all the dividends in the world. At a time when financial holdings are under fire for their short-term vision, Philippe de Moerloose would like to prove, with the help of Africa, that it is still possible to reconcile financial goals on the medium-term with long-term industrial goals. He can scarcely believe it himself but in our opinion, he is an example of the entrepreneurial model of the future.