In penning my memoirs, I wish to reflect on how great companies destroy their golden eggs.
Once upon a time back in the 1990s, Kenya Airways (KQ) freighted miraa. It was done in a really crude way. The miraa would be brought to KQ warehouse at JKIA by Somali traders in pickups or by bus. The traders used to physically fight it out for cargo space.
Some of the Somali traders were unscrupulous and would “incentivize” acceptance staff to offload their competitor’s miraa from the plane. Once staff were compromised, a vicious war would erupt.
One evening one of them drew a dagger and stabbed the other and critically injured his business rival. The victim of the stab survived by Allah’s grace, It was horrifying scene as the blood spewed in the fresh vegetable acceptance area.
Kenya Airways and British Airways (BA) flights to London were ideal for the miraa traders. They both departed at 11 pm and would arrive in London by 7 am fresh for distribution and consumption. The other airlines do not fly direct to London some like Emirates routed through Dubai etc was precarious as they would arrive dried due to the Dubai heat. The aviation bilateral laws require all carriers to first route through their home base stations before proceeding to other destinations to protect each national carrier interest.
Because of the war at KQ warehouse, the then management in the early 90s decided to ban miraa on KQ flights. BA, on the other hand, were meticulous in handling miraa. They had one exclusive freight agent known as General Freighters Ltd that handled their miraa shipments. All the miraa would be consolidated (and packed in pallets) in the General Freighters Ltd premises and all documentation is done there.
For those in the cargo industry, all the miraa was consolidated under one master air waybill and each individual shipper had his own house air waybill under the master airwaybill. The miraa traders were not allowed inside the General Freighters Ltd warehouse. A pallet carries around 3 tons and the way it works up to 50 miraa traders or more would co-ship under their individual house airway bill on each pallet. Thus some would have 50kgs and others 100kgs depending on their ability and customers. Miraa business is an intricate cartel but these guys are organized.
It works this way the Meru community grow the miraa twigs. The Somalis export it (they are the traders). The freight forwarder was Indian and the biggest market for the crop is London where a huge Somali community resides. Paper/ Documentation work for miraa is really intricate due to the number of shippers on one pallet. To ensure that no drugs are in the miraa consignment General Freighters Ltd and BA had an arrangement with the police dog unit at JKA to have dogs sniff it. Because of this arrangement BA never had any incidences. To arrive at this system required years of negotiation and it worked like clockwork. For BA, Nairobi JKIA station was its cash cow in Africa. Like De La Rue, they just minted money for years as KQ was in the slumber. Somali are great as they pay for space in hard US dollars.
Come 2005, I was appointed KQ Cargo Capacity Revenue Manager. The first thing that sparked my attention was the miraa trade. KQ handled the BA flights and I began to question how come KQ can handle BA flights which freighted miraa yet they could handle their miraa own on its flights due to internal corruption. It was totally ridiculous. Somehow I had to find a way to penetrate the trade?
At the time I was under a lot of pressure to deliver the cargo budget of Ksh 100 million a week and my sleep was little, innovation was key. The next thing I did was study how the miraa syndicates work. Everyone had a role and made his cut and if anyone crosses anyone’s line it was a vicious factional rivalry.
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I arranged to meet the Chairman of the Meru Miraa farmers at JKIA airport. Short and stocky he lectured me about the therapeutic and aphrodisiac qualities of this twig. I still have my doubts as the chewers seem to sleep all day, guess the Ameru and Somali women folk can attest his claims? I tried it once and madam said am below par, guess I stick to fish oil, it has lots of omega-3. It’s now a no-no, I must say. Chairman narrated that for years he had been trying to get KQ to reverse its ban on miraa but it had proved impossible. Racing in my thoughts, I didn’t see why KQ was not doing Miraa yet BA was raking billions from it?
My next point of call was Eastleigh. I now needed to meet the Somalis. The Somali community operates nocturnally. My dad lived in Somalia in the early 90s’ and it was fabulous visiting him. Mogadishu was fairly liberal then. Women there at the time I observed often smoked and though veiled wore a colourful “buibui” or burqa rather than the black ones I see today. On one of my visits to see Dad, there was one young active Kamba gentleman, I met in Mogadishu who was working in an NGO project, he was accused of raping a Somali girl in his pad. To tell you the truth I actually think they were having an affair.
However, the neighbours were suspicious and peeped through his windows and on being discovered she screamed out hysterically “rap” and the crowds came baying for his blood. Luckily, the police saved him before the mob dealt him justice. He landed in a sharia court. The judge sat in high pedestal seat had a gun on his table and was chewing the sacred miraa twigs listening to the deliberations. The young man didn’t understand the proceedings as it was conducted in Somali and often intermittently the judge sporadically rise pressed a gun to his forehead and believe you me, his pants were wet with pee.
Sharia law was being applied and he was sentenced to death. Dad was known in town as Mohamed. He usually wore a white gown. The judge loved whiskey (usually single malt) and they secretly always imbibed the forbidden drink in dads house with a couple of friends. Dad heard there is a young Kenyan lad who landed in jail. The lad pleaded for his help. Dad did help. He organized and the lad paid a ransom of USD 10,000 (Ksh 1million). He quickly smuggled him out of Somalia. Dad passed on in the year 2000 but this guy told me he is forever indebted to him and the lad remains my buddy to date.
Said Barre the (former late President of Somalia) was my late dad’s friend and he too chewed the sacred twigs throughout the night downtown with his security escorts watching and they too enjoined in the chew. One thing I love is when miraa is chewed you are all equal. Dad being this Luo gentleman wouldn’t touch miraa with a 10-foot pole, he often wondered why goats enjoyed it too. By the way, Dad was last Kenyan to leave Somalia when the civil war broke.
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Fast forward back to my visit to Eastleigh, the day starts at 9 pm. They discuss business intensely as they chew miraa, with coffee, Coca Cola and guess what with bubble gum in the mix. How people can do this is a feat I have yet to understand? For me its a recipe for an instant stomachache.
The Somali businessmen were bewildered in my interest and wondered what this man from the lake region who has no clue about miraa be discussing the twigs with them? They were intrigued but they said one thing they liked is that I am neutral as I had no interests in the trade. In the process, I met one elderly Somali lady known as Mama B. In my lifetime If I were to term anybody as a living business machine she was it. She had grown up in Meru area and later moved to Nairobi and delved in the miraa business. He was laid back while all business was done my Mama B. From her, I learnt there are two groups of Somalis in Kenya, the Kenyan Somalis and the Somalia Somalis. Both groups resent each other. The Somalia Somalis are said to be battled hardened and of more grit, determined and shrewder. The Somalia Somalis women are extremely independent and aggressive in business. The Somalia Somalis are the group who are now today revolutionizing business in Kenya.
For reasons not known to myself I get along with Somalis and have spent many evenings till late night in Eastleigh over coffee (imagine not miraa). Mama B hadn’t gone to any school but she said one thing she admired about people from the lake region and she wanted one of her sons to be just like me a corporate don and spot a suit. Mama B had a passion for education, I guess it’s because of the Somali and many African’s cultures then didn’t allow women to go to school (she was in her early 60s), because of her dream she had sent her children to the USA including her daughter for education. Two of them were in the Ivy League Universities. I was was really impressed. She then said she wanted her children to be professionals and not be business people like she had been. I was disappointed in that I know that business flows in the Somali DNA and I want my offspring to be businessmen and not an intellectual like their dad, call it contrarian thinking this is it.
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As a result of these meetings, I secured support from the various Somali factions before the advent of KQ in the miraa business.
My next mission was writing a business case to Kenya Airways CEO Naikuni on how we can handle the business. Writing business cases was my forte and I knew it will sail through, nobody would not see the sense. In the business case, I reiterated strongly that we should adopt the exact same business model that BA had and use the same freighter, General Freighters Ltd. If we did anything contrary it will upset the cartels or syndicates and they will sabotage the airline. I had been on the ground and knew its modus operandi. We as KQ needed to be really careful as we were going to add more cargo space (capacity) on the London route and that would increase the miraa supplies and not everyone would be happy.
Cartels control supplies to keep prices high. Even drug traders in the USA do this, they have to control their turf.
The KQ CEO studied the business case and then gave his go-ahead to restart the airfreight miraa after decades of abstinence, it came with a rider, if anything went wrong with the handling of the miraa my head would be on the roll. Because of the pressure to meet budget targets, I said, I will take the responsibility.
The financials were mouth-watering. Normal vegetables that we carried to London gave us revenue of USD 1.80 per kg (Ksh 180), miraa, on the other hand, delivered revenue of USD 5.0 (Ksh 500) per kg (three times). It was a no brainer.
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KQ started air freighting miraa on a high note. Every week we would air freight 30 tons of miraa which earned the airline USD 150,000 (Ksh 15 million per week). In the first year, KQ bagged KSh 800 million a year from selling miraa freight space. The traders sold the miraa in London at USD 20 (Ksh 2000) per Kg. The value of miraa freighted to London was Kes 3.12 Billion a year. Profits of KQ soared, it was really great. I must really compliment the cargo sales, ramp and operation teams this time round they handled everything well. Everyone faction was jubilant. We had broken BA monopoly on the miraa trade.
As the revenues soared to the skies it got the attention of the top leadership of KQ. Everyone wanted in. The interests started interfering in the business and there was pressure to add another freight forwarder in addition to General Freighters Ltd. I pointed out the dangers of this, adding another freight forwarder would increase rivalry and upset the whole miraa system. I had reiterated earlier in my business case, that let’s not do anything different from BA.
However it was a done deal and it fell on deaf ears. KQ to make things transparent, so they said, tendered out in the media the request for additional miraa cargo freight forwarder. After various forwarders facilities were examined however a Y-Company (a female individual) was brought in. This Y-company was a new freight forwarder which had not much freight forward experience. They had never been in the miraa business at all but even with the dissatisfaction, they emerged the winner and clinched the deal. The miraa fraternity was incensed. They immediately organized to boycott freighting miraa on KQ. The chairman of the miraa farmers who I had met when we both mooted the idea to start the reintroduction of Miraa back on KQ said to me explicitly, the Meru miraa community are livid and will not use KQ. I told him that it was out of my control. KQ had too many powerful interests coveting in.
I was later accused by the KQ top leadership team of inciting the boycott of miraa on KQ as the miraa uplifts declined on KQ.
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Instead of freighting miraa we now began air freighting tons of “fresh air” instead. KQ in its wisdom dropped the miraa rates to USD 3 (Ksh 300) per kg to win the business back. The Meru farmers however still boycotted Y-company, nothing would entice them back. The revenues plunged. The top leadership was infuriated as the profits they anticipated never saw the light of day. Y-company just couldn’t make the crop.
I was fired, as the KQ top leadership was not happy with me. In their thinking, I had instigated the boycott of miraa. The interesting thing is that even when I had left KQ the Meru Community still refused to freight miraa on KQ. Chairman said to me, if KQ wanted a second forwarder they should appoint the Meru Miraa cooperative as a forwarder and not an outsider, after all, it’s them who produced the miraa. Meru Community is one of the most principled group of people I have ever met. KQ refused to budge and remove Y-Company and instead they treated symptoms. Interest at play ended up destroying a great business.
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The whole miraa fraternity started writing letters to the British Government protesting on the miraa logistics, the British Government got tired of listening to the unending squabbles and would move to ban miraa totally in Britain.
This how KQ killed its golden goose and the farmers in Meru still cry today as the miraa trade is a pale shadow of yesterday. Rough and cut KQ bagged Ksh 2 billion over the short time we did miraa. The end result today is KQ lost billions in opportunity cost, farmers lost billions, staff lost jobs.
Amazingly, it’s over 10 years and Mama B and her husband still call me inquiring how I am? Somalis have one trait, they remain loyal friends. Her children have all graduated from the fruits of miraa and are making waves, Mohamed is now a Doctor, Salma a lecturer and Salim an engineer, Mama B now redundant thinks of the past lamenting how her lucrative trade was destroyed, she reminisces everyday and those left behind in KQ today do the same too as they airfreight fresh air.
My Journal, My thoughts My Walk…..
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