Family-run Broadways joins league of Kenya’s top bakeries

Broadways Bakery has for nearly six decades seen its ovens churn out millions of loaves and in the process cement its position among Kenya’s top bread bakers.

Two brothers, the late Sobhagchand Shah and Ratilal Shah, started the company in 1958 as a scones bakery, producing 45,000 every day.

Broadways has since matured, producing as many as 170,000 loaves of bread daily and posting about Sh6 billion in annual revenue.

The company’s success story began with three single-deck ovens which the Shah brothers operated in a small facility in Thika, selling scones within the town and as far as Kitui.

Two other brothers, Dalichand and the late Chunilal, joined the business and in 1968 the four siblings approached Unga Limited (which used to produce Elliots bread) for a distribution partnership.

“The business used to have three vehicles at the time. They were used to distribute the family’s scones and Elliots bread at a commission,” said Bimal Shah, Sobhagchand’s son and Broadways’ current managing director.

Not satisfying market

An upsurge in demand coupled with the fact that Unga was not satisfying market needs saw the brothers set up their own business when the Unga deal ended in 1977.

The siblings bought four acres of land and installed a bread factory which cost Sh15 million, money borrowed from Barclays Bank.

The deal between Broadways and Unga proved invaluable to the brothers as it gave them exposure and helped them create a distribution network that benefited them when their bread hit the market.

The bakery’s production capacity at the time was 70,000 loaves of bread per day and it had a workforce of 100.

“Business was not smooth in the initial years. Sourcing baking flour was especially challenging and we had to rely on our competitor Unga for this commodity,” Bimal said.

Today the factory has a maximum capacity of 240,000 loaves per day, but Bimal said they produce between 60 and 70 per cent of this, scaling it up when demand rises.

The bakery employs 500 people, has 75 trucks that are used to distribute their bread brands across the country through a network of 250 distributors.

Broadways sources wheat both from Kenyan farmers and imports from the USA, Canada, Argentina, Russia and Australia which it also sells to mini-bakeries in Thika, Nairobi and its environs.

The company’s bread brands include New Seneta, Broadways Premium, Broadways Sliced White (the most popular), Sandwich Bread and Broadways Sandwich Bread.

The business is set for a Sh1 billion expansion of the Thika milling plant which will be partly funded by Barclays Bank (Sh500 million) with the rest raised from internal savings. The expansion, which is set to end next year, will double the bakery’s production capacity and comes at a time when Broadways’ biggest rival, Kenblest Group, is also setting up a Sh1 billion milling plant.

Bimal joined the family business in 1979 after attaining a diploma in baking in the United Kingdom.

“I was doing a pharmacy degree course at the University of London but I cut it short and pursued my passion of baking,” he said. “Upon graduating, I returned home and my father and uncles absorbed me into the family business, grooming and mentoring me to take up the mantle when they retire.”

In 2000, the founders retired and handed over the running of the businesses to their children. Today, Broadways is managed by Bimal and his two cousins Hiten Shah and Bejul Shah.

Losing focus

Broadways has however not been relying solely on the bread business. The group has since the 1980s been operating Bakex Millers Limited, a wheat flour miller located close to main bakery. Bakex mills about 250 tonnes of flour per day and sells two wheat flour brands, Oboma and Vitafla.

Five years ago the family sold off Broadway Steel Limited, a subsidiary they had operated for a decade and which used to manufacture nails and steel. The divestiture saw Broadways earn Sh35 million which was ploughed back into the bread business.

“The family realised that we were losing focus on our core business and decided to quit the steel business,” Bimal explained. “We sold the equipment to a steel firm in Uganda and another in Kenya.”

The Broadways Group also comprises of Albizzia Downs Estate Limited, a real estate subsidiary. The company recently sold 50 acres of land in Thika to Safaricom to set up a Sh3 billion M-Pesa Academy to accommodate 1,000 needy students.

Albizzia Downs also recently sold 100 acres of land to Oshwal Community on which the charity plans to build the Oshwal University complex at about Sh3 billion.

“We have sold only 150 acres and we still have 450 left. We are investing on the remaining piece of land but I am not at liberty to disclose the projects,” said Bimal.

Family businesses, he said, are sometimes hard to run. “Different family members have different expectations of the business and the direction it should take. To ensure continuity, relatives should separate business from family issues,” he said.

“That does not mean disregarding their opinion. One should listen to all family members’ views, decide what will sustain the company and adopt it and drop what will kill it.”

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