In just two generations, Egypt’s Mansour Group has developed into a $6bn empire. An Egyptian family firm now the country’s second largest by revenues, it has 60,000 staff working across 120 countries, and is growing at a rate of 10%–20% annually — not bad for a company operating in some of the harshest places and amid plenty of geopolitical turmoil.
Middle son Mohamed Mansour says growth has been in the company’s DNA since his father Loutfy founded it in the 1950s. At his office in London, Mansour illustrates his point with a story about a lunch meeting in 1996 with Don Fites, the then-chairman of Caterpillar — a brand the Mansour Group had acquired the distribution rights for in Egypt 20 years earlier.
Mansour recalls: “In 1996 we had a market share of about 60% in Egypt — so of every 10 machines that were sold, six were Caterpillar. I had lunch with the chairman Don Fites and told him; ‘If I want to grow with Caterpillar, okay I’m 60% today, what can I expect to be, 70%?’ So I said: ‘Listen, we’re very liquid in cash — what I can do with this money is either start to invest elsewhere or I can invest in your business.’”
Six months later he was offered Unatrac, Caterpillar’s Unilever business in Sub-Saharan Africa — a remote area at the time of which the Mansours had no knowledge. But in they went.
“A lot of people in my company said; ‘But Mr Mansour we know very little about Sub-Saharan Africa’. Egyptians by nature have always stuck to the Delta, around the Nile; we don’t travel much… I said ‘no, we’ll do it’, and we did it, and we’ve grown Caterpillar in Africa from a turnover of $170m in 1996 to $2bn today — so the growth has been phenomenal.”
His appetite for expansion whetted, Mansour signed his second contract just a short time later — this time for the rights to distribute Caterpillar equipment across Russia’s freezing and barely hospitable Siberian landscape.
“I pestered Don Fites again,” he says. “I said ‘what other territories do you have?’, and he came back and said, ‘okay, how about Russia?’”
At the time, Russia was still emerging from the oppressive communist era and the Mansour Group was more accustomed to 40°C temperatures than the –40°C lows in Siberia. Again, his advisors warned against the investment.
“When we went into Russia they were projecting we would lose $5m a year for five years, because at that time, the market didn’t buy Caterpillar equipment; they only bought Russian and cheap Chinese models,” Mansour recalls.
“Why did I say ‘okay, we’ll do it’? Because they have 30% of the world’s gas reserves — so if it’s not happening now, it will happen. And the first year we started selling equipment and then we started making money.
“The area that we cover in Russia is actually larger than the continent of Europe and the potential is also huge,” he adds, extending his index finger across a large swathe of a giant map on the wall behind his desk.
Flags representing the company’s operations dot the spread from the tiny Pacific island of Fiji and remote corners of Africa to the centre of American and European cities.
Globally, the company is now the fifth-largest distributor of Caterpillar products worldwide, as well as the largest General Motors dealer (it first obtained the Egyptian sales rights in 1975), and also a dealer of Chevrolet.
Its presence is global, but Africa is the region where Mansour sees the greatest potential.
He explains: “In Africa, you’re talking 7% plus, because there’s nothing there. I always say anybody who is a success in New York can make it anywhere in the world, because it’s so competitive — you have to really come up with something very special to be able to make a bid there. But in Africa, they need infrastructure, they need electricity, they need everything, and a lot of countries are registering 6%–8% growth.
“We have an edge in that we’ve been in Africa since 1996 — so we know it well. We’re also in a lot of very difficult countries… it is not easy. We had Ebola and then the price of oil has dropped, so the GDP will be affected in Nigeria…”
Mansour’s vision is to create a company, “that crosses borders, boundaries and religions”. But doing so is not easy, with the firm affected by any number of economic effects at a given time.
“We’ve always got challenges to deal with, so we take it country by country. In some the challenge is security; in others the challenge is the foreign exchange devaluation or that the mining industry is hurting,” he explains.
“But what does this give us versus somebody who’s sitting comfortably in his comfort zone? Balance… If I’m in 100 countries, not all 100 are going to go through a difficult time — some are going to have difficulty, some are going to be up, some down — it’s a balance. But we just need to be prudent and wise about how we invest.”
Egypt, the company’s “heart and soul”, still makes up about 50% of the group’s business. Mansour Group was significantly affected by the unrest that following the 2011 revolution, but it is now experiencing record figures.
“It’s much more stable,” Mansour says. “The government has done a good job in bringing back the security, because it had been a nightmare. Now the issue is how to bring back tourism, because it makes up about 15% of the GDP.
From 2005 to 2009, Mansour himself served as transport minister, and made significant reforms to the country’s ailing rail system; but he has ruled out giving politics a second run.
“No, I’ve done it,” he says. “It was a fantastic experience, but a hard experience. I learnt a lot about my country that I didn’t know because as minister of transport, your job includes going to small villages… so I saw all the sides of Egypt I’d never seen before by sticking myself in Cairo or Alexandria. So saw how life was and I met a lot of very interesting people, but now it’s the phase in my life to grow the Mansour Group.”
The company will also be remaining in family hands, having ruled previous consideration of an initial public offering. Mansour notes: “We don’t need the cash. Our businesses are very liquid; our debt to equity in the group is about 0.6%–1.0%, which is nothing.”
That is probably just how Loutfy Mansour would have wanted it. From his early days as a pioneer in the Egyptian cotton industry, contributing to its still famed reputation, the visionary may well have foreseen the 120 flags dotted across his son’s enormous world map.
“We had a great father,” Mansour says. “I worked with him for two years when I came back from studying in America and I learned more from two years with him than college.
“Families and learning from them is key, because they love you and tell you the truth.”
Those same lessons also are being instilled in the next generation. With seven of Loutfy’s grandsons already in the business, the Mansour family has many more flags to raise yet.
