Side job proves redeeming for man after retrenchment

Had Nicholas Njoroge ignored the idea to set up a makeshift factory as a part time job, retrenchment would have plunged him into panic and confusion. The Thika-based entrepreneur is behind Alanic Products Ltd, which manufactures hand wash and home-use detergents.

He begun his makeshift factory using a drum and cooking stick as start up tools for the enterprise that would take him nine years to break even.

“I had joined Unilever Kenya as a sales representative in 2000 from Diversy East and Central Africa. After two years, Unilever Kenya embarked on retrenchment and I was among the targets,” said Mr Njoroge, a graduate in chemistry from the University of Nairobi.

“My boss had earlier been dismissed and this became a pointer that a good number would follow. With Sh10,000 that I had saved from my salary, I used part of my house to make detergents targeting local hotels and restaurants.”

This was in 2002. In 2003, the company laid off staff and this time he was among the victims. “My background in chemistry from the university and the experience I had gained while working for Diversy, which used to make detergents for breweries, Coca Cola and high end corporates, came in handy. My mind was to look forward and never get employed again,” said Mr Njoroge.

“In Kenya, we have a lot of brilliant brains; the problem is that we are not sure of ourselves.”

After retrenchment, Mr Njoroge soon dusted himself off and used his contacts to market his business. “All this time, I was still using a drum and a cooking stick to make the products. My strategy has been to start from small to big. Living small does not necessarily make you think small,” he said.

In 2004, with the Sh90,000 he got as compensation, Mr Njoroge relocated to Thika Road, built a small godown made of iron sheets in his backyard and added four more drums.
He was the sole operator as he could not afford to employ an extra hand. Today, Alanic Products Limited has 20 employees.

His firm was new in the market and he was competing with established corporates that included Unilever Kenya, Sudi Chemicals and Canon Chemicals. “My hope was hinged on my former contacts in my previous employment given that people hardly knew our products. For four years, I operated a dry business and in between lost three employees,” he said.

He adds: “In any undertaking, you need a strong, visionary team but they never saw the potential in the new firm.” This forged a hard edge in Mr Njoroge. All he wanted was to see his small company thrive.

In 2008, the business started to pick up when he clinched a supply deal with Naivas Supermarkets for all its branches across the country. He also signed a pact with contract cleaners working for corporate clients to supply them with detergents.

With the progress, space became a challenge and in September, Alanic Products relocated to Thika Town. “I first wanted to create capital to sustain our production. The problem with many startup entrepreneurs is that the minute they start making profits, their lifestyles change and they forget about reinvesting in the company,” said Mr Njoroge.

But he was still doing things manually and could not expand as fast as he wanted for lack of capital.

“It was tiresome work producing 2,000 litres every day. I had made uncountable trips to the bank for possible loans but I had no collateral. I had to think of the next option to survive,” he said. “Here were more orders and manual production could not have catered for the large demand.”

The resilience that helped the entrepreneur survive and prosper can only be traced back to his childhood. He grew up desiring to use formal employment as a platform to raise funds to start his own business.

Production

By 2012, his company had made strides in the market and a bank lent him less than half of Sh2 million he had asked for to automate his production. “They said my collateral only entitled me to Sh800,000,” he said

Unbowed, and with orders pending, he approached a former classmate who offered him Sh1.2 million that he used to automate his business. This cut his staff by half but also saw an increase in production.

Today, Alanic Products boasts of 150 clients with a nationwide distribution network. With the growth, the company has diversified into making car wash and carpet cleaners under the brands Lan Car Wash and Lan Carpet Shampoo.

“Lan Car Wash came up as a result of frequent complaints from car owners who claimed home detergents were making the paint on their cars fade. We saw an opportunity to tap into this market and it has been rewarding,” he said

Mr Njoroge notes that the market has grown but laments that most local retailers are not receptive to selling goods from local producers.

“Penetrating local retail shops is a major challenge to manufacturers because the economy is mainly controlled by the retailers. But it’s advisable to start from what is available and as you progress, people will identify and like what you offer,” he advised.

But Jonathan Ciano, the Uchumi Supermarkets CEO, told Business Daily that most manufacturers fail in their packaging while others do not have innovative products.

“There is a lot of competition in the market and the best way to survive is to pioneer innovation in what you make. Don’t consider making profit first. Patience and invention in anything is very important,” he said.

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