When media reports early this year revealed that baking firm Kenblest Limited was negotiating a Sh1 billion loan with KCB to finance expansion of its Thika-based operation, keen followers of Kenya’s dynamic business scene took in the news with some degree of disbelief.
As far as brand recognition goes, Kenblest is arguably among Kenya’s top – its popular bread (of the same name) having landed on nearly 80 per cent of the country’s breakfast tables. But then again it is just bread – one of the simplest consumer goods to make and the entry bar is not so high.
Yet the bread maker says growth has been steady in tandem with the continuing expansion of the middle class as well as the general population.
Anju Shah, one of the directors, says Kenblest plans to invest the money in its wheat and maize milling plant, raising its production capacity to 300 metric tonnes per day up from the current 200 metric tonnes.
The investment is also expected to generate 200 more jobs in addition to the 700 people already employed. At Kenblest’s base, the three brothers in charge of the operation have kept a modest demeanour about their entrepreneurial achievements.
“Out there it is not possible to really see what is behind these outcomes,” says Anju, the eldest of the trio that runs the business.
This is the product of a successful business succession in a company that was founded nearly eight decades ago when Kanji Ladha Shah established a textiles and general goods outfit targeting the small Indian population that operated clothing stores in Thika.
Located in one of the then little known corners of Thika, Shah Kanji Ladha Company has since walked through a series of transformations and management transitions to become one of Kenya’s most profitable companies with an annual turnover of Sh2.5 billion.
The series of transformations began in earnest in 1962 with the passing away of Kanji Ladha Shah who had long mentored his cousin, Hemraj Sura Shah, to take charge of the business.
As fate would have it, Hemraj also passed on two years later leaving the company in the hands of Mohanlal Dharamshi Shah, who had joined the business in 1950.
Dharamshi , now aged 83, is the chairman of Kenblest Limited – a company he runs with his three sons.
“It was under my father’s tenure as managing director that the business grew by the largest margin and diversified into many areas including food supplies,” said Mayur, another of the brothers. It was the diversification drive that in 1968 gave birth to Thika Household Suppliers – a manufacturing firm that supplied mainly foodstuff to government agencies, schools and hospitals.
Dharamshi introduced Anju, Jinit and Mayur to the supplies business in the 1960s , but only after they showed an interest in pursuing business as a lifetime career.
“He enrolled us in local primary and secondary schools so that we could join him in business and learn the ropes after school. We all attended Gatumaini Primary School in Makongeni, Thika, and later proceeded to Chania and Thika High Schools,” said Jinit.
Anju was the first of the trio to join the business in 1974 when it primarily dealt in corporate supplies. Four years later, Jinit joined after finishing college. Mayur was the last to get on board in 1981 after finishing a diploma in baking course.
Thika Household Suppliers later opened a subsidiary, Anjim Fabrics, on Nairobi’s Biashara Street that dealt in bedsheets, blankets and khangas.
“Years of experience and a strong field presence gave us a clear picture of the emerging market trends that convinced us it was time to enter the baking market,” said Mayur.
In 1982, the eating habits of most Kenyans had started to change as the migration to urban areas intensified. The Shahs decided it was time to introduce a breakfast pack for the newly urbanised – a decision that would see the formation of a bakery division, Kenblest, and spur the company’s growth in the next three decades.
Kenblest initially produced 80,000 loaves per day, but that grew almost three-fold to 230,000 in just four years creating a packaging crisis that was only resolved 12 years later with the establishment of Nav Plastics – a subsidiary that dealt in plastic extrusion and bags.
“We also started producing polythene paper in large quantities targeting the mass market,” said Anju.
The subsidiary got a boost in 2005, with the arrival of new machinery to produce millenary paper bags for both local and export markets. The Shahs also saw a business opportunity in the increasing use of plastic bags in the manufacturing sector and responded to it with the establishment of a recycling plant that produced plastic bags and roofing materials.
In 1993, the baking business had suffered its biggest setback after Kenya was hit by an acute shortage of wheat that almost grounded production.
“We opted to buy inputs very exorbitantly from other manufacturers to survive the crisis. We clearly understood that consumers are very keen on consistency and quality, making it imperative that we cultivate their loyalty even at the risk of suffering huge losses,” said Anju.
In 2006, Kenblest’s total daily production had grown to 330,000 loaves.
Kenblest had earlier acquired the assets of Kenya Taitex Mills, which was in the business of weaving, dying and printing textiles. The company was rebranded as Kifaru Industries Limited and transformed into a Sh30 million water bottling and maize milling unit that produced Acacia water and sifted maize meal ‘‘Two Ten.’’
The subsidiary also manufactured wax paper that it sold to Orange Kenya. Kenblest Limited later opened another subsidiary McNeel Millers Limited to mill wheat flour it used in the baking business and also sold in the consumer market under the “Two Ten” brand.
Mayur admits that it has not been smooth sailing for the family conglomerate, citing Acacia bottled water whose growth has been disappointing in a market dominated by giants such as Coca-Cola with its popular Dasani brand.
The brothers – now in their 60s – say unity of purpose is the bond that has kept the business steady and helped it grow over the decades even as its management changed through generations.
“We argue as brothers in the boardroom for the welfare of the business. We discuss ideas and decide what to implement and what to pull out. All of us understand that we are in serious business. We cannot allow family disputes to destroy,” said Anju.
To ensure long- term survival of the business, the three directors have mentored their sons and daughters to take over the business leadership when they retire.