Siblings grow drugs firm into Sh1.5bn turnover enterprise

When the late Vithal Patel, the founder of medical firm Lab and Allied, realised that he was in his twilight years, he thought it wise to relinquish control of a business he started in his teen years to a more energetic person.

His successors of choice were his two children, among them Manesh Patel. Manesh’s task was to oversee a business his father started after quitting a marketing job at Evans Medical — a German pharmaceutical firm — and grow it to new heights.

The marketing job gave the senior Patel (he passed on in 2007) experience with drugs, valuable exposure that would later set him on the path to open a business in Nairobi’s Industrial Area in 1972.

He converted a warehouse into an office and, using the contacts he had made when at Evans Medical, set about selling medicine and earning commissions from international manufacturers.

Today, the two siblings whom the late Patel recruited into his trade control a business that has grown to boast an annual turnover of approximately Sh1.5 billion.

“At the time my father was starting the business, he was targeting the local market. Demand for products then was not that big,” said Mr Manesh, current chairman of Lab and Allied.

“My father was operating from a warehouse and, although sales margins were not huge, his desire to succeed was buoyed by the fact that he was really passionate about the sector.”

Manesh cannot recall the initial capital outlay spent on the business located on Enterprise Road.

He joined his father’s business four years after completing his Masters in Business Administration (MBA) studies in Australia. He got his first degree at United States International University.

“Joining this line of work was inevitable for me. I always wanted to do business that has a positive impact in society with employment being the best way of achieving this,” Manesh told Enterprise during a recent interview at his office.

The first types of drugs that the company manufactured were malaria tablets and multivitamins but now the portfolio has expanded to include animal products.

The young Patel says the idea to keep his father’s business legacy has encountered its fair share of challenges. In 2011, he says, the business had to borrow Sh570 million from Habib Bank-Agzurich, a Swiss bank to keep production going.

“This is a capital intensive business that requires a lot of cash to operate. We had no option but to turn to the banks to fund our expansion,” he said. “It was a calculated risk that later paid off by scaling up our business.”

Lab and Allied is currently run by Mr Manesh and his sister Ani Patel. Other investors offloaded their shares in 1998, leaving total control to the two siblings.

Most family businesses mostly fail to break even due to poor management and in-fighting, he says, factors that end up curtailing the growth dream that the founders had. One of the ways to avoid such disharmony, Manesh advises, is to delegate duties to each member of the team.

“We have delegated different roles and the need to work as a team has positively impacted on our business. We are not in competition but are driven by the need to deliver results by focusing on teamwork that comes from the cleaners, storekeepers, drivers, messengers and everyone who works for us,” said Manesh.

Lab and Allied is on course to expand into new markets as it seeks new growth opportunities.

The company currently sells its products to Uganda, Tanzania, Rwanda, Burundi, South Sudan, DRC, Swaziland, Mozambique, Malawi, Botswana as well as Somalia.

It plans to expand to 20 countries within the next five years. The first phase will include countries like Ethiopia, Sudan, Chad, Eriteria, Djibouti, Nigeria and Ghana.

Manesh’s advice to budding entrepreneurs is that they should invest in their passion and also pursue investments they understand well. They should also resist the craving for instant success.

Reinvesting back in the company, he notes, is another etiquette he advises youthful entrepreneurs to emulate, including partnerships with people with whom they share a similar vision.

“There is also the need for diversification. In case one product does not perform well in the market, the rest can sustain the running of the company,” said Mr Manesh.