How Umoja stepped into big shoemakers' league in Kenya
Dilipkumar Shah (Right), the founder of Umoja Rubber Products during the opening of the 25th store on March 30, 2023, at Diamond Plaza, Parklands, in Nairobi, with Ehsannuzzaman, the managing director of Umoja Rubber Products. PHOTO | POOL
Forty-five years ago, when Dilip Shah started Umoja Rubber Products in a tiny space in Mombasa, he was following in his father’s entrepreneurial footsteps.
Now he has grown the business tremendously, to 45 stores scattered around the country, 3,000 employees, and penetrated the African rubber footwear market.
“I started in a small area of 7,000 square feet, making flip flops with a staff of 22, using imported machinery from Hong Kong and China,” he says.
“We had moved back to Kenya after our family sold off a rubber shoes business in Tanzania.”
In the beginning, he designed the products from the experience he had gained in rubber shoe manufacturing, having worked in his father’s factory in Tanzania, and in Nakuru at Viatu Limited.
His skills and expertise were not acquired in any business school but through apprenticeship. He learned how to handle imports, clearing, and forwarding, and accounting from his father who was then trading in textiles.
Fear of failure at the beginning
Fear of failure stalks the world of the entrepreneur, but not Mr Shah’s world.
“I had nothing to fear or lose, whether I failed or succeeded. Luckily, ABN Amro Bank [which sold its Kenyan operation in early 2000] which had been our family bank since 1951 came in handy. They gave me money to import the machines,” he says.
His strong competitor for flip-flops was multinational footwear, apparel and fashion accessories manufacturer Bata, but he says he used minimum pricing as an entry strategy due to the company’s low overheads.
It also played to Umoja's advantage that at that time, Bata was also hit by an unfortunate fire incident that destroyed its flip-flops shoe factory unit in Kenya and was out of the market for some time.
This gave Umoja an avenue to enter the market in a big way. In 1993, they bought land in Kikambala in Mtwapa and set up a new factory.
The newly-opened Umoja Rubber Products store at Diamond Plaza, Parklands, in Nairobi. FILE PHOTO | POOL
To get the products to the market, Mr Shah started by giving goods on credit.
“This gave me a chance to sell my goods and I was encouraged by that. Fortunately, there were no delayed payments so money started flowing in,” he says.
Like any other start-up, Mr Shah says they faced financial hurdles.
“Finance was the main challenge even though the bank was of help but repayment timing had to be done right,” he says.
Money to acquire the Mtwapa land and develop it was also a challenge. Luckily, the contractor agreed to proceed with the construction on credit, and with the assistance of fellow business community members, Mr Shah achieved their goal of putting up a new factory.
Having single-handledly set the company off the ground, in 1979, Mr Shah convinced his brothers who were then running their own businesses in the United Kingdom to join him.
They joined and brought fresh skills and expertise into the now-family business.
“We had a very good relationship and we are still all together and strengthening the structure of the company,” he says.
Having been under his father’s tutelage for several years, Mr Shah says that the most important lesson he learned is courage, not losing hope, and not taking any profit from the business to your personal bank account.
“Keep the money in the company, grow the company, and create employment,” he emphasises.
Now successful, Mr Shah’s big vision is to introduce new products like canvas shoes. They have already brought in new machines.
“They [canvas shoes} have a good market in Kenya, especially for people working in agricultural plantations. This is where the growth of the company lies,” he says, adding that they now export their shoes to the Democratic Republic of Congo, Japan, and the US, and are targeting Somalia.
“Japan wanted some goods made in Kenya and even though it is small quantities, we are opening their eyes to us. We also sent samples to Germany for approval and were given a green light and we are proud of that,” he says.
Plans of making safety shoes and boots for the disciplined forces are also afoot. The company is also moving to a franchising model.
“We have a very aggressive plan although getting a site at times takes time. We are targeting 25 new shops this year with a similar number in 2024,” says Ehsan Zaman, the managing director.
Dilipkumar Shah, the founder of Umoja Rubber Products during the opening of the 25th store on March 30, 2023, at Diamond Plaza, Parklands, in Nairobi. PHOTO | POOL
Getting investors on board
Many businesses get investors on board to grow further but Mr Shah says, “They [investors] will take all the profits and sell it [part of the business] to someone. So, instead of selling a stake, why don’t you take all the profits and use it to expand and bring in expertise to guide your company on the right channel.”
Apart from Umoja Rubber, Mr Shah also owns Mzuri Sweets, makers of candies, lollipops, chewing gum and long-life cakes, a business he says has tremendous growth potential.
He adds that the family has also transferred all their shares to a holding company, making it strong to enable them to add other companies to their portfolio.
Advice to entrepreneurs
His advice to entrepreneurs?
“Do not hold onto anybody’s money, pay them on time however small or big because they have to run their families, pay taxes promptly, do not hide anything,” he says.
