The entrepreneurial journey is not for the faint- hearted. Characterized by ups and downs, it calls for a lot of sacrifice, resilience and focus in order to attain the ultimate prize- establishing a successful business. George Gichuki, the managing editor of Biashara Leo (BL) magazine speaks to George Macharia (pictured), the entrepreneur behind Texur Paints, a fast growing midsized manufacturer of exterior textured building paint. He set up the thriving business after battling with a deadly scourge.
BL: What informed your decision to venture into business?
Macharia: In my last regular employment, I had the opportunity to thoroughly understand the size and unfilled gaps of the market related to building decorative paint. My previous experience in the construction industry offered a good network of stakeholders and I was ready to develop a product that would be popularly used in the industry. If you take a tour of new settlements within Nairobi area, you will notice many occupied homes with unpainted external walls. This means that the products available in the market for external walls may not be affordable to many developers. I decided to develop a quality product that is pocket friendly. I would achieve that by setting up a lean business with few fixed costs, but optimal value to the customers. Many giant manufacturers are forced to transfer their high cost of production by charging exorbitant prices to end consumers. Further, in 2018, I started fighting a bruising personal battle against NPC cancer stage 4B. I was therefore forced to slow down and I resigned from one of the leading paint manufacturers where I was the technical manager. After surviving the scourge and considering that I was nearing my retirement age, I chose to venture into a business that I had a technical know-how instead of searching for a new job. Also looking back at my career which started in 1988 as a technical sales representative at the then Sadolin Paints and coupled with my professional qualifications, I noted that I had over the years interacted with major brands locally and abroad. I was also well trained in all aspects of business development in leading companies like Mugoya Construction, Mid Atlantic Coca cola, Chevy Chase bank, G4S Security and Decra Africa. I felt I had what it takes to manage my own company.
BL:Give us a brief background about your business?
Macharia: Texur Paints is a small and medium enterprise (SME). We manufacture exterior textured building paint. Our major market is Nairobi metropolitan but occasionally, we get customers from other counties nationwide. Our mission is to provide innovative, high-quality exterior textured paint which people aspire to have on their homes. We have succeeded in developing a decorative paint with natural aesthetic appeal. We are also gaining good reputation in the market as a producer of quality paint at competitive price. Our management team of three is hands-on and highly experienced in paint manufacturing, hence giving us the much needed competitive advantage. Our support staff of four comprises young high school graduates whom we are training to acquire skills that can help them in future. We support another five older Kenyans who give us various services for our inbound and outbound logistics. Effectively, we have created both direct and indirect employment.
BL: What is your product offering and target market?
Macharia: We specialize in a particular product form used in exterior decorative painting similar to ‘wallmaster’ and marketed under the brand name “Tiktuff”. It is packed in plastic buckets of thirty kilogrammes. The bulk of its ingredients (96% by weight) consist of value added products mined and processed here in Kenya. The balance ingredients (4% by weight) are imported special chemical additives used to improve the paint’s quality to be at par with the international standards. We therefore literally support the Kenya Association of Manufacturers’ (KAM) clarion call: “Buy Kenyan to build Kenya”. Combined with memorable quality of beauty and endurance, our product has many practical advantages that elegantly add value to money spent. We offer a wide range of colour choice that compliment the design of a building. Our paint is able to withstand elements of long-time exposure to hot tropical sun without fading, heavy rains pounding without peeling off and it is resistant to minor scratch and dirt.
Our target market is the emerging middle class of home builders and multi-dwelling project developers looking for a quality product at an affordable price. We pay our customers (especially in gated community housing projects) door to door visits in their construction sites. In the process, we establish footprints that we can later use for third party validation. Slowly, we aim to grow our market share by accepting low margins and doing high volumes.
BL: Have you faced any challenges faced in your business?
Macharia: At the high end of the spectrum, Kenya paint industry is dominated by a few companies with strong brand equity and high name recognition. They charge a premium for their products and they have cultivated loyalty over the years. I believe they rake in good profits that keep them afloat in a very competitive field. Since we have low brand recognition, we face many challenges in penetrating the market. It is difficult to convince new customers to buy from an upcoming SME due to their resistance to experiment with new products. There is a slow adoption process and strong bargaining power by customers who can be repeat-buyers as they often demand terms that we are unable to offer like extended credit. Also, decorative paint is a standard item with little differentiation and its manufacturing process is easily copied. The barriers for entry are low and there are many players attacking same market segment and rivalries among existing firms are high. Established firms have dominated most lucrative distribution channels and they have resources to advertise and mount attractive sales promotion campaigns which solidly lock in their customers. There is high competition on pricing, servicing of existing customers, branding and packaging of finished goods and bench marking is prohibitively expensive. An assortment of finished paint products are being directly imported from abroad and many Kenyans view them as superior.
BL: How have you addressed the challenges above?
Macharia: We counter these challenges by specializing in a small niche market and going directly to our customers. Once we get a chance to sell to a particular customer, we ensure that our quality is excellent and our supply chain activities are exceptionally executed with customer interest at the core. We have adopted a no quibble refund policy in case of unforeseen issues or an excess in the supplied quantities. We also work very closely with consultants in the construction industry and often do technical presentations and demos of our products. When the industry’s stakeholders understand that our product offer is equally standard, they are able to recommend us in their projects. We therefore strongly rely on referrals by word of mouth.
BL:What is the road ahead for your business?
Macharia: The success of construction related enterprises is highly dependent on the prevailing state of the Kenyan economy. Negative effects of a weak economy and the Covid-19 pandemic will be felt for sometime. Nevertheless, the ‘Africa Rising’ narrative is unstoppable. With it, a huge middle class is emerging and their number one priority is demand for good housing and dream living spaces. Decorative paint products play a pivotal role in actualizing the dream of most imaginative homes and buildings. As the demand for affordable housing increases, we equally see a projected rise in the sales of our product. Textured paint as a new concept is in the growth stage of its life cycle. It is gaining widespread usage with a room for sustained growth. We intend to remain in the league of SME and maintain low production costs that will keep our paint affordable to the majority of home builders. Simply, the future looks very bright.
BL:Any tips to young entrepreneurs?
Macharia: Young investors should carry out a professional analysis of the market environment of the field they wish to enter and examine the internal and external appraisal of what they are likely to encounter. For most startup businesses, the launching will be characterized by a negative net cash flow. Nevertheless, most young entrepreneurs want to be overnight millionaires and are therefore likely to fail to navigate the initial stages. Venturing into business cannot be compared to betting and winning a jackpot. It takes time to reach a breakeven point. To build a portfolio will require patience and hard work. A combination of skills may be needed. One strength cannot propel an individual to succeed in many of the ventures. Individually, they should take an audit of their personality traits to gauge if they have the temperament to work on their own without being supervised and if they are ready to handle occasional failures. There is an added advantage to venture into a field where one has previous experience gained by on-the-job training or via internship or by relevant professional training. They should not copy business people seen in their neighbourhood, hoping to equally prosper. The notion that all you need is a nice location, good stock or ambience and a chair to sit on and wait as customers make a beeline to your shop is far from the reality of what drives businesses. It is worth to know that a hardware shop owner may be doing more business behind the scenes as a silent tender expert working supply orders through phone and social media contacts to compliment the walk-in-customers.
BL: Do you have other pertinent issues that you would wish to share with our readers?
Macharia: My take is that the most economical way to build a permanent domestic dwelling house or apartment is to use machine cut stones and then plaster all walls exposed to external elements. The plastered walls should be finished with the best available paint (like Tiktuff). Quarry mined stones attract an extra cost of hiring stonecutters to dress them and developers are likely to be short changed on quantities supplied by brokers. Once the building is ready for the final exterior paint cover, we aim to offer several add-on services at no cost to consumers – top among them being the ones listed below:
- Social responsibility – Affordable housing will only be achieved if the cost of all building materials is driven down by the collective effort of citizens. In our own small ways, we are offering alternative choice and preventing monopoly of the market by a few and the effects of lowered prices in the class of paint we supply are starting to be felt.
- Construction advisory – We aim to guide our customers on the most affordable paint application processes to minimize costs and shield them from exploitation by unscrupulous trade artisans out to make a kill. We have a pool of experienced painters, vetted and tried in several finished jobs that we have been involved in and we can refer them to our customers. Instead of getting a random job quotation out of the blues, we have established a comfortable rate and method for paying the painters based on each of our full thirty kilogrammes bucket that is applied. This may range around Kshs.1, 000.
- Colour selection – While this can be an emotive exercise, out of experience and in-house training, we aim to guide our customers in colour scheme selection that will aesthetically match their finished project to the surrounding environment. We prefer to have less busy-looking final paint job by limiting colours used to a maximum of three shades per building to avoid a shouting rainbow of colours.
- Personalized service – We take great pride in offering superior pre and after sales services. We respond promptly to customers’ orders and other needs. We also ensure timely delivery of small and big orders.
- Business advisory – Although we are beneficiaries of investments in real estate, we do not hesitate to encourage more Kenyans to invest in other fields which might have better return on investment so that eventually, we can all be winners.