INTERVIEW: Mohammed Mohebi, CEO, Mohebi Logistics
Despite Mohammed Mohebi surely being one of the busiest businessmen in Dubai, he was happy to take his time when I had the pleasure of sitting down with him at his offices in Dubai’s Jebel Ali Free Zone (Jafza) last month.
Our interview easily ran nearly 90 minutes, touching on everything from starting up a business during an economic slump to why it can be incredibly important not to be the smartest person in the room.
The charismatic chief executive, who launched Mohebi Logistics in 2008, also believes in taking his time when it comes to building up the organisation, telling me it’s more important to make sure his company’s latest project – its $150m Dubai World Central facility – is just right than hurry for an early finish.
“It is not a revenue centre so there is no urgency to meet a certain deadline; we really want to get it done right so if that means an extended period of time then so be it. Our operations have been running for 84 years so another six months wouldn’t change anything,” Mohebi reveals.
Currently, the warehousing facility is scheduled for completion by the middle of 2016 and the office facility approximately a year later.
“It should be exactly the way we want it with no compromises but I have told my team to push the warehousing because we are under contract. With the corporate offices to take their time,” he adds.
The nearly nine decades of heritage Mohebi is referring to is remarkable; he is the third generation of his family to continue in the business, following his father Zainal, the man behind Zainal Mohebi Holdings, and his late grandfather Baqer, who was one of the first traders in the original Dubai Souk in 1931. Mohammed’s children, I am told, are waiting for their turn too.
When the young Emirati, following in his father and grandfather’s footsteps, branched off with Mohebi Logistics, the company began with Jebel Ali warehouse operations in 2008, accommodating 33,000 pallet positions.
Featuring temperature controlled chilled and frozen storage and docking facilities, and having ISO 9001 and HACCP certification, in addition to TAPA Tier 1 and Feng-Shui compliancy, InforWM warehouse management system and wireless handheld and truck mounted technology to support both barcode and RFID methodologies, the first warehouse ticked all the Mohebi boxes of ‘getting it done and getting it done right’.
Tremendous growth followed soon after and as of June 2015, the company – a subsidiary of Mohebi Investments and an affiliate of Zainal Mohebi Holdings –has broken ground on a $150m facility within the Logistics District at Dubai World Central (DWC).
It is easy to see why Mohebi chose DWC, given the purpose-built hub’s exciting growth trajectory and optimal location, but interestingly the decision was made before DWC won its bid to host the World Expo 2020 and, and therefore present logistics opportunities on a silver platter.
“At the time when we were looking at expansion, there was no Expo 2020 on the horizon, so it was a fantastic bonus for us first that Dubai won the bid and, second, that it will be hosted at DWC. It was really a beautiful surprise,” Mohebi shares.
He tells me that DWC “having the business plan right” is what attracted him initially.
“There was a new airport being built [Al Maktoum International] and a massive area of land bank, which we required because in logistics part of what you need is warehousing and warehousing requires massive land banks.
“The location was prime, and accessibility both to the airfield and to the seaport was there, so it gave us the best of everything. Jebel Ali is phenomenal but why expand in an area we are already present?
“It was a natural choice to go to DWC and we wanted to cover both bases [of DWC and Jafza] because these are both extremely important infrastructures within Dubai, and it was important we be placed in both sites,” he adds.
The new facility will be spread over 206,000 square metres of land and will encompass the Zainal Mohebi Holdings corporate office and FMCG operations, along with storage capacity of 180,000 pallet positions; more than doubling Mohebi Logistocs’ existing storage and logistics capabilities.
The development forms part of an overall $300 million investment Mohebi Investments has earmarked to establish Mohebi Logistics, already one of the largest vertically-integrated supply chain management companies in the Middle East, as a major regional player.
Mohebi Logistics is in an enviable position, having hit a number of key milestones in its short lifespan, which is all the more remarkable when you remember it became operational in the troubled year of 2008.
“This was around the time the big crash came, yet during that time, given what was happening in the market and while we were still partially running at half capacity, we expanded our facility by another 45,000 pallets in 2011.
“That means we took up our capacity by nearly 140% at a time when we were nearly at 50% capacity,” Mohebi reports.
Asking the obvious question of how this was possible given businesses across the globe had plenty to battle in the economic downturn, Mohebi gives a surprising answer that affirms his enthusiasm and ambition.
“I believe in the leadership of my country and I believe in what the UAE stands for. I can see where the country has come from and where it’s going. If you believe in it, you see opportunity; prices were down, people were more flexible. You could get better deals and start constructing.
“To me, this idea of ‘wait and watch’ is not something I subscribe to, personally. There was an opening, there was a market slump so, alright, we had to wait a little a bit longer and we had to tighten our belts a little bit during the process but it was an opportunity and we took advantage of it,” he reveals.
Mohebi Logistics is practically at full capacity at the moment and, since 2011 especially, has signed so many contracts that in 2015 the company is turning business away.
“We cannot accept a large contract,” Mohebi comments, adding that, to increase capacity, the company has signed an agreement for a large plot of land in Abu Dhabi.
“We will be in Kizad [Khalifa Industrial Zone Abu Dhabi] in a large way – larger than Dubai,” he reports.
Mohebi subscribes more to the ‘early bird catches the worm’ approach rather than a ‘wait and see’ philosophy, moving forwards ambitiously, but carefully, ensuring the organisation remains faithful to his preference for taking time to get things done properly.
Admitting that the company has surpassed the initial outlook – “We never expected it to turn out the way it did” – Mohebi says establishing the business in the first place was not an easy feat, despite the Mohebi heritage.
“Since 2008 there have been many challenges. When we came into the market we were the new kids on the block and I don’t think many took us seriously,” he explains.
“When we started Mohebi Logistics it was as a greenfield company. Once our DWC facility comes online we will become one of the largest, if not the largest, operator in the UAE with a pallet count of over 250,000 pallet position, and that does not even include Abu Dhabi.
"I do not see many other players with that kind of capacity. When Abu Dhabi comes in and if other small satellites here and there happen – we are talking to one or two clients that want their own purpose-built facilities – it will further add to our capacity,” he continues.
To facilitate this level of growth in a fairly short space of time, a workforce behind a management team needs to be first rate. Indeed, the family owned Emirati company puts a lot of stock in keeping employees close, and being a little bit different in its approaching o running a business.
“I am proud of our entire achievement [since forming] and what our team has done in this organisation. Talent is absolutely key – getting the right people to do the right job,” Mohebi asserts.
“As CEO, I spend more than 60% of my time internally, so the majority of the time I am creating the right environment and opening up the road blocks for my team to do what they need to do.
“You get the best people around, bring them in, empower them and let them do their job. My job is to support them, not the other way around,” he says.
Elaborating on the positive work culture he has strived to cultivate, Mohebi continues: “Have we made mistakes? Plenty. Will we make mistakes? Of course. But we just as quickly correct them. There is no politics; people are encouraged to be innovative and to look for new ways [of working].
“A quote I love greatly comes from Eric Schmidt, the executive chairman of Google, and he says [paraphrasing] innovation never comes from the establishment, it comes from the guy in the garage.
"So in the logistics world, we are the garage guys and in order for us to differentiate ourselves, we must be innovative. We cannot be a ‘me to’ product, otherwise why would people come to us?”
It becomes clear that a great source of pride to Mohebi is his team’s ability to present new products, designs and solutions to clients.
“The majority of the customers we have are not 3PL customers that we have taken from other players – instead, we have migrated them. That means they were doing business in a very different form, we went in and spoke to their team, and fundamentally changed their business model; they chose to move to a 3PL business model.
“While we have gone after big 3PL tenders, a lot of times we were able to convince major players that we, as a third party logistics player, can add value and bring savings,” he comments.
Continuing, he remarks: “When a business changes its working model and methodology, it is not an easy thing to do. There are a whole host of people who that may be resistant or doubtful, so to be able to convince them and for them to continue working with you means you really know what you are talking about and have come through for them.
“To create something and go to a business, saying ‘I think what you’re doing here can be done better – let me show you how and why, and if you don’t make money, we won’t make money, so let us be in the same boat’ is a very different conversation to have.”
Besides innovation, Mohebi Logistics also places importance on trying to build a diverse workforce that helps in order to maximise its potential to impress customers.
Speaking specifically about drawing women into the mix, Mohebi says: “There is a basic logic that women bring to any equation that sometimes men overlook – bringing alternative points of view to the table that are, in my opinion, more based in reality. Women can play a tremendous part, especially in the management of the supply chain, but the challenge is convincing them to come to this industry because it may not look attractive.
“It is a very blue colour industry and generally a child would not say ‘when I grow up I want to move boxes’, whether they are a boy or a girl.”
To address this he believes some education is required for job seekers and students in order to explain what logistics and supply chain means, and the critical role it plays in society.
“People do not often realise that when they go to the supermarket and pick up their coffee, for example, the resources, expertise, investment and number of people it has taken for that coffee to arrive on that shelf in that condition.
“So, the level of education required is very important to enable both men and women to gain a better understanding. This will enable us to attract a wider pool to the industry and that will bring in more talent.”
Widening the talent pool is, of course, crucial partly due to the issue of staff retention in the GCC region where rapid growth has led to more career opportunities available and a tendency for employees to jump ship fairly frequently to see if the grass is greener.
Mohebi outlines his approach to motivating and retaining staff: “We are rigid on letting people in but once people do get in, they really are part of the family and we stick with them.
“Even with personal problems, at times, we try to get involved – that is a differentiating factor between a family business and a non-family business.”
“One of the ways we are able to keep people is because they feel comfortable here. They know they are not numbers; we interact with their families, they can rely on us and we are there for them.”
In addition to creating a fa family feel, he says giving employees a certain level of freedom to develop is paramount, perhaps talking a leaf out of Google’s book again.
“One of the biggest challenges for truly creative people is being allowed the opportunity to spread their wings.
“If you take a talented person and restrict that person or allow him or her, that individual will not be happy – and the higher up you move, money plays less of a role. That type of person wants to experiment, to be a part of something great and make history, and that is what we’re doing here.”
Elaborating, he continues: “I always tell my people it is not every day you have your finger print on the DNA of an organisation and this is one of those times. Five or seven years from now, we will lose that opportunity but what our team is building here today is something that will enshrine their names in the history of the organisation as long as the organisation exists. That opportunity doesn’t come by every day. The excitement and the fulfilment here inspires people, and it is one of the ways we get really good people.”
Interestingly, Mohebi Logistics has a member of senior management present candidates’ interviews, even for junior level staff because “that is what a family business does”.
Mohebi tells me than while he does not want to interfere in line management, he wants some involvement and feels it is important for interviewees to know there is somebody “from the family, from senior management” who cares enough to answer their questions.
“These things all come together to create a beautiful environment and the results are showing. No matter how much money you put into it, how much of a capital base you have, if you don’t do the job right, you won’t get the growth. Growth is coming and our customers are positive to the point where we have, in fact, been asked by our existing customers to set up in counties where we have no operations in, and they’ll wait for us.
“This has happened in India and South Africa so far; we were asked to go in because of the great job we did for them here. That tells you something,” he states.
Mohebi recognises this can only happen with a strong team in place, noting: “We deliver, and I always say ‘we say what we do and we do what we say – it’s that simple’.
“Life in its purest form is very simple and we human beings complicate things.”
Our discussion, at times, turns philosophical, happens rarely when I am speaking to logistics chiefs. With thoughts turning to what a person’s purpose in life ought to be, Mohebi says he feels that not only do many people have no idea why they have chosen their career path, they do not question it.
“Because you want to make money is not why you do something; that is a result of a function and not a reason,” he muses.
“Why do I do what I do? To create a legacy. I have always believed that when you are born of privilege you have a certain duty to do something with that privilege. You cannot just be a consumer.
"You should want to be remembered for something you have done, not to be a waste of space – you should be able to say what influence you had on your family, community and the environment.”
The Emirati logistician continues: “It’s not about money; this is one of the worst ways to make money because it is highly capital-intensive and not an easy industry. It is about creating a legacy and given that the UAE, in particular Dubai, is already the logistical and transportation hub of the MENA region – and given the UAE’s intention to become one of the few super hubs around the world – how can you not have any local capability? That’s a fundamental flaw there.”
He cites an organisation he admires greatly as an example in making his point, stating: “It is like having Dubai International Airport without Emirates – that changes things.”
His interest in enhancing local know-how and pride in being a homegrown company also relates to Mohebi Logistics’ entry into DWC’s Logistics District, which he sees as a golden opportunity to show what Emirati expertise can achieve.
He comments: “As a nation, if we truly want to be leaders in logistics as we are in transportation because Emirates has done a phenomenal job... well, we are not there yet and we need Emirati organisations operating in logistics. We have created a beautiful platform but we have not taken advantage of that platform.”
Continuing, he clarifies: “I am talking about the intellectual knowledge; right now the majority of supply chain and logistics is done by foreign companies, and there is nothing wrong with that, but where is our know-how? I think the government can help through promotion to demonstrate Emiratis or GCC companies can do the job, and support in reducing bureaucracy and red tape, and dealing with customs issues proactively.
“A lot of people said when I first started excavating in 2005/2006, ‘What are you doing? This cannot be done’ and I told them ‘look around and tell me it cannot be done’. Who would have thought Emirates, which is such an inspiration to me, would be able to do what it did and why can we not follow in its footsteps?”
With such a clear vision about realising his ambitions and furthering the company’s progress, it’s not hard to see why Mohebi has carved out such a strong position as a leader. It was also obvious within five minutes of meeting him that he is the sort of approachable boss a team responds well to.
He describes himself as a hands-on boss, but one that happily delegates and follos what happens closely.
Mohebi also has no intention of being the expert in every aspect of his operations, as he explains: “I try to bring in people who know more than me in their particular fields, so if I know more than that individual in a certain subject then I have most likely hired the wrong person. Why would I require that individual?
“When I am sitting with my team, with different experts in marketing or finance or IT, for example, they have to know more than I do.
“It is important for a leader of an organisation not necessarily to be the smartest guy in the room – that is not what it’s all about.”
He advises: "Have a strong knowledge base around you, surround yourself with people who are gurus in what they do and allow people to fight you on what you believe.
“Heated debates are healthy; I can’t stand the ‘Yes, Sirs’ because that means I’m not getting the true knowledge to help me make a more informed decision.
“At the end of the day, the decision is mine but I can only make it if there are people around me who know what they’re talking about and have the passion to fight for what they believe in, rather than worrying about hurting their career or causing resentment in the company.
“I love it when people say ‘I don’t agree with that decision or point of view’, as I can then invite them to convince me of their opposing viewpoint; I think that is a better way and we can start debating in a very cordial way.”
Mohebi says that because everybody has the chance to air their views, once a decision is made, everyone can get on board without feeling left out or disenfranchised.
“That is part of my leadership style,” he explains. “At the same time, there is no perfect work environment but I genuinely put a lot of effort into creating a positive environment in the company.”
Part of this means striving to ensure when one “star in a department” does a great job, colleagues feel inspired rather than threatened, which will lead to more innovation, in his opinion.
“There are so many people with good ideas who are afraid or don’t want to rock the boat and it is surprising how much you could learn, and how much innovation comes just by listening to your employees. You don’t need to spend a fortune on bringing in outsider consultants – the information is there within your own company, you just need to tap into it.
“But to do that you must create an environment that encourages people to speak up about their ideas,” he offers.
With our interview drawing to a close, Mohebi concludes he is pleased that as an Emirati company, Mobehi Logistics has been “able to demonstrate local know-how and how if you truly believe in what you do, and truly are passionate about what you do, anything is possible.”
He hopes the company’s story encourages other people to pursue their goals, stating: “I would like to see more GCC companies getting involved in supply chain and logistics, and I would love to see more Emirati men and women coming into the industry.
“Hopefully we will continue to demonstrate just what a homegrown organisation can do. I think if you look at our projection for the next five to seven years, you would be impressed with our plans.
“We are really going to take it to the next level and we are just getting started.”