Haile Gebresilassie on how he thrived as an entrepreneur

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Haile Gebresilassie is a legendary athlete and a symbol of inspiration locally and at the international stage. He has won multiple of world and Olympic titles. He is an athlete turned entrepreneur. He gives a testimony that both professions are similar in some aspects. But for him most of the disciplines in these professions are “completely different.” When he switched a profession from athletics to business, he said that he learned how to be more patient. Kaleyesus Bekele of Origins Business sat down to learn more from him, Excerpts;

 

 

 

Origins Business: How Haile and Alem investment launched? How many of employees you have? Your initial capital and tell us about what was your first investment?

Haile Gebresilassie: It has been more than 20 years since Haile and Alem investment has been launched. Back then, I was an athlete. You can’t deposit the money got from athletics in a bank; investing in certain investments is a better way. My elder brother Assefa had a role in facilitating preconditions for investments and we launched investments in 1990. Getaneh Reta, an architect, designed my first commercial building at Haile Gebresilassie Street. By the way, there was no building rent business back then—we are five—Tsehay and Siblings, Sun Shine, Warit owner Mr. Legesse and Werqshet are the first to initiate the rent contract law to the government. Haile and Alem International PLC continued construction of buildings for our office purposes.

Origins Business: You also launched a Real Estate business.

Haile Gebresilassie: Yes, we did. We even sold out 38 villas and 300 apartments, and as we have given due attention to joining a resort and hotel business, we quit the real estate business shortly.

Origins Business: Could you tell me how many employees and total capital you have now?

Haile Gebresilassie: Well, we started our initial investment at an outlet of 300,000 Birr. Today, we have reached a billion Birr capital. Excluding Marathon Motors, a sister company of Haile and Alem International, the total number of employees under Haile and Alem International reaches 3500. They are working in our 7 resorts, coffee development, school, fitness center, and construction activities, among others.

Origins Business: You received a recognition award from Prime Minister Abiy Ahmed (PhD) for being a loyal highest taxpayer. How much you pay for tax in a year from Haile and Alem International PLC?

Haile Gebresilassie: I am working for being loyal to myself, not to the government or the third party. We pay a profit tax of over 100 million Birr annually. Think of other dues in a year—our Turn over Tax (TOT) could be estimated at around 800 million Birr. We are collecting money to pay the 2013 Ethiopian fiscal year tax. I am working to satisfy myself—not only for the sake of money. If you opt for just working for money, there are jobs that you can work in a very relaxed mode. The people should understand that.

Before the year 1998, I was a rich person in terms of money I had. And, now I am rich in job and its satisfaction; but not in cash.

Origins Business: Tell me more about Haile Resorts. Now you have 7 resorts in Hawassa, Adama, and Arba Minch.

Haile Gebresilassie: I am a customer of hotels wherever I travel.  Once upon a time in my visit to Spain, I observed a resort in Tenerife Island and aspired to have such a resort in Ethiopia. I received investment land from Hawassa city administration after returning from 2000 Sidney Olympic. They (Hawassa city administration) granted me 5,000 square meters of land. But, I thought it was not enough. We purchased extra 6,000 000 square meters through the land lease.  Finally, we have now over 11,000 square meters of land. We first made a loss during the first days of Hawassa resort as the project was new and attributed to a lack of trained manpower in the hotel and tourism sector. We opened Shashemene, Batu (Ziway) resort to create an interlinkage between these branches.

As far as hotel and tourism is concerned, my benchmark is Mr. Bekele Molla. He is the most successful businessman in Ethiopia. He followed the rift valley areas to build hotels, starting from Langano—because rift valley areas are preferable entertainment hubs as well as suitable for management. Likewise, I have been opening branches in the same trend. I travel by vehicle to pay a visit to each of my resorts. I’ve learned from Mr. Bekele’s experience a lot in terms of management of staff. My presence in each of the businesses I am running has of great value.

Origins Business: Do you see Haile Resort becoming successful? What are the impacts of the Covid-19 pandemic on your business?

Haile Gebresilassie: I don’t give much focus to the pandemic as its impacts are a global-wide, not exclusively against us. Our business had been suffered from the Covid-19 pandemic for almost a year. We survived by investing what we were earning in other investments.

Origins Business: The hotel and tourism sector is a burdensome but profitable business. Isn’t it?

Haile Gebresilassie: Yes, there’s even a saying, “Being a soldier and working at the hotel and tourism are burdensome professions. We have 1600 employees at our resorts.

Origins Business: What about the damages in Shashemene and Ziway resorts?

Haile Gebresilassie: Everybody should take a lesson out of those damages. Especially, we have had a big loss in the Shashemene resort due to the chaos in July 2020 (In the aftermath of the killing of famous singer Hachallu Hundessa.)  Ziway has restarted providing its services thanks to the cooperation from City’s mayor. Correction measures should be taken not to repeat such mistakes. There are 200 staffs in Shashemene resort that are out of work at this moment.

Origins Business:  Could you tell us the amount of damages brought against Shashemene and Ziway resorts?

Haile Gebresilassie: Our rough estimate show, we lost over 150 million Birr from the damage of Shashemene’s resort. Take Ziway’s Haile Resort, we lost 2.5 million Birr due to deliberate mirror damage alone.  The costs we all are paying now like the ever-galloping inflation and its overall impacts are the aggregate results of such intentional damages on our investments.

Origins Business:  How much you have invested to rebuild Ziway’s Haile Resort?

Haile Gebresilassie: We invested over 70 million Birr.

Origins Business: Despite all the challenges, you are constructing hotels in Debre Birhan, Konso, and you are also considering 1 billion Birr investments in Gorgora? Tell us about it.

Haile Gebresilassie: We are considering investments of close to 1 billion Birr in Gorgora. I have a burning desire to invest there. But, for the time being, our focus is much on the under-construction projects in Debre Birhan and Konso areas. Our huge investment project is in Addis Abeba, just near to Ararat Hotel with facilities of 165 bed rooms, conference rooms, and swimming pools, which is set to be unveiled in a few months.

Origins Business:  Let’s discuss agricultural projects you are working on in coffee farming in Sheka area. Also, you are engaged in forest honey production.

Haile Gebresilassie: I first started coffee development to generate export income for Ethiopia. We are marking a decade of our establishment. Ethiopia has significant potential. We have great potential as a nation but due to policy failures, the poor working culture and unaltered attitudinal change are makes us poor. We are importing Wheat even from the United Arab Emirates (UAE), where you can rarely see arable lands. I am much interested to receive arable land and engaging in wheat farming. We have to copycat other nations experience that matches with the local context to ensure development. For instance, our coffee production has gained a warm welcome from Starbucks, and we exported 12 containers of organic coffee.

Origins Business: What sort of challenges you have encountered so far with the agricultural projects?

Haile Gebresilassie: The last three years have been tough years both for Ethiopia and our businesses. The government institutions have estimated the cost of our loss of agricultural materials such as tractors amounting 28 million Birr—that has been set under negotiations as we are still complaining that estimated value by the government is lower. Around 200 investors including me have suffered damages due to instability in the country. Repaying the money for damaged properties has too much for the government—I know that. Compensation payments have been made for the companies that suffered damages including Ayka Addis but not for my businesses, and I understand that repaying back all of us means a lot for the government itself.

Don’t be surprised by the ever-increasing inflation—that’s an aggregate result of all the damage we‘ve been through the last three years.

Origins Business: Haile, you have been engaged in gold exploration project at South region. What’s its progress so far?

Haile Gebresilassie: That’s located at Aroresa area in Sidama region. The Aroresa mining has a good deposit of Gold minerals. We are working with Ethiopian businesses in a joint venture agreement. Once we perform in our full capacity, there’s a plan to enter into a partnership with other businesses. This investment is a hopeful one.

Origins Business: What are the main dilemmas in the investment landscape of Ethiopia that you recommend to be resolved?

Haile Gebresilassie: The first bottleneck comes from the policy side, which I mean is that there is a lack of consistency in terms of rules and regulations implemented across regions. That’s a huge debacle to investments, which every investor wants to be eased as quickly as possible.

Lack of security is the second main challenge that has been hurting investments.

A very high investment loan interest rate from banks has been also lagging investments behind, especially for those committed investors like me.

Origins Business: You were the most talented and successful athlete turned investor. You have registered a billion Birr capital and hired over 3500 employees. Did you get a benefit from being an investor?

Haile Gebresilassie: The two professions are similar for their desire to be always a winner. The endurance that I developed in my athletics times has been useful in my businesses— that’s how I thrived professionally.

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