Forbes:? this 40-Year-Old Entrepreneur Built A $50 Million Security Firm In Mauritania, Now He’s Chasing Gold
It?s past noon on a blistering hot August afternoon in Dubai Silicon Oasis, but Yacoub Sidya is the picture of cool. Donning dark shades and casually dressed in a grey T-shirt, denim jeans and white sneakers, he is behind the wheel of his shiny, black Mercedes G-wagon, weaving in and out of the city?s grating traffic. To an onlooker from afar, he looks like the archetypal trust fund baby with his?manly?charm and boyish good looks.?But Yacoub Sidya, one of Mauritania?s most successful businessmen, has never had anything handed to him on a platter.
?It?s funny because people generally look at me and see the business we?ve been able to build over the last 15 years, and everyone assumes I had a lot of help from some wealthy relative somewhere, but nothing could be farther from the truth,? Sidya says.
Yacoub Sidya, 40, is the founder of?MSS Security, Mauritania?s largest security company. MSS Security, which he founded in 2003 at the age of 24, is now one of the largest employers of labour in Mauritania, a small West African country with a population of roughly 3.5 million. The company employs more than 1,500 people in Mauritania alone, with another 2,000 spread across Guinea, Mali, Niger, Senegal, Congo DRC and Burkina Faso, while clients include the United Nations, central banks, and several of the world?s largest mining companies with operations in West Africa. Sidya also runs?PPM Holding (Phoenix Precious Metals DMCC), a Dubai-based gold trading and mining company that owns 12 licenses in multiple African countries. He has personally invested $15 million in his flagship Mandiana gold mining project in Guinea which has been in full production since December 2018 and is currently producing circa 30kg per month
Sidya was born in Mauritania in 1978 and was raised by a middle-class single mother in Nouakchott, the capital city. After he acquired his High School Diploma in the country, he proceeded to study Business Administration at the Northern Kentucky University on a soccer scholarship. After college, he worked for Town and Country Sports complex in Northern Kentucky where he did everything from coaching young kids to refereeing games and working the concession stands.
A few months after he started working for Town and Country, a Mauritanian friend of his in Washington DC called him and asked him if he was interested in a job in Telecoms – a field he knew little about. There was an American telecoms company looking to hire a French-speaking employee for a role in West Africa and his friend had recommended Sidya for the job.
The company was Discoverytel, a telecoms service provider headquartered in Hartford, Connecticut and the job the young Sidya was offered was in voice termination. Terminators are those who own VoIP GSM gateways. With the help of this equipment, it becomes possible to terminate calls, that is, to convert the received VoIP signal to GSM format and pay for the international call at the local tariff. The terminator earns on the difference between the cost of international and local calls. Sidya was placed on an attractive salary and worked on a commission basis as well. With his salary and commissions, Sidya was pocketing close to $30,000 a week.
A few years after he joined Discoverytel, the company made a huge investment in a Nigerian subsidiary and lost hundreds of millions of dollars. Neck deep in financial distress, Discoverytel had to downsize and Sidya was cut off. He was 24, jobless, and yet a millionaire.
?I had all this cash on me, and I was always thinking of what to do with my life from there. I was looking for a business opportunity, but in Mauritania, most people are traders. We just import and export stuff, and every trading idea I could think of had already been taken by so many other people,? he says.
In June 2003, there was a coup d’?tat attempt in Mauritania. There was chaos everywhere and for 48 hours Mauritania did not have a functioning government. There were a series of robberies all over the country, and one of Sidya?s siblings was affected. ?My sister had two security guards stationed at her house, and they both robbed her on the night of the coup attempt and they took off with her valuables. So when I visited her and she told me the story, I told her to get a more reputable security company to man her home, but she brought my attention to the fact that there was only one security outfit in town,? he says.
Sidya had been looking for a business idea, and here he was, with an idea his sister had unwittingly thrown at him. After mulling over the idea for a while, he reached out to a Swiss acquaintance in Geneva who owned a security business and offered a partnership. They drew a business plan, invested $200,000 in buying security equipment, hiring office space and hiring and training his first set of security officers. Within a few months, his Swiss partner got tired of working in Mauritania and opted to leave. Sidya acquired all his shares and assumed full control of the company. He named the company MSS Security and he went around pitching to all the big companies in town. He soon secured his first contract with Schenker Mauritania, a major logistics company.
?We got a contract to position security guards at the front of their offices, and that?s how we started. In our case, that?s how many of our relationships with the big-paying clients began. You start by providing them with security guards and then from there they start assigning more complicated security assignments to you. They wanted highly skilled drivers, security cameras, and access control, the whole works. It just takes off from there, but we found that the security guarding business was usually the easiest way for us to get a foot in the door,? he says.
In less than a year, MSS Security had become incredibly popular in Mauritania. The company?s branding stood them out. They had nice uniforms which they sourced from the U.S; they had patrol cars and fancy digital modular radios. ?We were well put together in terms of our appearance, so everyone wanted to work with us,? he says.
A couple of years after establishing the business, MSS Security won a lucrative tender to provide security services for the United Nations offices in Mauritania. It was a large contract that brought in millions of dollars of revenues for the new company and put the company on the map.
?We provided more than 400 security guards to the U.N, and handled different security issues for them. The thing with securing a big client like the U.N is that it gives you credibility, and we got a point where large firms in Mauritania were the ones looking for us. We eventually secured contracts to provide security for the U.S Marines in Mauritania and other major international agencies,? he says.
In 2008, MSS Security was approached by a Canadian junior mining company that owned the prolific Tasiast gold mine, situated 300 kilometers north of the capital of Nouakchott. It was, and still is one of the largest gold mines in West Africa. The owners of the mine wanted MSS Security to provide security services for its executives, transportation services for its gold ores, CCTV installation, aircraft chartering, guesthouse management and eventually gold shipping to international end-users. That was when Sidya?s interest in the gold trading and mining business was piqued.
Many of the junior mining companies operating in Mauritania also owned mining assets in neighboring countries like Mali, Burkina Faso and Senegal. When MSS? clients were content with their services in Mauritania, they handed over their security contracts for their other mines in neighboring African countries. Within 10 years of setting up, MSS Security became of the one largest security companies in West Africa, providing services such as access control services, CCTV, secure logistics, residential security, commercial and industrial security, close protection, and more. From its humble beginnings with just 40 employees, the company had grown to 4,000 employees. MSS was now providing security services to many of the largest gold mines in West Africa, NGOs, large corporations and even Central Banks. The company had annual revenues of more than $50 million.
But success brought its own fair share of challenges. In Mauritania, MSS Security had become so big that it had begun to attract the attention of powerful government officials who were unhappy with the company?s success.
?Mauritania is a small country- roughly three and a half million people, and here we were ? an indigenous company with thousands of security personnel. I think they felt I had too much power and so there were a lot of issues. We were accused of evading taxes; we were given tax bills that were much higher than necessary, and things like that. There was a deliberate attempt to seize the business from me for no just cause,? he says.
Sidya has experienced some dark times in business. In 2014, there were media reports that MSS Security was transporting money for Alpha Conde, Guinea?s President, in a personal capacity. Neither MSS nor Sidya was brought to court or the police for the alleged incident but the negative impact it had on MSS was almost catastrophic. MSS Security had won a tender from the Central Bank of Guinea to transport bulk cash and gold on behalf of the bank from Conakry to Dubai. In 2013, when Ebola hit Guinea, all the major international airlines suspended their services to Conakry. MSS Security had been hired by the Central Bank of Guinea to transport a large amount of cash to Dubai. Since international airlines were not flying to Conakry because of the Ebola, MSS had to charter a plane to take the money to neighboring Dakar, from where it would be transported to Dubai. Unfortunately, when MSS arrived to Dakar with the money, senior customs officials at the airport seized the cargo and claimed that the money was the proceeds of a money moving operation on behalf of the Guinean President, Alpha Conde. ?The allegations were baseless and obviously we had all the paperwork and documentation to prove this,? says Sidya.
MSS? employees presented all of the official documentation and contracts for the cargo to the airport officials to prove that the transaction was legitimate. MSS demanded a letter from the Senegalese customs officials stating that the money was seized ? a letter that was promptly handed over to the Guinean Central Bank and the Guinean government. ?It sparked a diplomatic incident between Guinea and Senegal. The Presidents of both countries were able to resolve the issue and the Senegalese government even apologized and returned the cash,? Sidya says.
But the damage had been done to MSS Security. The news leaked in international media that MSS Security was helping President Conde to move money. He believes competitors sponsored the bad press to attempt to harm his company?s reputation.
?We built our entire business on the trust of our clients and our good reputation. At that time, we were transporting circa $3 billion worth of gold every year out of West Africa as a subcontractor to Brinks, an international company, and the negative press was not something our clients wanted to see. It kept me awake at night and I saw it as a personal attack on my 9 years of hard work. I learned a lot of lessons from this incident and we had to explain the true situation of things to our clients, and explained that the media had false information. We now transport $6 billion dollars worth of gold out of Africa for Brinks and our business is stronger than ever. I passionately believe the media should be more careful to fact check stories because if we had not built so much trust and goodwill with our clients, that incident would have crippled MSS,? he says.
As MSS Security started transporting significant quantities of gold for mining companies, many artisanal miners in Guinea and neighboring African countries started approaching MSS Security to help them sell their gold in Dubai and other international markets. ?There?s a lot of artisanal mining done by uneducated people in remote villages in many West African countries where we do business. As our gold transportation business grew, many of them started hearing about us and would ask us to help them transport their gold to markets where they could find buyers,? Sidya says.
In 2016 Sidya established PPM Holding ( Phoenix Precious Metals DMCC) in Deira, a commercial hub in Dubai, with the clear aim of creating a new West African mining company. Everyday, artisanal gold miners from West Africa and their representatives visit the offices to sell their gold to the company. PPM Holding now sources gold from accredited artisanal miners in various locations/countries in West Africa and exports to Dubai and India. PPM Holding in turn buys the gold, tests it in a lab within its official premises in Dubai, ensures all compliance regulations are met, and then sells the gold to refineries. PPM Holding’s trading house is duly incorporated and registered in Dubai Multi Commodities Center (DMCC) and the company possesses all the required permits for being active in physical and non-physical precious metals services products to an international customer base. ?Today, the trading operations of PPM Holding trade more than $500 million worth of gold annually.
As soon as its gold trading business took off, Phoenix started acquiring mines and mining permits in Guinea, Niger, Mali and Mauritania. On discovering that the small-scale miners in Guinea were digging two kilograms of gold a day, Sidya saw an opportunity in producing his own gold.
?I thought to myself that if we could get some equipment and some science behind this, we could produce more gold. I invited a Geologist friend of mine to Guinea to do a mining survey, and he confirmed that there were significant deposits of gold we could take advantage of. ?I saw an opportunity to capture the whole supply chain and further maximize profits from source to final distribution. Due to our unique business model and our experience in running a valuable secure logistic business we have a significant competitive advantage,? he says.
So far, Sidya has invested more than $15 million of his own funds in exploration on his flagship gold mining asset, a gold mine in Mandiana, a town located in eastern Guinea. The mine is currently producing 30kg of gold per month, which for a self-funded junior miner in Guinea is a decent achievement.
?We?ve had a lot of publicly traded junior miners from Australia and Canada who have come in and gone away and they are not even doing a fraction of what we?ve done so far from one permit,? Sidya says.
The young businessman is looking to scale. Over the next 12 months he plans to deploy another $10 to $15 million into further exploration programmes on the Mandiana mine and upgrading Phoenix?s current mining facilities and equipment. The company also plans to increase its output from 30kg of gold a month to 80 to 100kg within the next 12 months and then begin exploration on the other gold permits to mine gold that it holds in Guinea Conakry, Mali, Democratic Republic of Congo, Mauritania, Ivory Coast, and Niger. Sidya is mulling a listing on the Canadian Stock Exchange in the near future to raise capital to build on those permits.
In the West African countries were Phoenix Precious Metals has trading and mining businesses in, Sidya has been at the vanguard of the fight against child labour in the artisanal and small-scale mines.
?We partner with many of the artisanal miners in providing equipment and training to improve their output. But we tell them that they need to send their kids to school. If they don?t do that, we are not touching their gold, and we will report them to the relevant authorities. Because of that, there has been a significant reduction in the number of children working in those artisanal mines in West Africa. We?re not completely happy with the situation of things, but we?re making good progress,? he says.
Sidya sponsors many children in the mining communities in which it operates in to primary and secondary schools. He plans to sponsor hundreds of children within those communities to school, within the next two years, which he hopes will bring about transformation in those communities. ?When they get educated, they can aspire to bigger things,? Sidya says. ?Then there will be more Yacoubs all over the place.?