In June 2017, the Permanent Observer to the United Nations Economic and Social Council – the intergovernmental institution concerned with the fight against malnutrition – approached Mutaz Ghandour to become a Goodwill Ambassador to help eradicate hunger in Africa.
Mutaz was initially reluctant; however, his family and his team at Metito were eager for him to join, knowing how much he could make a difference. “Besides,” the Metito Chairman and CEO says, laughing, “they’re saying to me, ‘Oh, that means we’ll be invited next time you meet Angelina Jolie?’ ”
Metito continues to evolve
Even though Metito established its industry pioneer status many decades ago, it continues to evolve with industry firsts today. In 2015, the company was awarded the first public–private partnership (PPP) project to treat water in Sub-Saharan Africa, in Kigali, Rwanda.
“The Kigali Bulk Surface Water Supply PPP project puts Rwanda on the map for the international investor community and marks a historic moment for Rwanda. Together, today, we are setting a precedent not only for Rwanda but for the whole of Sub-Saharan Africa, and surely for Metito. Once complete, this will become an exemplar project for PPPs in the region,” Mutaz says.
“Africa has huge potential, and we expect this to continue as critical infrastructure develops around the provision of key utilities. To undertake such capital-intensive infrastructure projects, the PPP scheme remains the best, and sometimes unavoidable, formula, and Metito acknowledges this. The challenges that may be accompanied by such new business models for us are opportunities in disguise, and we have the ability, willingness and perseverance to face these challenges head-on to help us realise our vision and achieve our goals.”
Concession contracts are when a private company, like Metito, uses its own money to invest in greenfield and brownfield water assets and projects under a contractual agreement with that country’s government for the next 25–30 years. Under such contracts, the company can retain facility ownership, operate it, and provide the needed water against an agreed-upon tariff.
“PPPs allow the private sector to play a more active role and invest in developing capital-intensive infrastructure projects as a way to ease the budget pressure on government, which in many cases means enabling such projects to exist,” explains Mutaz.
“The client – in most cases, the government – then pays the cost of the project on a monthly basis while we provide them with the end product – water – for the next 20–25 years. It’s a win–win for all involved.”
Such arrangements have allowed Metito to work with developing countries in most need of facilities but which might not have the resources to build a water treatment or desalination plant. While the business model has provided amazing results for Metito, the set-up requires plenty of financial backing. Mutaz notes it was critical that Metito continue on a path of growth in order to secure the necessary financial support.
“I realised that to pursue our goals, we need to engage in synergistic partnerships to form a formidable shareholder base, able to grow the business further both organically and inorganically,” he says.
The first shareholder that Metito welcomed, outside the founding Ghandour family, was UAE-based Gulf Capital. It was then followed by other investments by the World Bank’s private investment arm, the International Finance Corporation, followed by Mitsubishi Corporation, Mitsubishi Heavy Industries, and the Japan Bank for International Cooperation.
“Through these partnerships, I realised that having a small share in a bigger company was better than having 100% of a small company,” says Mutaz. “Metito grew significantly and started competing with the main global companies in the field. We have become a global player to be reckoned with.”
Metito grew significantly … we have become a global player to be reckoned with.
Mutaz Ghandour: from Lebanon to London
The journey from a Lebanese family business owner, to water pioneer, to becoming the longest-serving CEO in water and a Goodwill Ambassador has been a very long one, spanning more than half a century. In 1965, Mutaz had graduated from the American University of Beirut and, like many graduates, he had reached a crossroads.
“At the time, there were only two professions that were acceptable in my family. You either had to be a doctor or an engineer,” he recalls. Mutaz initially chose to be a doctor, continuing his studies in pre-medicine. But with a bit of intervention from his brother, Farouk, who was in the early stages of realising a revolutionary business idea that would forever change the way water is provided, first to the Middle East, then the rest of the world, he joined him instead.
Being raised in Lebanon, Mutaz noticed how different in climate the country was compared with the rest of the Middle East. “They call us the Switzerland of the Middle East, even now. We have mountains. We have ski resorts. We have the Mediterranean. You can ski and water ski on the same day. It’s not as arid,” he says.
But Farouk noted the region’s arid climate, and figured that something needed to be done about the water scarcity. Armed with a Master’s Degree in Chemical Engineering from the US, Farouk returned to Lebanon and established Metito in 1958, the country’s (and the Middle East’s) first water treatment company.
Before the business even took off, the Ghandour brothers had a major problem to solve. None of the local universities specialised in chemical engineering or water treatment, so they hired expatriates from the UK.
“At the time, the UK had the best water treatment companies and was the only place where we could lay our hands on engineers who had the requisite skills and were close enough to Lebanon,” explains Mutaz.
The labour issue resolved, the factory became overloaded as business soon began pouring in from all across the Middle East. Then the brothers encountered another problem. Mutaz had a degree in psychology, Farouk in engineering. Neither had any exposure to how to properly structure a business. They hired an American management consulting firm to come to Lebanon and help them structure the company so it could grow on solid, sustainable ground.
“I remember the first thing they advised us was to immediately build a strong financial department because it would be the backbone of the company,” Mutaz recounts. “We structured and built ourselves. In 1971, we became the first company outside the US to design and build a desalination plant using reverse osmosis.”
Reverse osmosis
Even though the reverse osmosis process can be traced back to the mid eighteenth century, the method was unknown outside the scientific community for more than 200 years. Before then, desalting water was simple but costly, bulky, and required lots of maintenance.
It was not until the 70s, when the American chemical conglomerate DuPont developed a semipermeable membrane to separate minerals from water for the semiconductor industry, that all of a sudden desalination for drinking water became a possibility.
“We studied that membrane and it removed all minerals in the sea water samples. Throughout the Middle East, there aren’t many rivers or lakes. It’s only surrounded by seas. And sea water has more than 47 different minerals, most of which is salt,” says Mutaz. “My brother thought we could remove all the minerals from the sea water and use it for desalination to create drinking water.”
At the time, every single reverse osmosis plant installed in the Middle East was designed, built and exported by Metito’s factory in the city of Choueifat, Lebanon. By 1975, the firm had more than 270 engineers and technicians, a factory and engineering centre. Unfortunately, the Lebanese Civil War began, and would continue for the next 15 years, leaving the Ghandours in a hopelessly difficult situation.
“It was very dangerous to even drive to the factory. Our factory was eventually looted and bombed. I was even personally held to ransom for a while, and we couldn’t export to our Middle Eastern subsidiaries,” Mutaz remembers.
With no future in Lebanon, the brothers left everything behind and moved to London. They also established a factory in Houston, hiring the president, vice-president and production manager of one of their main American competitors. London became the engineering, financial and management support for Metito’s subsidiaries, while Houston acted as the supplier for its equipment. According to Mutaz, everything was then “hunky-dory”.
“Moving to London and Houston gave us more access to highly qualified and experienced people,” he recalls. “When we were in Beirut, our horizon was only the Middle East. We couldn’t see further. But once we were out of Lebanon, between Houston and London, the world was our oyster.”
A family business to its core
Mutaz believes three major factors lie behind Metito’s ability to juggle its progressive vision with fulfilling its clients’ needs at sustainable costs and profits. First is the degree of autonomy given to decision making by the senior executives in the firm. Mutaz says not only do they feel empowered; they can also make decisions much faster.
“While we are quite structured and run our company like any large multinational company, we are also entrepreneurial. The family touch is there,” he notes. “When an executive feels they are making the decisions themselves without too much bureaucracy and too many approvals, they feel more a part of the action and more like the owner of the business.”
Second, Metito is fearless when embarking on new ventures. Even though it is now the largest foreign investor in water in China (through its acquisition of Berlinwasser China Holding in 2011), Metito’s Far East ambitions weren’t without a false start. The Ghandour brothers admit they underestimated the need to localise themselves and understand the cultural differences of China in the mid 90s.
“China is a unique market. It’s very big. It’s unique – the language, the culture. Each part of China is different from the others,” Mutaz says. “We learned from that experience and tried again 10 years ago, but this time we succeeded and became one of the largest foreign investors in the water and wastewater sector in China.”
Third, Metito’s people are what Mutaz views to be the company’s main capital and most valuable asset. A family business to its core, Mutaz notes there are employees whose adult children also work at Metito, even though they may be in different departments or different geographical areas.
“When a parent recommends something to his son or daughter, I’m sure they want the best for them. To me, this is very gratifying,” he says. “It only confirms that what we are doing is the right thing. We have strong, confident and very progressive management. The different specialties and diversity of my team gives us the ability to make one plus one equal 11, not two.
No-one can make it alone. And if you believe in something, persevere and don’t give up.
“Metito is 60 years young today and full of experience and financial capability, with a vision that remains unchanged: to be the global provider of choice for intelligent water management.”
“We compete on quality and excellence.”
To differentiate itself from the rest of the field and having the edge, Mutaz says, comes down to simple details such as knowing the strengths and weaknesses of its competitors, as well as understanding the customer base and how to satisfy their needs.
“We never compete on price. We compete on quality and excellence and we have this reputation. We put a great emphasis on our marketing and communications department and update our image continuously. Above all, we try to be the best employer.
“With the gap between water supply and demand regrettably increasing and water security a top priority for governments across the globe, developing new, sustainable, water treatment solutions and technologies that are scalable and low cost can be a game changer.”
Mutaz adds that he couldn’t have achieved the success he has in business without his family by his side. “My family support and their individual success continuously inspires me,” he concludes. “No-one can make it alone. And if you believe in something, persevere and don’t give up.”
Very inspiring story. Great CEO.