Heritage

Luminarc distributor sets sights on a billion

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East African Glass Market CEO Neil Ribiero (left) and head of consumer goods Zulfikar Mohammed toast during the launch of the ‘Winda na Luminarc” nationwide promotion July 18, 2013. PHOTO | DIANA NGILA |

The East African Glass Market (EAGM), the regional powerhouse controlling more than 65 per cent of the glassware and kitchenware market in Kenya, Uganda and Tanzania, and the sole distributor of the Luminarc products is now setting its sights on growing to Southern Africa region starting with Zambia.

Gichuki Kabukuru spoke to the CEO Neil Ribeiro.

You have constantly increased your product range over the years. How much are you spending?

True. Our vision is to have a billion meals enjoyed everyday using our products. Our plan is to introduce two new brands every year to our existing line up of Luminarc (glassware and crockery), Tefal (cookware), Lionstar (plastics), Pinnacle (coolers) SilverSteel (cutlery) among others. 

We have completed discussion to bring in two more affordable brands. The marketing cost of bringing in a new brand and building it to become the industry leader is anywhere between Sh50 million and Sh100 million.  

What makes your products more preferable in the local market? Is the expansion of the middle class an opportunity to your business?

We are known to have an umbrella of quality products, and good quality is the determining factor when it comes to deciding what products and brands we manage. Many retirees in Kenya are using the same Luminarc crockery that they received as wedding gifts and I believe that in itself is evidence of the quality that I speak about.

The expansion of the middle class is definitely an opportunity for our business. Kenyans and East Africans are an aspirational lot, and this is reflected in their lifestyles around the kitchen and dining room.

Explain your investment plans.

We have a fully-fledged factory that makes 10,000 quality sufurias a month under the brand Kitchen King. The investment in this factory was more than Sh250 million. Unfortunately, the market in East Africa is still not big enough to support a factory for glassware. 

A typical glass factory will produce 50,000-100,000 glasses a day and our glasses don’t break easily so this market size is a few decades away. It could come sooner if Comesa truly becomes one seamless customs union. Our future investment plans are to become a pan-African player. 

We will be starting operations in Zambia in weeks, we are aggressively working on setting up in West Africa as well as other central and southern African countries.

Are you considering partnering with other players in the local market to grow your business? If there are such plans, when are you initiating them?

Our route to market is direct for the larger supermarket chains like Nakumatt, Tuskys and Uchumi. We work closely with distributors to ensure that Kenyans in every town access our products. In addition to the promotion we launched on October 24, we intend to carry out regular regional marketing campaigns.

What are the challenges facing your business?

Probably the biggest challenge is increased competition. Though a challenge, we welcome it, as it keeps us on our toes and pushes us to do more to delight our customers. 

In Tanzania, it is a lot harder to get skilled and motivated staff and we estimate about 30 per cent of the Luminarc that you see there either arrived as a parallel import or is an imitation. 

In all three countries, cash flow is always a challenge. We give our established customers between 30 to 60 days credit and we are seeing some of them paying in 90 days. With banks charging us up to 24 per cent interest, giving credit is becoming difficult.