Business and Finance
‘Be persistent, never give up’: The story of Vimal Shah and Bidco
Kenyan businessman Vimal Shah is one of the region’s most prominent entrepreneurs with a long list of awards behind his name, chairmanships of various industry bodies and a highly-successful company to boot.
Whenever he attends public events, young entrepreneurs mill around him seeking advice and an opportunity to be mentored by the man who transformed his parents’ garment-making business into the largest edible oil manufacturer in East and Central Africa.
Shah is CEO of Bidco Group, the Kenyan-headquartered edible oils, fats and personal care products manufacturer with more than 40 brands. The group has operations in Kenya, Uganda and Tanzania and its products are distributed in 16 countries across the continent. In 2013, Bidco reportedly had an annual turnover of more than US$500m.
That same year, Forbes’ ranking placed Shah as the richest man in East Africa with a net worth of $1.6bn. The industrialist rubbished that and other rankings telling a local paper, for “that kind of money I would sell you my business”.
For Shah, money is not a motivation. Or at least not anymore. He believes everybody is a candle waiting to be lit and that his goal in life is to “energise people”.
“I want to stay MAD (Make A Difference),” says Shah.
“Money motivates you for a certain time, but when your basic needs are met it doesn’t motivate you anymore. My biggest inspiration today is to arouse the leader inside every other human being. I want them to know that they too can achieve their dreams. I was born here. I went to school here. Even for university I did not go to Harvard, I studied here. You too can do it.”
Working in the family garment business
Shah was only 22 and fresh out of university when he joined the family garment manufacturing business. Back then the Shahs imported cotton and made garments that were exported as African prints to Europe.
Although there was still demand for cotton clothing in Europe and the US, in the 1980s the domestic market was challenging for Bidco and other local garment manufacturers.
“Cotton was not in vogue,” says Shah, adding most people preferred polyester imported from the Far East because it is a wash-and-wear fabric that doesn’t require ironing.
To add to the lack of local demand which often led to dead stock that would be sold off at throwaway prices, Shah was frustrated by the way the business was turning into a ‘bank’ for traders. When Bidco delivered garments to local shops they were given promissory notes, not cash. “After 120 days when they were supposed to pay, they would instead ask for an extension of 60 days even if they had already sold the products. We were turning into a bank. We were a credit business,” says Shah.
Entering a new line of business
The family decided to study the entire garment business all the way down to cotton farming. They discovered that when crushed, cotton seeds deliver oil as well as a by-product for making soap. Shah immediately spotted an opportunity to produce cooking oil and soap.
“The demand was higher. You don’t buy a shirt every day. But you buy food every day.”
So they ended the garment venture and plunged into a totally new business. After putting together a business plan, Shah approached banks seeking credit to finance the family’s new oil seeds business.
Although they liked the idea, bankers were concerned about Shah’s lack of experience. “How do you think you will survive?” one banker asked. “Unilever will kill you,” another declared.
The Shahs decided to focus on three things; “start small, aim big, keep at it.”
In 1985 they started with a small soap factory in the town of Thika outside Nairobi, then ventured into edible oils in 1991. Over the years Bidco expanded its product portfolio and in the early 2000s it entered Uganda and Tanzania. In 2002 Bidco outbid rivals to buy four Unilever brands, including the popular Kimbo and Cowboy brands of cooking fat.
Becoming the ‘Unilever of Africa’
Now dubbed by some as ‘the Unilever of Africa’, Bidco is not resting on its laurels just yet. It is expanding into a new product category with a Ksh.1.7bn (about $18.6m) investment in a beverages plant. Bidco’s entry into the soft drinks market will pit it against global giants like Coca-Cola and PepsiCo.
The group’s pan-African ambitions are boldly displayed on the back of Shah’s business card. Bidco seeks to “grab, grow and sustain the number one market share in the African markets by 2030”.
To some it might seem impossible, just like it did to those bankers in the 1980s. Sceptics will always exist, and sometimes you should listen to them, but don’t let their views get you off the track, says Shah.
“If you come with something new today they will give you 100 reasons why it won’t grow. That is why your own conviction is so important. Look at the best case scenario and the worst case scenario. Be persistent, never give up,” is his advice.