Tuesday November 19 2013

Agaba's success with leather products

Agaba's success with leather products

Mr Joseph Agaba shows off some of the shoes he makes at his workshop in Kitintale. Photo by Abubaker Lubowa. 

By Faridah Kulabako

Although it takes courage to start business, especially when one has inadequate capital, entrepreneurship could be the only sure way of creating yourself a secure job.

In an era where your job contract could end prematurely, Joseph Agaba saw it fit to try his hands at entrepreneurship after he failed to secure a job at Bata where he had applied for a job after attaining a certificate in advanced shoe making.

“I thought I would get a job with Bata since I had technical training in shoe making but the manager kept on saying that he would call me. After several attempts, I decided to start a small-scale shoe-making firm to earn a living,” Agaba tells Prosper in an interview recently.

Thus, Agaba Shoe Makers was born in 2003, operating in Kitintale market, a Kampala suburb and it has made major strides in the local shoes making industry.

However, Bata, which Agaba wanted to work for, closed its production line in Uganda in the 2004, relocating to Kenya, leaving hundreds of its former workers jobless.

Meanwhile, Agaba who then felt disheartened after failing to get a job with the company has 10 years later made a breakthrough in the shoe-making business, with his products reaching the country and beyond.

Agaba says his secret is in the quality of the products he puts on the market.

The Kitintale market-based small scale firm produces a range of products, including casual shoes, children’s school shoes, women and men’s sandals, wallets, bags and belts, among others.

He started the business with Shs500,000 as capital, which he saved from his pocket money while still at college.

With those savings, he bought a few inputs required in the production of shoes such as soles, a piece of leather and other small things.

Agaba narrates that when he had just started, his production capacity was just a pair a day. He sometimes lacked capital and had to wait for customers who would make orders in order for him to get a deposit, which he would use to buy the raw materials to make the shoes.

He says, “I started small. Apart from the brain and knowledge of making shoes, I totally had nothing. But today, our products speak for us. Quality is our specialty and we will continue to focus on it.”

Today, his production capacity has increased to more than 20 pairs of shoes daily and his business is now estimated at about Shs50 million.

According to him, the venture on which he thrives is destined for enviable heights.

He now boasts of various kinds of tools and machines which he uses to produce the beautiful shoes and sandals.

The price
At Agaba Shoe Makers, a pair of gentle shoes costs between Shs50,000 and Shs80,000, depending on the type and grades of materials used, Shs35,000 to Shs45,000 for children’s school shoes and Shs18,000 to Shs30,000 for sandals.

Belts, on the other hand, range between Shs20,000 and Shs25,000 while wallets cost between Shs15,000 and Shs20,000.

With exception of a few pairs that are exported to South Sudan, Agaba mostly sells his products in Uganda to individuals and wholesale customers.

He also supplies a few supermarkets in Kampala.

Agaba adds that when Bata closed its local production line, the famous shoe maker partnered with him to manufacture Bata branded shoes for sell in Bata shops around the country, although the partnership has since ended.

How he plans to improve his business
Joseph Agaba intends to save especially in tangible assets, rather than physical cash because he finds it difficult to leave his money lying idle in a bank account.

“From the little money I get, I ensure that I save something in form of cattle or any other tangible asset. I now have 10 cows and intend to grow the kraal to more than 100 heads of cattle so that when I want to expand my business, I sell off a few cows and fulfill my goals,” he notes.

Agaba also intends to start branding his products to create an identity as a local brand.

Currently, the firm sells unbranded shoes, which some traders in town buy and put a ‘Made in Italy’ label because of the good quality.

“We got the idea from the recently concluded Uganda Manufacturers Association trade fair and we want to create that distinct brand in the market,” he says.

Keeping the business afloat
Maintaining quality of the products has helped Agaba to stay afloat on the market that has many other small-scale players.

“I will never compromise it [quality] for anything. It’s what determines whether a customer comes back or not; people move long distances to come to Kitintale to buy my shoes,” he says.

Although Agaba’s father wanted him to pursue a teaching course, he (Agaba) opted for shoe-making because that is what he wanted.

“I love making shoes from the bottom of my heart, even when my father threatened not to pay my school fees after Senior Four if I didn’t pursue teaching as a profession, I told him I would survive,” he says, adding that he does not regret the decision he took over 10 years ago.

What has he achieved from the business?
Within 10 years, Agaba has achieved a lot and says a lot more is yet to come, pointing to a brighter future.

Apart from being a means of survival, where he earns a daily income to look after his family, Agaba has bought a few other machines used in the production of shoes including two stitching machines and one squaring machine.

The firm has molds for various shoes, although most of the work is done manually.

In addition to his achievements, he has constructed a family house in Kampala, bought a farm in his home village in western Uganda and has also built an up-country family house.

Joseph Agaba says the business has had its ups and downs, mainly stemming from price instabilities, which he says change abnormally and affect business.

“The price of leather has more than doubled from Shs2,200 per square feet to Shs4,800 which is very high. This has forced us to increase the price of the finished products although we would have wanted it to be cheaper,” Mr Agaba notes.

The steep rise in the raw materials is attributed to the high tax on imported leather.

Many small local leather manufacturers import most of the raw materials used in the production of leather products because of limited local supply.

Mr Robert Bam Musisi, Footwear and Leather Goods Manufacturers and Exporters Association (FLEMEA) secretary general, recently echoed similar sentiments saying that local leather products-manufacturers are constrained by limited supply of leather.

Despite having eight tanneries in the country, only one – Leather Industries of Uganda – processes hides and skins up to finished stage, ready for use in the local market.

The other tanneries semi-process hides and skins to the stage of wet blue for export.

The plea to government
Mr Musisi, however, says government should also ban exportation of wet blue [semi-processed] hides and skins so that have all tanneries process to the finished level.

“A lot of money flies out of the country to import leather from Ethiopia, Kenya and Rwanda because we can’t get enough supplies locally. This adds to the cost of doing business and price of the final product. It will be great if we are using local leather because it is of better quality,” he notes.

Mr Musisi also demanded that government considers exempting local leather products manufacturers from paying tax on imported accessories and components used in manufacturing leather products to boost the sector.

Production capacity
Available statistics from Uganda Bureau of Statistics show that Uganda’s leather tanning industry produces about 1 million pairs of shoes, out of the 25 million pairs consumed in the country annually.

In a similar move, Agaba asked government to create jobs in the leather industry for the jobless.

Advice to potential entrepreneurs
Agaba advises youth who hit streets searching for jobs “not to waste their time,” rather they should start small businesses in areas they are passionate about.

“You can start a business with very little savings, people need to save more from the little money they get and invest the savings because jobs are not easy to come by these days,” he says, before cautioning the would-be entrepreneurs not to expect big profits within a short time.