Zimbabwe's Zed Koudounaris and Michael Fowler turned a Harare chicken shop into a $1.3 billion empire

In the six months to December, Innscor Africa Limited sold $635.8 million worth of bread, flour, chicken, cooking oil, packaging, soft drinks and dairy across southern Africa. Profit for the period was $55 million, up 64%. The company employs 11,445 people.

It began as a shop selling televisions on hire purchase.

The version of the story that circulates in Zimbabwean business writing has Zinona Koudounaris and Michael Fowler founding the group in 1997, or sometimes 1987, with a chicken and chips outlet in Harare. It is not quite right, and the company itself has said so.

The correction

Innscor's roots run to May 1968, when Michael Fowler's father established TV Sales and Hire, a business selling household appliances to Zimbabweans who could not pay for them outright. Hire purchase was the product. The Fowler family built it into an agency business, taking on foreign consumer brands including Kodak and Cadac.

The Herald addressed the founding myth directly in a twentieth-anniversary assessment of the group. Asked whether Koudounaris and Michael Fowler had set up the company, it answered: partly true. Koudounaris and Fowler's father took the business into food trading in 1987.

That is when Chicken Inn opened.

The 1997 date belongs to the reorganisation that preceded the group's listing on the Zimbabwe Stock Exchange in 1998, not to its beginning. The distinction matters because it changes what the two men actually did. They did not start a company from nothing. They took an existing appliance retailer built by one of their fathers and turned it into a food business, which is a harder and less romantic thing to explain.

Vainona High School

Koudounaris and Fowler had known each other since Vainona High School in Harare.

Koudounaris went on to Rhodes University in South Africa, where he took a Bachelor of Commerce majoring in business and computer sciences. He returned to Zimbabwe and joined the family friend's business.

He has been the public figure of the two throughout. Innscor's own filings describe him as the founder shareholder who was the driving force behind the creation and success of the group's core fast food brands. He served as a non-executive director from April 1996 and became chief executive when the company listed in 1998.

Fowler has stayed almost entirely out of view. He is a founding shareholder and a non-executive director, sits on Innscor's audit and risk, nominations and remuneration committees, and has been a director of Padenga Holdings since 1993. He gives no interviews and appears in the public record chiefly through board listings.

Ninety-eight outlets

The snapshot of the business at listing shows how small it still was.

In mid-January 1998, as the group announced its expansion plans, it operated 98 fast food outlets. Fourteen of them were Chicken Inns. There were 15 Bakers Inns in Harare and 11 in Bulawayo, selling 48 different bakery products from two central bakeries. Steers Zimbabwe had four outlets. Six Mighty Pies shops served the two cities.

The transaction that changed the scale of it was not a restaurant. On January 1 that year, Manufacturing Inns took over all of OK Zimbabwe's bakery production. A group that had been baking bread for its own shops became a wholesale supplier to one of the country's largest supermarket chains overnight.

That is the pattern the next quarter century followed. Innscor kept moving backwards down the supply chain, from selling food to making it, then to making the inputs, then to packaging and distributing them.

The restaurant brands multiplied alongside. Pizza Inn, Creamy Inn, Bakers Inn and Nando's and Steers franchises drove growth through the 2000s, later joined by Galito's. The chains crossed borders into Zambia, Kenya, Ghana, Namibia, Malawi, Eswatini, Lesotho, Mauritius and the Democratic Republic of Congo.

The unbundling

What separates Innscor from most African family conglomerates is that its founders spent a decade taking it apart.

In 2010 the group unbundled its crocodile ranching operation through a dividend in specie and listed it separately as Padenga Holdings. Shareholders received Padenga shares in proportion to what they already held in Innscor. Padenga has since moved into gold mining, a business that now eclipses the crocodile skins it was created to farm, and migrated to the Victoria Falls Stock Exchange.

In 2015 the group did the same with the restaurants. The entire quick service arm was unbundled and listed as Simbisa Brands, which by 2021 operated 513 outlets across nine countries. The brands the two men are best known for building no longer sit inside the company they built them in.

In 2016 came Axia Corporation, which houses distribution and retail including TV Sales and Home, the business Fowler's father started in 1968. The original company was spun out of the conglomerate it had grown into.

Three separate listed companies were created from one, and Koudounaris took board seats at each.

What is left

Innscor today is an industrial group rather than a restaurant company.

Its largest asset is National Foods Limited, a milling business that has operated in Zimbabwe for close to a century and produces maize meal, flour, rice and stock feed. Alongside it sit Colcom in meat processing, Irvine's in poultry, Profeeds in stock feeds, NatPak in packaging, Probottlers in beverages, Prodairy in dairy and Capri in appliances.

The company describes itself as a diversified pan-African management holding company that manufactures, distributes and retails food.

The half-year figures to December 31 show what that produces. Revenue rose 19% to $635.8 million from $535.8 million. Profit from operating activities climbed 56% to $65 million, and profit for the period reached $55 million against $33.4 million. Basic earnings per share rose 66% to 7.04 US cents.

Total assets stood at $885.7 million against $792.1 million at the end of June, with shareholders' equity at $511.6 million and liabilities of $374.1 million. Cash and equivalents came to $50.2 million.

The board declared an interim dividend of 2.35 US cents a share, an increase of 62%, following a final dividend of 1.50 cents in September.

Reporting in dollars

Innscor now trades on the Victoria Falls Stock Exchange rather than the Zimbabwe Stock Exchange, and reports in United States dollars.

That decision is not cosmetic in a country where the currency has been redenominated repeatedly and where inflation accounting has made Zimbabwean corporate results almost impossible to compare year on year. VFEX is dollar-denominated, and a company listed there reports numbers an outside investor can read without adjustment.

Padenga made the same move. Axia and Simbisa are also on the exchange.

The group has not been without criticism at home. Innscor has been accused of contributing to volatility on Zimbabwe's parallel currency market because of the scale of its operations, an allegation reported in Zimbabwean business coverage and one the company has not accepted.

The Panama Papers

The most difficult episode in either man's public record came in May 2016.

Documents obtained through the Panama Papers investigation showed that Koudounaris and Fowler, working through lawyers and accountants, had opened four companies in the British Virgin Islands and transferred money from their Innscor salaries into them in early 2015.

The companies were Federated Properties Holdings Limited, Skyfox, Acia Aero Limited and Acia Aero Holdings. They were registered through the Panamanian law firm Mossack Fonseca and the British accountancy firm Northern Wychwood.

In January 2015, Sophia Birchall, a senior corporate and trust administrator at Northern Wychwood, wrote to Helen Okell, a manager at Mossack Fonseca, explaining where the money was coming from. "Koudounaris is a well-known and successful businessman and is director of a large Zimbabwean quoted group, Innscor Africa Limited, involved in retail and manufacturing industry, hotel and tourism in Southern Africa," she wrote. "SOF is from accumulated salary."

Zimbabwean law prohibits money earned in the country from being deposited offshore without approval from the central bank. VOA asked the then Reserve Bank governor, John Mangudya, whether either man had registered the payments. "According to our records we do not have any approval," he replied.

VOA telephoned both men for comment. Their wives said each was out of the country.

No charges were ever reported, no regulatory finding has been published, and the outcome of the matter remains unclear a decade later.

What they are worth

Both men are routinely described as among the wealthiest people in Zimbabwe, and Koudounaris is frequently valued at around $1.1 billion.

That figure appears in aggregator profiles rather than in any list compiled by Forbes or Bloomberg, and the arithmetic on his most visible asset does not obviously support it.

An investment vehicle owned by Koudounaris has been reported to control 18.7% of Innscor, which had 575,926,450 shares in issue. At the share price recorded in late May, around 130 US cents, that stake is worth roughly $140 million, against a company valued at about $749 million.

He holds further positions in Simbisa Brands, Axia Corporation and Padenga Holdings, all of which were created out of Innscor and all of which are separately listed, so those holdings can in principle be counted. He is also reported to hold interests in farming, mining, real estate and tourism, which cannot.

Fowler's holdings have never been publicly quantified in any comparable detail.

What can be said with precision is what the two of them assembled. Four listed companies where there was one appliance retailer. A restaurant group operating in nine countries. A milling business that supplies a substantial share of Zimbabwe's staple food. Employment for more than eleven thousand people in an economy that has spent two decades shedding formal jobs.

The chicken shop opened in 1987 and is still open.