How A “NO!” From His Father Led This Entrepreneur Into Building A USD 1 Bn Oil Company In Tanzania

It was a warm afternoon in Dar es Salaam, the Tanzanian capital, and even though it was yet early days in 2017, one of the country’s prominent entrepreneurs was revelling in yet another big win.

Ally Edha Awadh, who is gaffer at Lake Oil Group, had just gotten the all-clear from the Competition Authority of Kenya to add all the fuel service stations of Hashi Energy – one of Kenya’s largest independent oil companies – to his company’s portfolio.

In his company’s pursuit of regional domination, this development did seem like a nudge forward – gaining significant ground in Kenya despite being a foreign company making light work of penetrating other East African markets. Hence, the excitement of the Tanzanian businessman.

The Kenyan connection represents yet another milestone in what has been an extraordinary journey for the Lake Oil Group boss, who in the space of a decade, has built his energy solutions company into a billion-dollar establishment on the backs of some deft business moves.

Ally Awadh established Lake Oil Group in 2006 and under his stewardship, the company has developed into one of the fastest-growing energy trading and transportation conglomerates in East and Central Africa. In his home country, Tanzania, the company is up there with the biggest names when it comes to the distribution of petroleum products.

The company’s footprints also extend to countries like Rwanda, Zambia, Burundi, and the Democratic Republic of Congo, where it distributes and trades oil and gas products. And that’s not all. Lake Oil Group also has holdings in the manufacturing industry with its lubricant and ready-mix concrete production plants.

Apart from having ownership of storage facilities in Tanzania and the DRC, the company is a juggernaut in the transportation segment with its armadas of over 400 tankers and trucks. And that adds up to its trading operations and gas stations in Rwanda, Mozambique, Uganda, Burundi, Canada, and the U.A.E.

It would seem that Ally Awadh; the man behind all of this is doing pretty good at this point, but it was anything but a routine walk in the park. Even though he came from relatively comfortable backgrounds, he’s has had to slug it out and find his way – mostly on his own.

Granted; his father was a successful businessman who had made quite a fortune trading agricultural commodities in Tanzania, and as such, Ally didn’t have much trouble getting the best quality of life. But the young entrepreneur knew enough to carve his own path.

Having completed his high school studies at the prestigious and exclusive International School of Tanganyika, Ally was shipped off to Canada for college where he had gained admission to study Business Administration at Brock University.

And that was when things began to change. Ally had basically been spoon-fed all his life since his father was there for his every need. Everything he asked for, he got. But the reality check was to soon come.

And even though it came in the form of chiding and derision, and perhaps dealt him a rude awakening, it just about did the job. And looking at how things have turned out, he’d be thankful for the chain of events that have led up to the ‘making of him.’

 

 

Back in his undergrad days, it was something a given that he got a generous allowance from his father every other month. But when the old man’s business sort of hit a rough patch, there had to be cut in spending and Ally’s allowance took a fair hit.

Having grown used to having his way all the time, he ran to his father with a barrage of complaints but as the old man was in no mood to be bothered, Ally got a shocker from him in a phone call that may have changed his mentality.

“My father basically got tired of me always calling him to ask for more money, so one day he bluntly told me on the phone that I was an adult, and if I wanted any money, I needed to start working for it. It was a reality check for me,” Awadh recalls.

 

While his father may have just been chiding him out of irritation at the time, his words inadvertently struck a cord. And from that moment, Ally resolved to go out there and bake his own bread – even though he may have to do without butter.

 

He took an after-school job at McDonald’s and that experience revealed to him a part of life that he had apparently been missing all this while. For the first time in his life, he was taking orders and serving people. And that may have helped him develop the people and communication skills that have served him so well in his entrepreneurial career.

More importantly, though, he was making money for himself for the first time in his life, and because he was experiencing first hand how hard it was to make just a few bucks, he learned a thing or two about saving. Gone were those days of squandering his father’s money – now, he saved every penny he made.

Those savings were instrumental in launching his first business post-college. Ally started a ‘Mitumba Biashara’ business. He was importing used clothes from Canada and selling in Tanzania.

And the business boomed. The Tanzanian entrepreneur doubled his money on his very first consignment and that set the tone for the future of his second-hand clothing business. A few years later, he had accumulated a considerable amount of cash.

 

 

That served as the capital for his next ventures. First, he flexed his muscles by importing used and refurbished trucks from the United Kingdom to his homeland and before long, he grew another tentacle by starting a milk processing facility that was to be sold eventually. By this time, he was just 25 and already a dollar millionaire.

Ally Awadh had always had one eye on the oil and gas sector and all those years, he was spoiling for an attack on the industry. Now armed with the means, he applied for a license from Tanzania’s Petroleum Bulk Procurement Agency (PBPA).

Being only 26 at the time, the agency had a hard time taking him seriously initially. It was not common to have persons his age take on such a project but after subjecting his finances to stern scrutiny, it was obvious he had the means to play in the business. And he got the all-clear.

Lake Oil Group formally kicked off operations in 2006 after Ally assembled a team and began to import petroleum products into Tanzania, distributing it to gas stations. Within a couple of years, the company’s balance sheet swelled and loans started to come in from both local and international banks.

With those loans, he was able to build oil storage terminals in various parts of Tanzania. He also started buying up retail stations and setting up new ones across rural regions in Tanzania. This practice of shoring up in routes less trodden soon became representative of the company’s model and it has so far yielded immense dividends.

Away from Tanzania, the company is now also developing fuel stations in Rwanda, Burundi, DRC, Zambia, Malawi, and Zimbabwe.

The petroleum products distribution business soon necessitated the need to venture into Tanzania’s transport sector and that birthed Lake Trans; one of the largest trucking and haulage companies in Tanzania. Apart from primarily servicing the needs of the business, the company also leases trucks to other businesses occasionally.

Ally Awadh’s Lake Oil Group also has a gas subsidiary, Lake Gas, which takes a lot of credit for the popularity of cooking gas amongst Tanzania’s rural population. Having consolidated on its position as market leader in that regard by launching a top-notch gas storage terminal in northern Tanzania in 2017, it is now looking to break into Uganda, Rwanda, DRC, and Zambia.

“My idea is to build Lake Group into a Pan-African diversified conglomerate by the year 2025, employing more than 15,000 people. I believe it’s possible, and as long as God lives, I am unstoppable,” Ally Awadh says.

And he hopes to achieve this through the diversification of his portfolio. Lake Oil Group has established a ready-mix concrete company with production plants in both Tanzania and Dubai. In addition to his recent investment in a steel plant in Kibaha, Ally Awadh is exploring a partnership that will lead to the establishment of a truck assembly plant in Tanzania. Agriculture and agro-processing are also believed to be the future interests of the African entrepreneur.

The 39-year-old Tanzanian businessman is also a known philanthropist in his homeland. Through the Lake Oil Foundation, he doles out hundreds of thousands of dollars yearly in scholarships, grants, and various charity projects for underprivileged Tanzanians.

 

 

Featured Image Credit: lakeoilgroup.com