Monday February 5 2018

Kabba went from early retiree to manufacturer in food industry

Impact. National Social Security Fund (NSSF)

Impact. National Social Security Fund (NSSF) beneficiary Peter Simon Kabba shares his food manufacturing journey and how NSSF withdraw benefits pushed his business forward. PHOTO BY Eronie Kamukama 

By Eronie Kamukama

Kampala.

Prior to his retirement, Mr Peter Simon Kabba had ambitions. Born and raised in an enterprising household- adding value to agricultural produce in the springtime of his life, he watched the craft of business that set him dreaming too.
“It is in our blood,” Mr Kabba is convinced.
“I grew up around machines, around trading so my wife and I decided to get into this business. But we were not going to produce posho. We were going to go into specialty foods.”
Specialty foods, according to Wikipedia, are typically unique and high-value food items made in small quantities from high quality ingredients. They range from salad dressing to food spices.
Milling posho sells and so does packaging beans. But according to Mr Kabba, this market was already crowded. More so, when he surveyed popular supermarkets, most specialty foods were imports that a few Ugandans could use with ease.
Years before, the Kabbas, a husband and wife team who founded Kabba Industries Limited in 2012, almost persuaded themselves into producing cosmetics such as skin care creams but halted the project that already had a brand name.
In 2005, they bought processing machines for specialty foods, having agreed in the past that 30 per cent of their salary would be saved and invested into what they needed to start production. They rented a bigger home and installed the machines.
“That contribution was probably exactly 40 per cent of where we are now minus the actual products. That time we had only odii (mixture of ground nuts and sim sim paste). After we got the money, we added our savings, Daily Monitor gave me Shs130m that I used to pay off all bank debts because you cannot go into these things with debts,” he explains the source of his startup capital.
Four years later, they made their first product-spices using a secret recipe from India. They went on to make Shea butter, simsim oil and peanut butter among other products.
The 55-year-old businessman says, for years, they prepared for this first product. They had done research on the market. All they were looking for was an opportunity, the types of products needed on the market and conviction that the market size would be sufficient enough to turn a profit.
As successful as making the first product seemed, they wanted to know if the product was good for the market.
“We paid the marketing cost. We developed the product and paid people to stand near a school, in a market and give the product out freely. They use, give you feedback and you do modifications. We created focus groups of food vendors to tell us about the product,” he explains.
Once they had this market knowledge, they needed money. This became Mr Kabba’s motivation for applying for his National Social Security Fund (NSSF) benefits.

Withdraw benefits
Mr Kabba had worked with several media companies in Uganda, Kenya and Rwanda. He decided to take early retirement in order to kick start his food processing business. At the same time, he received information that Monitor Publications Limited had restructured his job.
“When I clocked 50 years, I got restructured out of my desire because I wanted to go away, he says.
“Because I was officially restructured as an employee and I was under negotiations to go and do something on a contract job, I inquired around and was told I could get my National Social Security Fund (NSSF) benefits since I was not on anybody’s payroll.”
With his state of unemployment and a pipe dream in manufacturing, Mr Kabba started processing his withdraw benefits from NSSF in 2011. The process was very simple, he recalls.
“You do not know the feeling of going to your bank account and you find a large amount of money,” Mr Kabba recounts moments after Standard Chartered Bank had informed him of the cash deposit.
The team immediately bought 13 machines using his NSSF money. They invested 50 per cent of this money in product development.
What some people do not know is that you do not just copy and create a product, Mr Kabba says.
“There is science involved and we did that,” he says.
“We actually hired people who were with us for about one year and a half to get the product.”
However, the challenges of starting the business have been massive, especially when you walk away from a nice paying job where you are called boss, Mr Kabba says.
“I told my wife we were going to suffer for five years and we knew at the end of three years, the money would be finished. At the end, there was a period of about seven months and if you have heard of a bottom of a valley, financially, that is where we were,” he narrates how difficult business was.
Government rules were another issue. Mr Kabba says government attempted to tax the business before it could bear any fruit.
“We were at a stage of developing the product. We explained what you see in the market is for free and not for sale,” he explains the run-ins with the tax body Uganda Revenue Authority.
Kampala Capital City Authority (KCCA) was another obstacle. Garage businesses were prohibited at the time so he was forced to rent new premises.
On the other hand, there was barely any support for budding enterprises in terms of financing and marketing. That is why Mr Kabba approached banks for entrepreneurship training. Determined to make a good product, he went to Uganda National Bureau of Standards (UNBS) for training in safety. Because he deems rent fees a hindrance to growing a startup, he joined efforts to ask KCCA to allow his garage businesses operate.
Fortunately since then, their product line has grown with 13 different items so far. They are in phase two of pushing one product at a time to the market.
“The investment in total now, as you know machines depreciate, is around Shs50m,” he says.
He hopes that by 2020, the company will have generated enough revenue to allow him do a 360-degree manufacturing.
“Look at what Uniliver has done; you want a basin, they have it. You want soap, skin creams or toilet paper, and they are making them, “he explains his future idea.

Advice
“If you make your employer contribute that 10 per cent, please it is free money given to you when you are done and you are 50 years,” he says.

To vote for Peter Simon Kabba in the NSSF Friends with Benefits competition, dial *254# or go to www.nssfug.org.

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