We've created 500+ millionaires out of Grand Parade's listing.'
HILTON TARRANT: Well, our guest in the Upper Echelon this week is Hassen Adams, executive chairman of Grand Parade Investments, a man who increasingly needs no introduction given that he’s now known largely as the man who brought Burger King to South Africa. Hassen, we’ll get to Burger King but if we go all the way back you are an engineer by qualification, where did it all start? Where did your involvement in business start?
HASSEN ADAMS: Look, I started to work as a technician for an international company and grew from there to become an engineer, whereafter I started my own practice. At the beginning it was called Asch, Adams, Coopers, Saville and Herring [? 40] and that business grew substantially over the years so that we were able to win major awards for doing major contracts in the country. It became a consulting engineering practice where we employed over 100 people. That was the one side of me and then I also founded a company called Proman Project Managers, which was a project management company and we were the consultants or project managers responsible for the introduction of Saldanha Steel. We did the main [UNCLEAR 1:20], which was a very complicated construction methodology but we delivered it successfully. So Proman started to look at the various other commercial projects including the convention centres here and everywhere else and all the Sun International expansion, hotel and casinos and so on, and various other activities. In so far as the engineering company is concerned we’ve done some of the major buildings in this town, Investec’s offices, we’re now doing Portside, which is the tallest structure in Cape Town and various other road infrastructure like the Koeberg interchange and I can go on forever. My philosophy there was that when we started engineering was a business that’s been there since Julius Caesar’s time and we decided to change the whole mindset of our engineers, we said you’ve got to be “imagineers” instead of engineers. The philosophy in our practice was that we don’t provide engineering solutions, we provide business solutions so that we would go to the client together with all the other consultants and say this is the best method and this is the best outcome if you approach this thing in the following way. That was very successful in whatever we did. We’ve done the Sandton Convention Centre, Cape Town Convention Centre, we’ve done the Platinum Toll Road, we’ve done the Maputo Corridor, ag, Hilton, I can go on forever. But my philosophy was a naked in, naked out philosophy, I said that I started this business and it’s all about technology and people with technical ability and if they have it we will promote them to become directors and shareholders and grow with the business. So when I exit the business none of my children will inherit it, there will be nothing left because I would have transferred all of my equity to those who create and maintain this legacy. That’s what’s happening, we’ve now changed the company name to Nadeson Consulting, which is Cape Town-based and the same rules apply and all of those people who worked in the previous company are now working for us.
HILTON TARRANT: Why is it important, Hassen, to keep the equity in the business as opposed to being able to cash out?
HASSEN ADAMS: Look, I am a firm believer that consulting engineering and project management is a man-hour business, okay, it’s a business where you depend on people to execute the function of engineering or project management. So when you manage people in that arena you’ve got to make quite sure that you invest in them and if you do that if you invest in them you must trust them and whilst you trust them make quite sure that you only deal with the fire and not with the smoke because if you start to scratch and start to deal with the smoke you become the employee, not the employer. That’s the philosophy behind all of this. Now if my son or my daughter starts to inherit what I’ve left in the engineering company, and they are accountants and marketing people, what value would they add to the business? The secret about this methodology is that it’s the people who drive the business and the people who work in that business will maintain that legacy. They’ll buy me out over time and guess what, that’s what happened, I’m very happy with it and I can deal with it at arm’s length, I’m hardly involved with the business anymore and I dilute my equity as I go along but it’s still there.
HILTON TARRANT: Hassen, aside from that business and that career you’ve started a number of other businesses and been involved in a number of other business, we’ll get to Grand Parade in a bit but I think of things like Mac Brothers, the catering equipment supplier, I think of things like Cape Town Fish Market, not many people know that you were involved in that from the start. I think of things like the Squires Loft businesses, which you have sold, where did each of these come along? Are you just a sucker for an opportunity?
HASSEN ADAMS: Look, I am an entrepreneur, okay, and if you want to be an entrepreneur like me who is a street fighter you’ve got to understand what you want out of life and when I started I always wanted to deal with various things, whether it’s in the food and beverage sector, whether it’s in the construction sector or whether it’s just purely in the investment sector. Everything happens differently at different times and I can’t tell you that I have set my goals on certain things, it just happened to be on the journey and I would pick it up and I would turn it into gold. If you look at Cape Town Fish Market, when the guys came to speak to me they were looking for an empowerment partner and I said no, if I’m going to get involved I must add value and put my money where my mouth is. That’s how I started with the Cape Town Fish Market and it turned out to be a huge success. Now I don’t want to go into the detail of that because I have a magnificent partner in that called Douw Krugmann and he runs the whole show, I’m not involved anymore in the franchisor side but I’ve learnt a lot from Cape Town Fish Market in the food and beverage side. On the Squires side I met Jaye Sinclair and the same thing applied there, I got involved with Squires, with Leonardo’s, with Bella Gina’s, with Assaggi’s and all of these different brands. We put it together into one vehicle called Squires…it was called, what was it called now, I’m trying to think, I think it was called Sancino or something…not. Anyway, the company housed all of these different types of food and beverage businesses and when I did the deal on the Waterfront with the Arabs in Dubai they wanted to buy out all of these units, which they bought eventually and it started to go under the banner of Retail Corp and they insisted that I chair Retail Corp. Retail Corp then also looked at other businesses in the apparel section and about a year ago I resigned from Retail Corp because it was now running on its own and I had to look for other opportunities. I think about two years ago I resigned and that’s when I jumped and grabbed the Burger King opportunity. Now, look, ja, I’ve met a lot of people on this journey and magnificent people, and Jaye Sinclair was part of the Squires Group, it was called Sansquires, that was the name of the group, Sansquires. Jaye then joined me to head Burger King. So I’ve learnt a lot in the food and beverage side, it’s not something that is easy just to grab and make it work, it’s been a journey where experiences count and more importantly the actual design of the business in terms of execution of product, training of people, etc, etc and that was the most important thing in all of these businesses. When I saw Burger King I knew I was on the right product because they insist on excellence of product and good service. So those were the Squires and the Cape Town Fish Market, etc. The Squires Group was quite a big group with various other brands under it.
HILTON TARRANT: Hassen, the Grand Parade story originally that group was founded and was part of the licence bid, it was a vehicle and then that exclusive licence for the Cape Metropole was granted to Sun West in 1999, how has that relationship and that structure changed over time?
HASSEN ADAMS: Ja, it’s changed quite a bit, when we started we were standing on the twenty-third floor of the old Safmarine building, it’ snow called Triangle House and we wanted to create an empowerment company and I looked down onto the City Hall and I said that’s the name of the empowerment company, it must be called Grand Parade Investments because the Grand Parade - and we were all born in District Six as part of that group - and I said the Grand Parade was a point of convergence for all of our communities where all sorts of things took place, trading, political speeches, religious gatherings, etc. For us it was the Holy Grail and that’s why we called it Grand Parade Investments and we still up until today use the logo of the City Hall as our founding emblem. We then said let’s give it to as many people as possible and without knowing that there was a word called broad-based economic empowerment we just went into communities throughout the Cape Flats and at the beginning we had very close to 20 000 people who came onboard, today we have about 14 000 people as shareholders, and they came in their numbers, put down as little as R700 as a minimum amount from their savings into Grand Parade. Some teachers put in their entire retrenchment packages, unbelievable how they supported us, we raised R28m and then borrowed another R28m again, so that’s how the business started. Now today I can tell you we must have paid that R28m back more than 30 times and from a R28m business we’re sitting with a multi-billion rand business now and we continue to be dividend active every year. We pay dividends and to the extent that all of those guys who put in larger sums of money have made it possible to create more than 500 millionaires out of this initiative. I’m very proud of it and nobody is going to take that away from me, I stand for my community, I stand for what they stood for in terms of our journey and it’s been magnificent how we’ve turned this company around. People when they come to the AGM they want to pray for me and I said no, you’re the people who made it possible. They say they’ve sent their kids to schools, universities and have gone on holidays, built houses and all of those sorts of things out of the dividends that have come out of Grand Parade Investments. I believe I’m blessed because of that.
HILTON TARRANT: Most recently obviously the Burger King, that deal to bring Burger King to South Africa, we’ve spoken a lot about this over recent months and I actually can’t believe it, people are still queuing for burgers down in Cape Town.
HASSEN ADAMS: Ja, look, Burger King was as a result of an invitation I had from Sheikh Mohammed of Dubai, he invited 35 business people to Dubai and I happened to sit next to all of these big guys from all over the world and one of the guys who sat next to me was the vice president of Forbes 500 and the guy on the other side was a big German guy who represented the big dynasty in Germany, he was called Andreas Jacobs who was from the Jacobs dynasty, they own Jacobs Café, they own 20% of the chocolate in the world that is. He approached me and he said look here, his nephew is running with 3G, which is an investment fund or a private equity fund and they bought Burger King from the original owners and they delisted it and they’re now going to rejuvenate Burger King, would I like to bring Burger King to Africa. I said wow, I enjoy when I go overseas eating Burger King, I remember my first Burger King was at Leicester Square in London and I’ve never looked back. I said great, I can do it, it’s only a burger, without realising the complexity of Burger King itself because of their insistence in maintaining quality of product and excellence in service. So Burger King is not about making a burger only and the jobs that we provide there is not about jobs, it’s about making careers, making quite sure that every person there gets the proper training and the product that comes out is consistent with the rest of the world. One thing led to another and then they put the numbers in front of me and I said ooh, I can’t afford this, this is far too much and I refused it. Then they came back and they re-tweaked it a second time and I said no, I’m sorry, can’t make it work. Third time they came back I said, guys, you’re wasting my time, this is South Africa, we deal in rands, not in dollars or in pounds or in euros, you’ve got to talk to me in rand terms and you’ve got to understand one thing – in Cape Town we’re regarded as the gateway to Africa, if you want to go into Africa you must make quite sure that we do it correctly in Cape Town. So they sent the whole team to Cape Town, looked at all my credentials, Mac Brothers, all the food and beverage businesses that I’ve been involved with and they said to me forget about the money, we want you and that’s how it started. Amazing. Everybody said how did you manage to do it, a lot of people have tried to bring Burger King to Cape Town and failed. I said I don’t know, maybe I have a halo on my head and people like me.
HILTON TARRANT: Are you still surprised when you look outside the store there on Heerengracht and you see the dozens of people still queuing?
HASSEN ADAMS: Hilton, talking about Heerengracht, GPI started in a garage, in the late Pieter Swart’s garage and he had a Kentucky above that in Athlone. That’s where we started, no offices, no secretarial support, nothing. I’ve built this company up that today 33 Heerengracht is owned by GPI, it’s an old building that we’ve refurbished, you’ve seen it, it’s a magnificent building in Adderley Street, eleven floors, it’s owned by Grand Parade Investments. Now that makes 14 000 people very proud being the first time in history that people of colour own such a building in Adderley Street since Jan van Riebeeck landed her and below that I insisted we put Burger King. Everybody said to me you’re crazy, it’s the wrong location and today it turns out to be the best location, we’re turning this whole Heerengracht Square into something special. It’s alive with activity, I’ve spoken to the City and we now want to manage this thing so that it becomes also a node in Cape Town with lots of activity. So we’ll clean up Cape Town but Burger King here has been an incredible success, I cannot believe it. I came back from my farm on Saturday and I drove past here and the queue went right round the block. It’s now two weeks later and if you go downstairs you’ll see a queue. I place my order for a Burger King in the morning just to make quite sure that I’ll get it [laughing].
HILTON TARRANT: [Laughing]
HASSEN ADAMS: Anyway, but what can I say, I think that I’m blessed by the fact that we provide thousands of jobs, we embrace thousands of people in terms of all sorts of activities. Burger King is not about the burger only, if you can think about what we’re going to do, I’ve just been visited by the shareholders of Burger King International, that’s 3G, they want me to drive the supply side of Burger King throughout the whole of Africa and the rest of the world if possible if it’s cheaper here than anywhere in the world, from the manufacturing side, to the agricultural side, to the product side. Now isn’t that amazing. If you think about how many jobs we’ll provide, not only in Cape Town but throughout Africa if we start this initiative and we make it work correctly. Now that’s what drives me, Hilton. It’s not about the politics, it’s not about…I do it because I want to do it, not because I have to do it. I do it because I love what I’m doing and when I see the smiles on people’s faces I feel blessed.
HILTON TARRANT: Hassen, just to close off with, outside of business you’ve got a few racehorses, I remember two years ago at the J&B Met you were smiling very, very broadly with Past Master. I was sitting in the stands and an incredible race. Why racehorses? What attracted you to horseracing?
HASSEN ADAMS: Look, many years ago I was introduced to a little farm in Malmesbury and we were not allowed to own farms as people of colour, so it was in the name of this Greek family but I built up that farm to be quite substantial. That’s where my love for horses came in, that was about 30 years ago. Today I’m a substantial breeder of racehorses, it’s my passion, it’s a sport for me and I breed racehorses and I sell racehorses all over the world. For me it’s created a network which is unbelievable. I have friends all over the world, I get invited every year to the Queen’s Box at the Epsom Derby, I get invited to Malaysia, to Dubai, to the World Cup by Sheikh Mohammed and so it goes on. That’s how my business contacts and my networking started to develop and I am grateful to the racehorse industry because I wouldn’t have met these big people who have given me the opportunities. Now, I had Past Master, which won the Met, which is the first time a person of colour has ever won the Met and then I had Gimmethegreenlight who won the Queen’s Plate and that was also a first, and he’s now at stud. I have a beautiful stud farm in Hermanus in Hemel-En-Aarde which is exactly what it is, heaven on earth, it’s a beautiful place. I love the Thoroughbred, I’m a student of the Thoroughbred, I go into deep pedigree analysis, conformational theories, you name it, it’s just an infinite science, which keeps my mind occupied and I love it. I don’t care what people say about my horses and about all the things that you read in the paper, I’m passionate about the animal and so it will stay. In other countries…I went to Saudi Arabia, I went to go and help Prince Faisal and there King Abdullah has got huge tracts of land where his racehorses are, I went to go and see their racecourses in Riyadh and I continue to help them with feed from South Africa, etc. In Dubai the same thing applies, if you look at Dubai they have the World Cup there and we have taken the lion’s share this year of races won in Dubai at the World Cup. Now for me it’s a huge industry that provides a lot of jobs and if we start to export these things and we get the export protocol sorted out it will bring in huge income to South Africa. I love that too, I think it’s something that I’ve been proud to be associated with.
HILTON TARRANT: Hassen, it’s been an absolute pleasure. Hassen Adams is executive chairman of Grand Parade Investments.
Labels: Burger King South Africa, Hassen Adams Grand Parade Investments