Meet George Arodi, the man who has transformed Uganda Baati, Uganda’s oldest steel company from just a roofing company to a holistic building solutions leader
George Arodi, the Chief Executive/Business Head of Uganda Baati Limited, describes himself as a results-driven leader with more than 28 years of experience in the steel sector in the Eastern Africa region. CEO East Africa’s Muhereza Kyamutetera sat him for an interview on his turnaround of Uganda Baati and prospects for the steel sector.
- For starters, tell us about yourself. Who is George Arodi?
George is a graduate of the University of Nairobi with work experience spanning several years. I started my career with a flagship company within the Safal Group family, Mabati Rolling Mills Ltd (MRM) in Kenya, as an Exports Officer. For 17 years, I grew through the ranks, holding various positions, till I was appointed the Exports Manager in 2007. In 2011, I was privileged to work with another Safal Group company- Ethiopian Steel Ltd, as Head of Business and Director for a period of 6 years between 2011 and 2017 when I joined this great company, Uganda Baati.
So, George is a true representation of what growing through the ranks looks like and how patience forms a key ingredient in scaling up corporate heights. Safal Group has been my home after school.
I draw great comfort in offering transformation leadership and infusing performance culture within teams
- What would you say has been the key highlight of your career as well as your contribution to the steel sector in Uganda and the region?
On the side of our company, first I stand as a true testimony of a Group which offers a career opportunity for all, irrespective of race among other considerations. I am among the first few Africans who grew through the ranks of our Group to the position where I am today. I am happy that after me, many local Africans felt challenged and have since taken up key positions within our great Group with the resultant effect of a substantial reduction in expatriate roles in our Group. It is this same approach that I have adopted over the years and Ugandans have taken over 95% of senior positions in Uganda Baati today. I am happy with the level of transformation the team, under my leadership, have brought into the business. Our overall profitability has grown by over 300% in the past 5 years. I will leave behind a strong team and culture that guarantees consistent performance beyond my life at Uganda Baati
I’m the current sitting vice chair of the Uganda Iron and Steel Association which brings together all the steel manufacturers in Uganda. Through this association, I believe we have supported the sector growth as well as supported harmony by addressing the various emerging issues in the sector.
Regionally, I was privileged to chair the Ethiopian caucus of steel sector manufacturers. While in Kenya, I was among the first sitting Board members of the Kenya Shippers Council. I also chaired the sub-committee on Regional trading blocs within Kenya Manufacturers Association (KAM). These positions, including that of membership to the coveted Trade and Tax Committee within KAM, gave me the required elevation to be part of the Kenyan private sector delegation during the negotiation of the EAC Protocol during the formation stages of the EAC. I was honoured to be among the few speakers during the East Africa Business & Investment Summit in Arusha in the year 2019.
I take great pride in the roles I have played locally and within the wider region.
- Uganda Baati has been in Uganda since 1964, but not as many Ugandans know about this great company. What are some of the key highlights and milestones- as well as successes for the business in these 58 years? What are some of the key facts and figures that define the business?
For the past 58 years, Uganda Baati has defined the business landscape of the steel sector in Uganda. We are the epitome of innovation- from the first 2 galvanising lines in Uganda in 1964. Before this, the roofing in Uganda was largely thatched houses. After this milestone, we continued to bring great innovations on various roofing sheet profiles which dot the Uganda environment today. We are happy that competition has borrowed heavily from these innovations with the effect of creating a platform for affordable and elegant housing in Uganda.
With our age comes to the information gap that resonates with the young population who now make a significant chunk of the consumer profile. We had a lull in highlighting what we do. However, we have made great strides in this area through Marketing and Corporate communications function.
- In your view, what is it that sets Uganda Baati apart from the rest of the other players in the business? What are some of the things that you would say, Uganda Baati does better than all the other players.
Uganda Baati, just like the Safal Group, works within 4 key strategic pillars – driving building solutions, improving channels to market, developing people and operational efficiency. We strive to be the best in these pillars and that’s the reason we were voted the Best Roofing and Steel Company in Uganda by the Consumer Choice Awards 2020-21. A lot of work has been put into our systems to stay at the top of our game.
We have a very strong corporate governance structure and put issues of compliance as our core. The company over the years has worked on the unmatched quality platform and prides itself as a market leader in innovation within the sector.
The company has put great focus on innovations around the route to market. Other than the traditional routes through hardware dealers, we derive strength in robust export, retail, and an institutional segment where our capable sales team offer technical support to our customers.
To bring convenience and comfort to our customers, we introduced the showroom concept, which is the first of its kind in the industry. The 10 showrooms dot the Ugandan market to augment what we can achieve through other market channels. Last year saw the company launch e-commerce as a route to market. Who could think that the full ordering process for steel from inquiry, and payment to delivery could be realized within this platform? This is a key milestone
Our focus is not only on roofing but on building solutions. Our company is now looking at everything that goes into a building structure either through manufacturing, trading or technical expertise.
As we do all these, we invest heavily in the people through building strong teams. Our investment in people’s well-being is top-notch. Our teams are aligned to offering the best services to our customers with specific scheduled engagement which we embed in our KPIs.
- Apart from being a leader in the business and pursuing business success- businesses must go beyond their financial success to create a more lasting impact on the communities and the countries where they operate. What would you say has been the overall impact of Uganda Baati on Uganda in the years you have operated here?
The Safal Group believes in giving back to the communities where we operate. This is being supported by the shareholders within all Group operations. We drive our Corporate Social Investments within the framework of 4 focus areas – education, health, housing and environment. On health, we have been running the non-profit making Chandaria Medical Clinic in our Kampala premises for many years now, where we offer subsidised health services to the surrounding community. We are in the process of opening the Chandaria Medical Clinic in Tororo within the next month to bring medical facilities closer to the people. Through these plans, we partner with a host of Government agencies and NGOs for various medical interventions including outreach programs.
On shelter, we have been offering roofing solutions to various institutions. During the year, we undertook a massive renovation exercise to the Sanyu Babies Home to the tune of USD 30,000, among other contributions. Our investment in young talent has been big with an ongoing graduate trainee program at the core of it. We have great pride as one of the few corporates that offer opportunities to grow budding talent within our community. Next year, we plan to have an Uganda Baati Technical Training Institute fully operational within our Tororo premises. The institute will offer training in various disciplines with a focus on those courses with high potential for self-employment. The model of the institute will borrow heavily from what Safal Group has done in our other markets like Mabati Technical Training Institute, in Kenya.
This year we will partner with National Forest Authority for the restoration of forest cover in Uganda. So, we cover all pillars of our CSI interventions. Some of these interventions are also through sensitization programs under our annual Safal Eye-In-The-Wild initiatives
- Looking at the Steel industry and speaking as one of the industry leaders, would you say, the sector has fully exhausted its potential? What would you want to see being done- at the government level, consumer behaviour, etc., that can help unleash the full potential of the industry?
We have not exhausted the full potential in the industry. Our industry is still evolving and we have to keep pace with various innovation opportunities. The Government of Uganda has been quite supportive of the sector. We are elated to see the involvement of the Govt in opening the infrastructure link with DRC. Other measures include Free Zones along the DRC borders which will be realized soon.
Despite these gains, we implore the Government to have a look at the overall tax regime in the sector which, traditionally, has very thin margins. There is also a need for predictable application of policies and a level playing field for the sector players. The road and rail connectivity in Uganda is still wanting and needs to be worked on for competitiveness.
Issues on standards had posed a challenge in the past. However, the Uganda National Bureau of Standards has worked hand in hand with the sector players to bring a semblance of sanity.
The steel sector is among the highest consumers of electricity and the quality and pricing of power are also important for competitiveness.
- What is your take on the economy- versus pre-during and post-Covid 19? Would you say we are fully recovered?
Other than ripples from Covid, the economy has been subdued by the effect of the war in Ukraine with resultant pain. I must say that the Covid lockdown saw great performance in our sector as the closure of schools and other spending lines in the economy left some money in the pockets of the consumers. You can remember that the Bank of Uganda announced some of the biggest saving numbers amongst the Ugandans during the lockdown Our sector was a beneficiary of this healthy disposable income.
The ripples of the Covid period are being felt now with renewed demand for Forex after the opening up of the economy with a serious negative impact on the Uganda Shilling. Many manufacturers are sitting on huge stocks which came at high prices and posting massive losses.
From where I sit, I don’t think economic recovery from the Covid effect will be realised before early 2023.
- What are the regional prospects for the sector, but generally as Uganda Manufactures especially in light of key opportunities such as the EAC, AfCTA as well as the renewed oil & gas sector?
I will break your question into two – regional trading blocs and the oil/gas sector effect on the economy, and I will be very candid here.
Any trading bloc indeed offers enhanced opportunity due to the large market. The EAC and AfCTA, for example, sit on an estimated market size of 300 million and 1.3 billion respectively.
However, due to an array of challenges which permeate the African continent, especially infrastructure connectivity, I still believe that the closer a member state is with one another within a trading bloc, the higher the chances of harnessing the benefits from the bloc. This is the reason why EAC, which is among the youngest blocs has realized so much intra-trade within a very short time. It is always good to dream big, but unless we address issues which affect our market access, we sit on just a dream.
The market penetration within COMESA and ECOWAS which are very old blocs is still at a low ebb. Why? When you try to answer this question you start to get the convergence of the reasons which always rare the ugly head in all trading blocs in Africa – infrastructure connectivity, mistrust, lack of political goodwill, non-tariff barriers, protectionism and concessions given to other member states which limit the market opportunities for other member states with the potential to supply those markets etc. For example, how would Ugandan steel products access the Egypt market and remain competitive? The EU market has gained so much market penetration there due to infrastructure connectivity
We need to address these issues for us to achieve the much-needed market penetration. Another area of focus is for each member state to work on areas of comparative advantage for competitiveness rather than trying to spread themselves so thin in all areas.
In the oil and gas sector, in Uganda, we have seen great opportunities not only for local manufacturers but also for suppliers of other goods and services. The manufacturing sector has been rallying the Government and players in the sector for some preference on supplies through the Buy- Uganda-Build Uganda initiative. This is bearing fruits. We as a business have been among the first beneficiaries through our supplies of PEB structure, SAFBUILD. It is expected that the coming phases in the construction of the oil pipeline will give an even better stake to the Ugandan manufacturers
It is only our prayer that the Government of Uganda will not relent in giving support to other sectors of the economy when oil money starts trickling in. Many economies in Africa have registered collapse in other productive sectors upon striking oil. Uganda, with its fast-growing population, cannot ignore the role of agriculture in spurring economic growth through food security and export potential.
With the world’s focus on climate change, the contribution of oil to the economy must also be looked at with a long-term perspective in mind. For example, how will the growth of electric cars impact on world oil consumption?