Osho Chemicals: Multinational chemical giant that took 30 years to build

Manoj Shah, founder and owner of Osho Chemical Industries Ltd during an interview in his office located Industrial Area, Nairobi County. [Nanjinia Wamuswa, Standard]

In 1992, Manoj Shah, armed with Sh2 million in savings after losing his job, took a leap of faith in business and started a firm at Nairobi's Industrial Area.

30 years later, his bet paid off.

Mr Shah, the founder of Osho Chemical Industries, now runs a thriving regional firm. His company manufactures, distributes, and markets agrochemical products and farm equipment products, among others

"We're celebrating our growth, from a start-up company in Kenya with four people, transformed through time to a multinational with 600 employees across the region, serving over seven million farmers," he told Enterprise when the firm marked its 30-year anniversary.

Osho is currently present in Malawi, Zambia, Uganda, Tanzania, Ethiopia, Rwanda, and Burundi, and counting.

Shah had been working at erstwhile retail giant Uchumi Supermarkets as the departmental head of food and beverages.

Those days, he recalls, bank loans were hard to access and his uncle had to boost his savings for the business to pick off.

First-ever job

But, his journey in business starts way back. Shah recalls his first-ever job was when he was aged 19-years-old, after his father died, in 1983. He quit his education at Aga Khan Academy while in form five, to take up a job as a filing clerk with Apollo Insurance and fend for his family.

"I had to look for ways to care for my family. Later, l also started my own, and with children getting born, it became difficult to return to school, to date," he shares.

At Apollo, he worked for one year, then joined a friend in an insurance brokerage for four years before joining Uchumi in 1989 and left in 1992 after losing his job.

He started Osho from scratch, importing various raw materials for the textile sector, tanneries, chemicals for pharmaceuticals and paints, and supplying to parastatals like Rivatex, KTM, and Kisumu Cotton Mills (KICOMI).

Shah explains that building the firm's foundation was no walk in the park.

The imports were then regulated by the Ministry of Commerce and he had to acquire a Foreign Exchange Allocation Licence, which he was constantly frustrated at getting. Yet, without it, you had to import through third parties, a costly affair for a business, that was just starting.

To overcome this, Manoj joined organisations like Kenya Private Sector Alliance (KEPSA) and Kenya Manufacturers Association (KAM) which helped in the advocacy of liberalisation of the imports.

"Through our membership, we could now understand problems in various sectors and come up with common solutions. We also had advocacy platform, discussion with various stakeholders, and learned how to make things simpler - remove the burden of extra taxes which we were facing against ready products," he says.

From here, business went on well, and in 1999, Manoj ventured into the agricultural sector, where he imported agrochemicals in bulk from India and China and repackaged them into smaller pack sizes.

Multinational companies sold agrochemicals in large sizes which small-scale farmers didn't want.

"We rolled out small packs and created a niche market for our small-scale farmers. We also came up with a 20-litre knapsack sprayer, now synonymous with spraying in the farms," he pointed out. Shah says the motivation to invest in agrochemicals stemmed from the fact that agriculture is the backbone of Kenya, and for him, it was fulfilling to invest in a sector that is the highest employer.

Also, born in 1964 and raised in Ol Kalou, Nyandarua County, Manoj saw how agriculture is a big industry impacting many lives as it also contributes to food security.

Agrochemicals products being essential in farming, the market responded well.

"During land preparations you need herbicides, then as soon as it rains nutrition is critical, then after rains there come insects and you need insecticides, and because of rain you might also have fungal problems, so you need fungicides. That completes our basket of agrochemicals, that farmers want," said Shah.

As business went on well, Manoj realised that instead of importing formulated chemicals, why not look at the possibility of bringing the active ingredients and formulating in Kenya since it also needed a lot of local value addition. He then started technical registration in readiness for the formulation process.

Tax burden

He explains this came with huge tax burdens.

"When you want to formulate locally, you have to generate a lot of studies, with every crop having its own trials, and at a high cost," he says adding that: "As a manufacturer, the costs are higher because we are being regulated by tens of agencies, with some duplicating roles.

It is the reason, he reiterates, over 80 percent of Kenya's agrochemicals come ready-packed for sale to minimise tax burdens, as compared to manufacturing. Shah says that their production facility is quite basic but the best in East and Central Africa, because nobody wants that tax burden, and so the majority go for ready products with little or no taxes.

The agrochemical entrepreneur felt like giving up every other day, but riding on some success of strong brands like Easygrow he used to import ready, kept him going. Today, Osho has an annual turnover of Sh5 billion with Sh3 billion generated from Kenya.

In the last 15 years, Manoj says Osho has received many offers for a buyout, but declined as he kept spending money on registration, marketing, and positioning.

He also fears the foreign culture that comes with it a buyout. He explains if he partners with an Indian, he or she will come with an Indian mentality yet the Kenyan mentality is quite different.

So what has changed, 30 years ago and today? "The economy, opportunities, and the burden have grown. The pressure of remaining in business is not any harder than it was when l started. However, other things have changed, today access to funds is easy if you have a good business plan."