Entrepreneurs earn from baby food processing

The quality of your infanthood diet will normally play a vital role in determining how you turn out as an adult. It is thus, important to give utmost importance to infant or baby nutrition in order to instill healthy eating habits in the children.

Kampala

The quality of your infanthood diet will normally play a vital role in determining how you turn out as an adult. It is thus, important to give utmost importance to infant or baby nutrition in order to instill healthy eating habits in the children. Experts say if a baby is not fed on proper food, they will usually develop complications which will drain your pockets as you seek to rectify the anomaly.

While it is difficult to arrive at one food that could be labeled the best available for infants on the market; parents spend huge sums of money gambling on imports whose standards are lately doubted due to the growing number of counterfeiters.

In Uganda, there are several companies specialised in producing baby food and have a chain of devoted clientele. East Africa Basic Foods is one of such companies and it’s classified among Uganda’s fastest growing Small and Medium Enterprises according to the 2009 KPMG survey of the country’s Top 100 SMEs. “Participating in the Top 100 SME competition (came with mixed feelings), initially we felt we were not fit, but we later joined the competition reluctantly. To our surprise we were ranked 61st . This has given us courage to work even better and we hope to improve on our ranking in this competition,” Mr Ronnie Kasibante, managing director of the company said. This company started business in 1998, taking over the assets of a company called Africa Basic Foods established in the 60s.

The initial company was owned by an American Doctor who established it (the company) around 1997. He got into financial difficulties and sold the entire business to Kasibante and his other five business colleagues, who revived the operations under a new name. “After we took over all the assets of the company including the machinery, we resumed production of Baby Soya for children and Soya Porridge which were popular then,” Kasibante explains.

Later on, they diversified and introduced other products like; Health Booster mainly for the sick and elderly, Instant Porridge and Hound Meal (food for the Dogs) all products that have become very popular. Every month, the company produces between 80-150 tonnes but this depends on the season. Their biggest customers are schools, NGOs like World Vision, Supermarkets and retail outlets. The company has accounts with Supermarkets like: Uchumi, Nakumatt, Shoprite and also other small supermarkets which consume over 10 tonnes but their main outlets are the small outlets over the country.

On visiting Uchumi Supermarket, the Procurement Manager, Mr Gracious Kakaire says mothers like Baby Soya so much. “We purchase over one tonne of Baby Soya and other products of East Africa Basic Foods Limited every month because mothers like them a lot” Mr Kakaire said. However because of the huge local demand, the company has not yet exploited the export market. They are working with an Irish Company called Traidlinks, which has partners with Uganda Export Promotions Board (UEPB) which encourages local producers who are able to export to such markets.

Mr Kasibante said: “We have plans to start exporting but this will happen as and when we get a UNBS quality mark, which we are working on and hope to get it soon”. However their plea; is for UNBS to set standards must be met by all the manufacturers to protect those who are genuine from the phony ones that are tainting the industry. Onto the export plans, the compny is hoping to start with Kenya, Rwanda and Southern Sudan.

Making money out of feeding babies has not only been this company’s objective but it has too created a permanent employment for at least 52 Ugandans and about 12 casual labourers who do the sorting and cleaning of the seeds as they are brought in by the farmers.

When they took over the company, they were producing less than 20 tonnes and to be able to go to 100 tonnes a month or so; we had to expand and to achieve this, we got a big loan of about Shs390 million from Uganda Development Trust Company (NGO working with ADF-US) at a reasonable interest rate of 13 per cent. “This money enabled us to put up some new buildings and also bought some machinery,” Kasibante explains.

The company which started with Shs120 million investments has since grown to over Shs600 million according to their balance sheet. All the products they produce are pre-cooked before its milled, using an extruder. When a consumer is preparing, it takes a short time to get ready thereby saving on time and fuel. The company sources its raw materials mainly from farmers and traders who collect the maize and soya and bring it to them. They get the cereals from Wakiso, Kayunga, and Mityana. However their biggest challenge has been sourcing for soya, which is not widely grown in the country.

In order to make it available they came up with a mechanism where, the company pays for the good quality soya seeds at 50 per cent and also buy whatever the farmers produce at the ruling market price of about Shs600-1,200.

Distribution of their products is a big challenge to the company and this makes their work more expensive because they have to move door to door. Being a food processing company, the company is struggling to keep itself in the market amongst other players like Maganjo Grain Millers, Sesaco Soya and imports from the Kenya and UK baby food supplements.

“Competition is healthy because the population is given an opportunity to choose but one (should not) move out of business because there are other players in the market,” Kasibante said. He thinks forming an association as Baby food processors will help them share ideas and make recommendations to government to protect them against counterfeiters. Already they are having talks with Nestlé, Maganjo and other Baby food producers to form an association.