After Conquering E. Africa, Bidco Wants To Lead Africa In Soap, Edible Oil

After Conquering E. Africa, Bidco Wants To Lead Africa In Soap, Edible Oil

For a man heading family-owned Bidco – an East African empire built from scratch – it is surprising that Vimal Shah of Kenya spends so little time working there.

“I give probably 20 percent of my time to work,” says Shah.

Up to 70 percent of his time, he says, goes to “work outside work” – contributing to organizations such as the East African Business Council, the Kenya Private Sector Alliance and the Kenya Association of Manufacturers.

Shah is CEO of Bidco, a soap and edible oils manufacturing company based in Kenya but with operations in three other East African countries – Uganda, Tanzania and Rwanda. The company is the market leader in its manufacturing segment in Kenya, and commands a significant share of the market in the other three countries. It sells its products in 16 countries around Africa.

Having conquered East Africa, Shah now plans to make his brand a leader throughout the continent. “Bidco is going to go all over Africa,” he said. “The goal of Bidco is to grab, grow and sustain number one market share in the African market by 2030. It is not just about East Africa.”

He plans to do this, he says, by maintaining the strong growth that has kept the manufacturer ahead of competitors. Today, the firm produces 700,000 tonnes from its plants in the four East African countries where it operates.

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“I sit on university boards, a foundation in Nigeria, the Mauritian National Advisory Board, and various other bodies. I go out to talk to people at very many conventions,” says Shah.

The little remaining time is spent with his family.

Speaking on the sidelines of the annual general meeting of East African Business Council held in Arusha, Tanzania, May 31, Shah was humble. At the meeting, he was elected chairman of the organization, this being Kenya’s turn to take the mantle. The organization’s chairmanship is rotational. Shah took over from Uganda’s Gerald Ssendaula.

Shah’s election in Arusha marked only the latest feather in his cap, coming soon after his election to the chairmanship of Kenya Private Sector Alliance.

“I don’t have ambitions to say I want to become chairman of this or that, these things just come my way,” he said.

Shah, who insists on being recognized as “an indigenous African,” comes from a family with a long history of association with East Africa. His great grandfather first came from India to Madagascar, and then moved to Mombasa in Kenya.

Born in Mombasa and educated at the Allidina Visram High School, Shah’s father had to drop out for lack of school fees. He later worked as a clerk at the port in Mombasa, then migrated to Nyeri with his four brothers, where they started a business. He bought a gas station opposite the White Rhino Hotel.

In the 1970s, there was a policy for Africanization of businesses and many Indians in Kenya were forced to leave. Duncan Ndegwa, a former governor of the Central Bank of Kenya, bought the gas station, Nyeri Auto Service, from the Shah’s father.

Born in 1960, Shah studied in Nyeri then moved to Nairobi where he attended the U.S. International University, graduating with a bachelor of science degree in business administration.

Then Shah joined the American Life Insurance Co. He says he it was difficult to sell insurance to people.

“When you tell them their families will need some money when they die, they tell you to go home. Nobody believes they are going to die,” he said.

Among his father’s various businesses was a garments and textiles factory. To complement the garment factory, Shah suggested going into cotton farming.

“Along with cotton farming you get cotton seeds, and these are crushed for oil and the remainder goes to animal feed,” Shah explains. “When we charted out the whole value chain on the lint side and the seed side, the seed side became more attractive, because we were at that time affected by cheap imports of polyester from the Far East and cotton was not in vogue. We also had the mitumba (second-hand clothes) imports, so the lint side was not attractive any more. The credit period for textiles was up to six months, while on the seed side we were looking at consumer products with a daily demand, so maximum credit period would be 30-60 days.”

Based on that, the family decided to go to the oil value chain, produce edible oil, and on the side get some animal feed. They would also get products for making soap. The family then went to banks to seek funding. None of the banks came forward. Shah said the banks felt the huge multinational firms would eliminate the local company and the project would not be viable.

The banks were wrong.

Not about to give up, the family approached the International Finance Corp., which said it was a good idea but the family needed to raise 40 percent equity.

“We didn’t have any money, so the only option was to start small,” says Shah. “We decided to go into soap manufacturing in 1985, with a factory in Nairobi called Bidco Industries, with a view to go from soap to oil, then oil refining, then packaged products, then go back to crushing seeds, and after this go backward into plantation farming and do animal feeds at the same time. That goal was set up in 1985. We started soaps and since then we have never looked back. It is 27 years now and we have been following this same vision.”

Shah, his brother and father started the company. The investment capital was about $8 million, mostly borrowed from friends, family and bankers. They started in Kenya with a production capacity of about one tonne per hour, which translated into 20 tonnes per day, or 6,000 tonnes per year.

Along the way, Bidco Oil Refineries acquired the Unilever plant which manufactured the popular Kimbo and Cowboy brands of cooking oil. The firm also bought out a manufacturing plant from Unga Ltd. that manufactured another popular product – Elianto liquid cooking oil.

The firm moved into Uganda in 2003, where it acquired a 20,000-acre plantation on Kalangala Island and planted its first oil palm trees there in 2005. The company also set up a plant in Jinja, which has started production.

“We had zero market share in Uganda. Today, we have about 49 percent share in the edible oil and soap markets,” Shah said.

Many successful business owners end up moving into politics. Shah says that’s not for him.

“I am not getting into politics, and that’s very clear,” he said. “They had proposed my name for being cabinet secretary in Kenya and I was all over the papers. I am not going into politics. I am not interested, because I don’t believe I am a citizen of one country. I want to be able to talk to everybody. I talk openly and I become brutally honest about issues.”