Wednesday November 15 2017

Savings keep Ojok’s firm on top

Mr Richard Ojok, the founder and one of the

Mr Richard Ojok, the founder and one of the managing directors of Action Construction Company Limited during an interview last week. PHOTO BY ERONIE KAMUKAMA  

By Eronie Kamukama

Most people wonder how top entrepreneurs got to where they are. In Uganda, some say it is just hard to be like local businessman Patrick Bitature. Some say they had rich parents and some will say luck found its way to their doors. I am not sure Richard Ojok felt lucky when he lost his job after a company he was working for, collapsed.
“It was a sole proprietorship company and when the director died it collapsed. I left because there was no business. So I opened my own company,” he says.

Mr Ojok could have looked for another job but the difference between him and his age mates who are still employed by someone, was belief in his experience. After all, he could refer to his knowledge from technical school where he earned a diploma in civil engineering.
“Life had to continue. I already had that knowledge in construction and contract management since I was working as deputy manager and I was preparing all the books,” Mr Ojok says.

Eventually, by the end of 2004, the man who had worked in Lira District Municipal Council in the 1990s was a construction firm founder and managing director. The 50-year old’s brainchild became Action Construction Company Limited, a firm that constructs buildings, manufactures concrete products, supplies furniture and building materials today.
The company located in Lira District took off as a partnership after he sold the idea to his brother, a medical doctor, because he did not subscribe to the idea of sole proprietorship.

Mr Ojok had locked down some savings and with Shs4m, he made his first cement supply at Action Against Hunger. He had a bit of a simple start by constructing temporary structures for some Non-Governmental Organisations (NGOs) during the war caused by the Lord’s Resistance Movement in Northern Uganda.
“Many NGOs would give me small projects like supply of building materials, building some structures for displaced people,” he says. Adverts on NGOs’ noticeboards later became his source of information and he bided religiously for his area of interest.

Growing the Shs4m
Mr Ojok says this money began to grow depending on the contracts won.
“When we would win a contract of Shs10m, we would inject about Shs6m,” he says. The profit made from all the investments is what has made Mr Ojok’s vision a reality.

As time passed by, he was advised about the disadvantages of partnerships and in 2011, he sold the firm’s idea to other two people to form a limited company because he not only wanted the company to survive in his absence but also have a bigger team to provide counsel on the company operations.
To grow the business meant hiring skilled and semi-skilled workers on contract basis who are paid depending on the volume of their work. As of today, the company employs more than 50 people, including site engineers, masons, cooks, foremen and store keepers.

Rising above also meant taking loans to sustain the capital inflows. “There is always a financial problem because a project would come up and you need startup capital. We could not borrow because we did not have any asset,” he explains.
It was a difficult time and the group resorted to pooling money to keep the company afloat.
Surviving in the business given the hard times faced by the construction industry also meant creating a savings culture.

“In business as you work, the target is profit and we have had projects where we get some good profit margin so we kept on investing. But we would spend small, save some and when we would get a larger project, we would use part of those savings to keep on growing,” he explains. Where he got losses, these were compensated by newer projects.
Another problem has been dynamics around labour. He continues to lose good workers to other companies because he cannot employ them a on a permanent basis. Trained employees cannot wait for the next contract, something Mr Ojok has no control over.

Operating as a contractor, Mr Ojok now wishes he could get sub-contracts from multinationals. This would be big boost besides working for World Vision, Child Fund and Habitat for Humanity. The company now boasts of some assets, trucks and a commercial building.
His projects vary and he has done more than 50 since the company opened. He notes that 2016 has been his best year in terms of profit.
“We have a running loan that we shall finish servicing end of this month but you could roughly say about Shs40m,” he says.

Mr Ojok has a lot of confidence that he can expand Action Construction, buy land to build his own office and put up offices that people can rent.
More company lorries would also go a long way in managing his projects that are spread over the districts of Kiboga, Apac and Kiryandongo.
The technician would love to go back to school for a degree in civil engineering to improve competitiveness in bidding for projects. But the responsibility of running a company is still holding him back.
From the start, Mr Ojok dreamt of a company that would progress through action and less lip service. Has he achieved any of it? Driven by quality work, he says, “We are here because we have lived up to this. We are not at 100 per cent but we are trying to achieve it.”

On the sector
The construction sector, he says, has challenges such as unqualified technicians. However, he believes it has potential to transform the country through employment.
His wish is for government to expose its projects to more Ugandans so that local firms can build capacity and have money trickle down to the grass roots.
“Contractors have leased machines but there is no work because local government also has the machines. To reduce this employment problem, government work should be given to locals especially in the roads sector,” he says.