Kisumu spare parts dealer bets on IT to drive global growth
A worker at Amex Auto Spares in Kisumu. The firm plans to open shop in Nairobi to cut on transportation costs. PHOTO | TONNY OMONDI
What you need to know:
Amex Auto Spares was established in 1988.
For 11 years its growth was limited by several challenges leading to the exit of some of its founders.
Mr Raojibhai’s sons turned the firm’s fortunes around using IT and sales expertise.
When Devesh Patel, 33, took over as managing director of Amex Auto Spares – a mid-sized company in Kisumu – in 1999, the business was still navigating a rocky 11 years of operations.
His father, Manharbai Raojibhai, 61, started the firm in 1988 but it constantly faced challenges including two anchor partners ditching the business at its infancy stage.
Inaccessibility to funding from commercial banks and limited space further choked the business which is today a leading importer and wholesaler of automotive lamps and vehicle body parts in the country.
“I joined my father after graduating from high school. At the time, we had a very small space and nobody was willing to give us a loan to expand,” Devesh told Enterprise in Kisumu.
Things are, however, looking up for the company which stocks parts for 15 car brands including Toyota, Nissan, Isuzu, Mitsubishi, Suzuki, Mazda, Ford, Honda, Mercedes, Daihatsu and Subaru, among others.
The company was the supplier of lamps and some body parts used in the assembly of the cheapest car in Kenya by Mobius Motors. Amex’s key clients include sugar factories in western Kenya, Equator Bottlers, Kenya Pipeline Company and Kenya Airports Authority, among others.
Last year, the company, which started with Sh150,000 seed capital (before two founding partners left), was ranked number 62 in the Top 100 2014 competition – a feat it says has opened doors that were previously closed.
“Banks now come looking for us,” said Mr Raojibhai, who declined to disclose the current value of the business. But the fact that it’s in the Top 100 ranking places its value between Sh70 million and Sh1 billion.
The business’ transformation is mainly attributable to his sons – Devesh (the managing director) and Bhavin Patel who is in charge of sales. Devesh’s wife Sajni Shah, a co-director at the firm, also helps out with the company which is located on Makasembo Road in Kisumu town.
Amex imports spare parts from manufacturing companies in Japan, Taiwan, Thailand, Malaysia and China. Due to a rise in cheap imitations in the market, the company officials said that they import directly since “cheap is always expensive” in the long run.
A survey by Toyota Kenya in 2011, found that at least eight out of 10 vehicles in the country have at least one counterfeit spare part. Most of the fake spare parts, according to the vehicle dealer, originate from South East Asian countries.
Amex accepts orders globally which they say can be shipped to any address worldwide. It has recently partnered with Jumia, e-Bay and Amazon, easing linkage with potential customers and suppliers. These platforms, the company said, have enabled them gain footing locally and globally.
“We have an online catalogue that allows a client to order parts that are compatible with at least 15 car models. It is a one-stop-shop that also allows stock monitoring,” said Mr Raojibhai. “Delivery within Kenya is free on all orders over Sh2,000. Deliveries within Kenya for orders valued under this amount are charged a flat rate of Sh350.”
Strategic location
Devesh, who learnt the trade by hanging around his father since he was eight-years-old, said the company is now positioning itself for growth, adding that tougher days were now behind them.
In 2011, the company acquired a spacious three-storey building for an undisclosed amount of money and moved its business two years later. It was a big step up from the warehouse where the business was conceived.
“The business is now positioning itself for much bigger stakes after we acquired the current shop,” he said.
Mr Raojibhai said that Kisumu is a strategic location for their business since it easy for them to receive and ship products abroad, due to the expansive road network and proximity to Kisumu International Airport.
“The IT investment is another strong pillar of our growth, said Ms Shah, adding that it has helped ease the work for its 25 employees. Amex plans to acquire a central warehouse in Nairobi to reduce the cost of transporting goods to Kisumu and also redirect clients to the location.
“We want to afford convenience to our Nairobi clients. The only deterrent is the high cost of rent there,” Mr Devesh said.
