DOING BUSINESS IN DJIBOUTI: INSIGHTS FROM REUBEN AHRONEE, CEO OF MASSIDA GROUP
Reuben was born in Djibouti, studied in San Diego CA and Paris. After starting a career in the luxury hotel industry, he worked as a consultant before becoming Massida Group CEO. He is a Beeleever and wanted to share his vision of Doing Business in Djibouti and Ethiopia.
The most important piece of advice he received in business:
“ -You are just as good as the people you surround yourself with.
To me, a CEO needs to be a visionary who puts his team in a position to succeed in their respective roles, enabling them to thrive and perform.”
Hello Reuben and thank you for accepting our invitation! You are the CEO of Massida Group, a company based in the Horn of Africa and specialized in Logistics. Can you tell us its story?
Reuben: Massida Group was founded in Djibouti by André Massida, in 1964, specializing in logistics and personal effects moving services. It already had a prior presence in Saigon (Vietnam), but the company’s links with the French military created a great opportunity to open an office in Djibouti, where the French military also had a force of 5.000 men.
16 years ago, President Ismael Omar Guelleh had a vision of creating a safe regional hub out of Djibouti for investors to operate on the COMESA market, which offers access to 450 million people. His perseverance has put the country on the right track and important changes happened in Djibouti as it opened itself to the world. DP World invested into a new container port and free zone, several military bases such as American, Japanese and Italian were added to the existing French force, to combat piracy and terrorism. Since then, with a currency indexed to the US Dollar, the business environment has shifted from French to English speaking and Djibouti’s growth became exponential with the opening of 3 new port facilities, the first electric railway connecting Djibouti and Ethiopia over 1000km and the largest free zone in Africa under contruction.
In 2007 the market was evolving fast and Massida needed to be brought up to speed. With the help of consultants from EY, I audited the company and provided a report with recommendations to the company founder and owner André Massida. He then offered me the job of implementing all the suggestions I had made as a consultant. I accepted the offer and it was the beginning of the adventure that brought me to become Massida’s CEO.
How did Massida Group change since then?
The first step was to proceed with a full restructuring: HR, finance, marketing, renewal of fleet and equipment, processes, procedures and ERP implementation. No stone was left unturned. After two years of hard work, Massida had nothing to envy from most modern international operators. . The next step was to enter a growth phase with the launch of several businesses, to answer market and client needs revolving around supply chain.
Our first company opening was Massida Shipping, a maritime agency specialised in servicing military vessels with an all-around offer for vessels calling Djibouti port. Services include food provision to refueling, vehicle rentals, and travel arrangements. We now work with clients such as the US Navy, the Royal Navy, the Japanese Self Defense Navy and European vessels part of the Atlanta coalition force. Massida shipping also serves cargo and cruise ships.
Our next venture was a general trading and procurement company called Massida Smart Solutions (MSS), importing all sorts of goods from all over the world (i.e. cars, heavy vehicles, tires, motors, MRO, generators… ). MSS helps clients identify the right products for their requirements and delivers them to their door. MSS is also a marketing platform for international companies willing to penetrate the east African market. Brands such as Grainger, Manutan and Motorola use MSS to sell their products locally.
Our latest opening in Djibouti was Massida Express Service (MES) which represents FedEx and TNT express delivery services in Djibouti, working mostly with the American Military base.
Your Group has recently started expanding in Ethiopia, tell us about it
3 years ago, we decided to concentrate our efforts on opening in Ethiopia. You need to understand that it’s a market of 100 million potential customers who receive most of their goods through Djibouti because it’s the closest maritime port. In addition, Ethiopian labor is very competitive and attracts productions plants and factories from various sectors, generally relocating from from China and Turkey.
When it comes to logistics operations on the Djiboutian-Ethiopian corridor, a Djiboutian and an Ethiopian logistics operator will subcontract each other to perform respective local services for the same client. Massida was the first to offer logistics services in both Djibouti and Ethiopia, ensuring seamless quality service all along the way. Since we are also part of major transport and logistics international networks such as Panalpina, Ceva Logistics, JAS…, clients can benefit from a door-to-door service for all types of cargo to/from Ethiopia to any country in the world!
What would you say to someone contemplating to develop in the Horn of Africa?
First, it is not as dangerous as it sounds. It’s true that we’re surrounded by unstable countries such as Yemen, Somalia, Eritrea but Djibouti and Ethiopia are stable and safe countries developing at high speed! Respective governments work hard at improving the business environment and with the presence of foreign armies, security is not an issue: there are zero worries when out at night in the streets of the city center.
Second, at the present time, Djibouti and Ethiopia are growing exponentially, with an average 8 to 10% growth in GDP and approximately a half million people joining the middle class every year in Ethiopia. It’s a fast growing market, offering a lot of opportunities for domestic and international business operators.
Last, the Ethiopian government is launching vast projects of industrial parks with incentives to attract investors, with the objective of adding value to raw materials locally for domestic and export use. The service sector is limited to Ethiopian nationals, so foreign investors will require a local partner to operate. However rules and regulations change and more opportunities regularly appear.
What are your next projects ?
We realized that most of our customers were regionalizing and would often ask us if we cover other close-by territories. We want to be able to offer comprehensive services and become their sole interlocutor for regional logistics. So, our next step would be to regionalize too.
Thank you Reuben for your testimony! Would you be open for Beeleevers to connect with you ?
Yes of course, they can contact me whenever they want. We are always happy to provide advice and information to businessmen and businesswomen willing to develop in the Horn of Africa !
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