As the world's biggest scaffolding mogul, new billionaire Mohed Altrad frames Europe's skylines. As a Syrian-born Frenchman, he demonstrates that, in the wake of the Charlie Hebdo tragedy, a path to an integrated society lies in entrepreneurship
Mohed Altrad received the Legion of Honour, France’s equivalent of knighthood, in 2005
Mohed Altrad doesn’t know how old he is. No document recorded the day he was born into a Bedouin tribe wandering the Syrian desert. To make birthdays easier, his children recently picked March 9 out of a hat. As for the birth year, he had to choose one when he came to Montpellier, France, 46 years ago to start a new life—1948 sounded about right. Altrad didn’t speak French back then and survived on just one meal a day. He didn’t know a soul.
Today his name is hard to miss in Montpellier. It repeats at least a dozen times across the undulating silver walls of the city’s rugby stadium, recently rechristened for Altrad and his eponymous company. From his owner’s box, Altrad, bundled in a navy blue coat that complements his graying curly hair, gazes down at the seats below that often hold a crowd of 15,000. “It’s strange,” he says softly. “Normally people only have their names on things when they’ve passed away.”
Civic duty called. In 2011, Montpellier’s mayor reached out to its richest resident, asking him to ensure the survival of the financially struggling 29-year-old Hérault Rugby, and so Altrad, who had never even been to a match, stepped up and bought the squad. Now the new owner goes to every game, as a red pin proudly accents his navy blazer, a symbol of the Legion of Honour, France’s equivalent of knighthood, which he received in 2005.
Altrad is France’s Horatio Alger story. He overcame those extremely humble beginnings to build the Altrad Group into one of the world’s leading scaffolding providers, with revenues exceeding $1 billion. Scaffolding, a low-tech industry that traces its roots to ancient Egypt, is as close to a commodity as it gets. But Altrad gooses net margins, which Forbes estimates clock in around six percent, in part by providing everything from cement mixers to wheelbarrows, and he has expanded aggressively through acquisition. After a quarter-century of steady revenue and profit growth, Altrad saw its sales double over the past five years, making his stake (he owns 80 percent of the company) worth an estimated $1 billion—and securing his spot as a new member of the Forbes World Billionaires list.
Altrad’s scaffolding graces construction and industrial sites in more than 100 countries, including the United States. But the majority of Altrad Group’s clients are in Europe, with the largest number of those in France. Which makes him, and his billion-dollar fortune, something of a beacon in a country still saying “Je suis Charlie”. In the wake of the Paris massacres in January this year, France faces some existential questions: Who exactly is French, and how can this storied country better integrate its sizeable (and still largely poor) Arab population?
Altrad offers a path forward. Greeted with anti-Arab epithets when he arrived—the Algerian war for independence fresh on the minds of his new countrymen—he learnt French so well that he’s become an acclaimed novelist. He then built a global company inside a country that knows its wheezing economy needs an entrepreneurial jump-start—a company, incidentally, that plays a role in maintaining French architecture, something as close to the national soul as baguettes and Bordeaux. Altrad hasn’t been to Syria since 1972, when he visited his estranged father. “I quickly realised that I can’t go back.” he recalls. “To where? My ticket was one-way.”
“If you read articles about me, they always say, ‘He’s French of Syrian origin’.” He pauses. “Why do they need to say that?”
Altrad rarely talks about his past, and it’s easy to see why. When he was around four years old, his teenage mother fell ill and died. His father, a powerful tribal leader who had raped her, disowned him. And Altrad’s only brother, who lived with their father, died from abuse. Young Mohed was raised by his grandmother in a tent that moved with the tribe, following the rains that created oases of grazing land for their goats, sheep and camels. Altrad’s grandmother refused to let him go to school, insisting that shepherds had no need for books. He attended anyway, sneaking away before she woke, walking barefoot for an hour across the dunes. Getting an education was worth bearing her wrath, he believed, not to mention the constant taunts of classmates. He was an outcast even by Bedouin standards.
“It was an instinct,” Altrad says. “I knew that I was condemned, and my only chance was school.”
When he was seven, Altrad’s father reappeared long enough to buy him a bicycle, a rare treasure in the desert. In his first entrepreneurial venture, he rented out the bike to other young boys and used the money for school supplies.
A few years later, he went to live with another relative near Raqqa, now the headquarters of the so-called Islamic State. He earned a baccalaureate, graduating first in the region and earning a scholarship from the Syrian government to study in France.
“I had no special dream at the time,” he says. “Only the ambition not to accept my initial destiny.”
Image: Laura Stevens for Forbes
Mohed Altrad’s novel Badawi was well received by critics and won a literary prize in 2003
In 1969, Altrad arrived in Montpellier, a city near the Mediterranean that sits at a midpoint between the borders with Spain and Italy. He spent a few months learning French, but when he started his studies in physics and math at the University of Montpellier, he could understand only one-tenth of what the professors said. By the time Altrad moved to Paris in the early ’70s to earn his PhD in computer science, he had become fluent enough to meet and marry a Frenchwoman who was also at the university. While studying, he worked as an engineer for technology firms, which helped him qualify for citizenship.
He later spent four years in Abu Dhabi, working for the national oil company. With low taxes and not much to do, he was able to save several hundred thousand dollars by the time his contract ended in 1984. Back in Paris, his three friends and he founded and quickly sold a startup that made portable computers. Altrad netted almost $600,000, but he had no idea what to do with it.
In August 1985, while Altrad was on a holiday in Florensac, his wife’s native village in southern France, a neighbour asked if he would be interested in acquiring a failing scaffolding manufacturer. The 200-person firm, Méfran, was bleeding several hundred thousand dollars a year, and debt to the banks was piling up. Though he didn’t know the industry, basic accounting principles or even the French word for “scaffolding”, Altrad decided to buy the company with Richard Alcock, a British friend from Abu Dhabi who’d been a partner in his computer startup. They paid one French franc—and assumed a slew of liabilities—with Altrad owning 90 percent.
“It was an intuitive thing,” Altrad says. “I saw that the product was very useful, since you need scaffolding in every sector: Construction, refineries, airports.”
He immediately cut costs and layered in more incentive-based pay, methods the French workforce bought into because the boss had serious skin in the game. “I told the people that I was putting in all the money I’d earned in five years. They thought, ‘He believes in us’.”
Within a year, the company was making a small profit and launching subsidiaries in Spain and Italy. “He never talked about his ambitions,” Alcock recalls. “The goal was just to get bigger.”
That aim quickly met roadblocks. Altrad decided to diversify by buying a French company that made surgical gloves. “Very quickly, I understood it was a mistake,” he says. “One of our strengths is to be really focussed on our core business.” He sold the firm, branching out instead into concrete mixers, construction tools and other products that attract the same customers as scaffolding. Then, during the recession of the early 1990s, the fledgling company lost a quarter of its revenues in six months. What saved it, Altrad says, was that he’d seen the downturn coming half a year earlier and cut 30 percent of the workforce.
Emerging from the crisis, Altrad found that banks wouldn’t lend to a Syrian-born entrepreneur without industry experience, regardless of what the balance sheets said. So Altrad had to grow in the same manner that he had started in the business—buying smaller competitors in distress for very little cash and then slowly wringing new efficiencies from them. “I struggled a lot in the period,” he says. “And wasted a lot of time because they didn’t trust me.”
A turning point came in 2003. By then his company had a solid base, with 21 subsidiaries bringing in $130 million. It made its biggest acquisition yet, scooping up well-regarded German competitor Plettac. The purchase gave Altrad Group continent-wide visibility and positioned it to compete for industrial contracts, as well as move more aggressively into higher-margin offerings, such as leasing and installation services. Consolidation across Europe followed, with Altrad averaging three acquisitions a year. Every single one, he claims, has ended up being profitable.
Altrad Group’s headquarters sit on a narrow alleyway in a sleepy, residential neighbourhood in Montpellier; the CEO decided to relocate to the first city where he truly felt at home, establishing one of the largest companies in the country based outside Paris. The offices are a short walk from Altrad’s century-old mansion, quaintly dubbed “Le Cottage”. He has three swimming pools, and a Ferrari and Lamborghini are parked side-by-side in the yard. The company’s staff is installed in what were once servants’ quarters. Altrad’s office used to be the stables.
The bucolic setting seems implausible for the headquarters of a firm with 1 million customers and 7,000 employees. Only 25 people work there, and Altrad doesn’t even have an assistant. He says the company’s success has much to do with this decentralised structure: A streamlined holding company and semi-autonomous subsidiaries. When he buys a company, Altrad imposes a minimum of rules, leaving most of the workforce and culture intact.
“I love freedom and want the people working for me to be free,” he says. “We agree on something, and it’s up to everybody to do it in his own way but coordinating with others.”
Altrad’s aversion to hierarchy is spelt out in the company’s 605-page charter (featuring both French and English), which sometimes reads like a manifesto. But it works. The subsidiaries, which now number 92 globally, operate like agile, entrepreneurial businesses, each with its pulse on the local market, while also tapping the cash, products and cost efficiencies of a multinational.
It’s a formula that’s been fuelled by a $100 million investment, four years ago, led by a French state-owned fund. Since 2011, the Altrad Group has made 22 acquisitions, including firms in Qatar and Morocco, with the intention of rolling up as much of this worldwide business as possible. The US may be next: Altrad, which has just a small sales office here, says he’s negotiating a significant acquisition, though this market, which has entrenched competitors and favours less-expensive Chinese scaffolding, could prove tougher. Either way, Altrad says not to expect a public offering, which would impinge on the corporate freedom he cherishes.
Says his old partner Alcock (who sold out in 2008): “I can’t actually see him ever letting go.”
As an executive, Altrad takes transparency literally. Two of the walls in his office are floor-to-ceiling glass, so employees see him when they get to work. Sunlight spills over coral walls and a spacious tile floor. His desk chair is almost throne-like, with black leather and ornate gold trim. A heavy chandelier hangs from the ceiling. The regal display is grounded by dozens of family photographs, featuring his five children and his partner of 13 years, a British-French lawyer (he and his wife divorced in 1995).
The only sign of his past is a book framed on the wall. It’s a novel he wrote called Badawi (‘Bedouin’), published in 1994 and revised in 2002. “Largely, it’s true,” says Altrad. Badawi is less a celebration of the rags-to-riches success than a story about the pain of being caught between two worlds. He often writes before dawn, when he can’t sleep. “Sometimes life is difficult,” Altrad says. “Some people do sports, make love or drink. I need to write.” It was well received by critics and won a literary prize in 2003. In 2012, the Academy of Montpellier recommended the novel for its curriculum in regional schools.
“It’s a true piece of literature,” says Françoise Nyssen, director of Actes Sud, his Arles-based publisher. “He’s smart enough to realise that life is about something deeper than just making money and modest enough to know that literary success can’t be bought.”
Altrad’s two later novels, framed alongside the first, aren’t exactly lighter fare. One explores whether god exists, and the other is about love. The latter ends with a story about Jews and Palestinians—a tale that carries extra poignancy for France, given the renewed rise of anti-Semitism there, especially from members of the Arab community. Altrad, who rarely talks about his faith and says he doesn’t know whether he considers himself a Muslim, recalls that his Syrian schooling taught him that he should hate and strive to kill Jews. It’s an experience he’s long reflected on.
“If you believe that there’s incompatibility, that’s a real disaster. That means men cannot live together. That means war. This is just not human,” he says. “If you want to live in peace, just start talking.”
It’s an outlook that his countrymen would do well to embrace. “When you’ve known solitude, suffering, hunger, humiliation, there’s potential for extraordinary development,” says François Léotard, a former French minister of culture and of defence, who counts Altrad as a friend. “I think he’s had a sort of revenge on his youth. If the group continues to grow, and it will, it’s because for a man of the desert, there aren’t any limits. He always looks beyond the horizon.”