Tribert Rujugiro Ayabatwa is Africa’s Number 1 Tobacco man. The 73 year-old Rwandese industrialist is the founder and controlling shareholder of Pan African Tobacco Group (PTG), the continent’s largest indigenous manufacturer of tobacco products. PTG manufactures cigarettes in 9 African countries including Nigeria, Angola, Burundi, the Democratic Republic of Congo, Tanzania and the United Arab Emirates. PTG is the most formidable competitor to the international tobacco giants, Altria and British American Tobacco on the continent. The company employs over 20,000 people and has annual revenues of over $250 million. Ayabatwa has a personal fortune estimated at about $200 million.
Ayabatwa recently spoke to me, recounting his early days in business and his entry into the tobacco business, musing about his one failure and highlighting the work of his charity in grooming and supporting young African business leaders.
You had a difficult childhood experience. Your mother died when you were 12, and you were expelled from school when you were in the 8th grade. You later went into exile as a Rwandan refugee in Burundi. That must have been tough. Tell me about it.
My early life experiences as a boy and young adult can be described as “hard knocks” referring to hardship, adversity and disappointments I experienced at tender age. After losing my mother, the church and colonial authorities that controlled Rwanda’s education system expelled me during my eighth grade when I was 16 years. That is how my academic future ended prematurely. With colonial authorities dividing Rwandans on ethnic lines of Hutu and Tutsi, and intent on discriminating against the latter to which I belonged, I saw no future in my country. Leaving my family behind, I went into exile as a refugee at the age of 19. That is the background to my moving to neighboring Burundi to try my luck there.
In 1960 you secured your first job as a clerk in the Regional Post office of Rwanda-Burundi. How was the job?
After moving to Burundi, I landed a job as a clerk/typist in the regional Post Office that served Rwanda and Burundi. I loved my new career and I worked very hard at it. I quickly learnt on the job and even excelled under supportive managers and supervisors. Soon I was training future post office officials that were to take over from the departing colonial managers as Burundi and Rwanda were now independent states. The Post Office gave me a strong foundation for organising and managing people and other resources. In my determination to improve myself, I spent most evenings at the Alliance Francaise learning French, the dominant working language. Soon, I was proficient enough that I began teaching French to fellow Rwandan refugees. This experience taught me early in life the importance of community solidarity and helping others.
At what age/year did you start your first business? What was it, and what inspired your business decision?
To understand what inspired me as a young man to go into business, we have to go back into my career at the Post Office and what followed. Once in the Post Office employment, another problem soon emerged. While in Rwanda, my path to education was shut down by the colonial administration that favoured members of the Hutu community, the route to public sector work was slowly shut in Burundi as the country gave preference to its indigenous nationals. These early challenges in Rwanda and Burundi stand out for me. Refusing to be kept down, I had to confront various forms of discrimination by colonial authorities who prevented my pursuit of education in my native country and preference of citizens in public sector employment in my host country. These realities forced me to look for other options. Venturing into the private sector, I managed to secure a job in a petroleum-storage company with an absentee employer. At the age of 22, I rose quickly to the highest ranks. I had to rise to the challenge by, among other things, strengthening my management skills that I soon put to my own use. My savings while still in this particular employment enabled me to experiment with own entrepreneurial ideas for the first time, buying a pickup truck, hiring a driver, and transporting people and goods.
Give me an overview of the other businesses you started out as a young man. Which of them was the most exciting and why?
When I realised that I could support my family much more easily by making more money as part time businessman, it made no sense holding an 8-5 job. In less than a decade in private sector employment, at 29, I saw an opportunity to enter the business world on a full time basis, beginning with a bakery business after quitting transport. I started importing wheat, flour and salt. When conflict and armed clashes along the border with Tanzania stopped my salt imports, I found alternative routes through and around rebel-held areas. This is how I helped to end salt shortage in Burundi an achievement that earned me an exclusive salt-trading license — and the moniker “King of Salt.” Which of these businesses was most exciting? I would say each of them was exciting to me as a young man gaining experience and understanding roles and challenges of entrepreneurship. Each of these efforts was a building block to gaining capacity and leadership to develop, organize and manage an enterprise. Each venture had its own risks and profit margins — and lessons to teach me in my formative years as an emerging businessman.
You failed in an unsuccessful GOLD TRADING
My failure at GOLD TRADING
In 1974, you started importing cigarettes to Burundi from Tanzania. I am curious – of all the business opportunities out there, why did you settle for cigarettes? What was the attraction; what was the opportunity?
The early 1970s is the period when I saw another opportunity, namely the importation of cigarettes to Burundi from Tanzania. Cigarette trading became my main focus due to keen observation – I was at this time experimenting with various commodities that appeared to have mass appeal, such as wheat, flour, salt and cigarettes. By 1974, cigarettes were out-selling other items, a push factor that made me pay attention and eventually persuaded me in 1978 to begin manufacturing the product locally as opposed to importing. My transition from trading to manufacturing tobacco products was facilitated by a combination of factors. First, importation was adversely affected by unreliability of supply due to either poor infrastructure or political instability in the region making trade at times difficult if not impossible. Second, I had built an excellent relationship with Tanzanian suppliers who exposed me to manufacturing principles and encouraged me to start my own manufacturing venture. At first, the possibility of manufacturing seemed far-fetched given that making cigarettes is a highly capital-intensive process dominated by a handful of multinational corporations. Looking back, it was a daring step to even think about it let alone enter manufacturing. Some people thought I was crazy to think an African could manufacture products. But I did. I took the risk and it soon paid off, beginning with my original Burundi enterprise soon followed by the second venture, namely, my enterprise in the Democratic Republic of Congo (then Zaire). In Burundi, my work was seen as a model for delivering development and jobs to rural areas after I introduced a growers’ program to supply my factory. Unusual events in Burundi, however, were soon to unexpectedly turn my business upside down. A coup d’etat brought into power a new military ruler, Pierre Buyoya, who nationalised my cigarette business and imprisoned me in 1987 on the false charges that I was in partnership with the overthrown government. After three years in prison, with help from both inside and outside that involved a daring night-time escape, I ultimately fled to South Africa, where I moved my family and established my corporate headquarters in 1990. Seizure of my business proved to be an immense opportunity in that it expanded my horizon by forcing me to locate and operate in Africa’s most developed and challenging economy — South Africa. If I could compete in South Africa I would succeed anywhere on our continent and even beyond. That is how we entered the big league and became a Pan African operation with presence in the Middle East.
What eventually happened to your business in Burundi, and have you experienced other hostile asset takeovers in Africa?
There was a happy ending in the Burundi case. The government later reversed itself and returned my business intact which still thrives to this day. With regards to doing business in Africa, the continent has been conducive to my work and I am most thankful for that. I believe in Africa and I am unreservedly committed to its social and economic transformation. I have excellent relations with African governments and we continuously expand where and when opportunities arise. Case in point is our recent investment in northern Uganda valued at $20million aimed at increasing input supplies from within Africa. There are, however, occasional misunderstandings, such as the recent seizure of my flagship shopping complex, the $20million Union Trade Centre (UTC) by Rwandan authorities. The Rwanda government falsely claims that the shopping mall is “an abandoned property” because I, the majority shareholder, reside outside the country. How a modern, well-managed commercial hub in the city centre of the Rwandan Capital, Kigali, with 81 leading businesses operating in it, and employing over 400 workers can be classified as “abandoned” is beyond belief. The biggest loser in this illegal and uncompensated seizure is unfortunately the country whose leaders are in effect telling the world that Rwanda is high risk for investors. But I am sure even in Rwanda it is a matter of time for reason and decency to prevail.
You’ve made an enormous amount of money in all your years of doing business. How are you giving it back?
I have recently established the Tribert Rujugiro Ayabatwa (TRA) Foundation to assist me pursue my philanthropic work. The foundation will concentrate on helping those closest to my heart: African young people with drive and determination, who need a shot at opportunity and a little help for overcoming the odds — those who are in a similar situation to the one I faced as a young refugee. I have two main goals for this project at the outset: first, developing internship opportunities for African students to give them the practical, hands-on experience they need to succeed in today’s job market in engineering and technology. Second, providing mentoring and venture capital to budding African entrepreneurs so they can pursue their business development goals. The countries in which we do business are a priority in this regard. I should note that the TRA Foundation is the logical extension of my lifelong passion to promote African education, community development and business opportunity through philanthropic efforts, civic work and public service. Since my early days in Burundi, investing time and material resources in community development projects and youth education were my passion. More recently, between 2005 and 2012, we provided scholarships for 84 high school students and nearly 30 university students in my native country of Rwanda. In an effort to encourage business development, I helped establish the Rwandan Chamber of Commerce, serving as its first chairman. I also served as chairman of the Rwanda Investment and Export Promotion Agency and co-chairman of the Akagera Task Force, which was the driving force behind many of Rwanda’s economic reforms. In community development, I helped build a housing complex with about 100 homes for returning refugees after the 1994 genocide in Rwanda, when banks and commercial agencies were not yet operational. We presently contribute to various community improvement initiatives especially in countries where we operate. Whether providing electricity to 500 families near the Nshili Kivu tea plantation in Rwanda; donating cement to build new roads, a church and a football stadium in Burundi; or providing water and seedlings to farmers in Northern Uganda, I am committed to improving African lives. Through the TRA Foundation, I plan to keep thanking the people who helped me succeed through concrete deeds. In particular I hope to contribute to putting creative and innovative African youngsters on their own paths to success.