Specialised Towels Manufacturers managing director Douglas Mutugi
(left), Kenya Industrial Estates (KIE) CEO Parmain ole Narikae
(centre), Industry and Trade secretary Adan Mohamed (second right) and
KIE chairperson Rehema Jaldesa during a tour of the factory in
Industrial Area, Nairobi. PHOTO | SALATON NJAU
Summary
- The man who had previously worked at Bank of America and Wells Fargo set out to be Kenya’s Mr Towels.
- STM products received a major boost when Kenya adopted a devolved system of government in 2013 where individual county governments formed teams to scout for quality products that were affordable.
- Mr Mutugi said State-backed Kenya Industrial Estates (KIE) also advanced them a second Sh10 million loan in 2011 that helped them expand their facility.
After living and working in the US for
decades, Douglas Mutugi returned to Kenya in 2011 to take charge of a
towel making company.
The man who had previously worked at Bank of America and Wells Fargo set out to be Kenya’s Mr Towels.
He
had earlier set up Specialised Towel Manufacturers (STM)in 1983
together with his wife Zipporah. Douglas was troubled that while his
product samples were approved for production by local authorities in
Kenya, supply contracts were awarded to foreign companies.
So
he decided to return and grow the business, and take on cartels which
were hell bent on locking out local entrepreneurs from such ventures.
He
said this phenomenon being perpetrated by some unscrupulous briefcase
companies was a major reverse to the government’s affirmative move to
promote local manufacturers under the motto ‘Buy Kenya Build Kenya’
Initiative.
“I have sold towel samples to many women,
youth and disabled people’s companies that were given a 30per cent share
of government tenders, but very few give me the eventual job to mass
produce the items as they fly off to China, Pakistan and India to source
the finished products that at times are of low quality,” he said.
The venture is housed at a government-funded incubator in Nairobi’s Industrial Area.
Mr Mutugi, who worked as a banker in America for a
decade before returning home to manage the family business in 2011 said
STM products received a major boost when Kenya adopted a devolved system
of government in 2013 where individual county governments formed teams
to scout for quality products that were affordable.
“We
had to hire more workers and ran 24-hour shifts to meet demand for
specialised hospital blankets and towels as well as branding
institutional products for our customers. But all changed when some
traders realised they could use our samples to win contracts and then go
abroad to seek cheaper deals,” he observes.
STM, he
said, was among towel manufacturers that had been forced to reduce the
number of employees since all government contracts sourced by local
companies were being executed abroad.
Mr Mutugi said
Kenya needs strict adherence to laid down regulations where any company
importing goods that can be locally manufactured should have their
imported products impounded and their trading licence revoked.
The
MD said the company had outlived many storms since it was formed with a
loan given to his mother Ms Zipporah Mutugi for construction of the
building and purchase of equipment.
The textile
industry, then controlled by established firms was impenetrable and STM
had to rely on wholesalers to distribute their products, but the biggest
breakthrough came when Uchumi Supermarkets expanded its branch network
opening a new avenue for them.
Mr Mutugi said as
multinationals closed shop, STM trudged on thanks to its network of
small and medium enterprise networks who sourced for contracts across
Kenya and ordered for various products at a commission.
STM
has since expanded production to include Uganda and Tanzania supplies
of finished products, but had reduced production of retail ware to
concentrate on production of specialised towels, blankets and bedsheets
for hospitals.
Mr Mutugi said State-backed Kenya
Industrial Estates (KIE) also advanced them a second Sh10 million loan
in 2011 that helped them expand their facility as well as purchase new
equipment.
SKILLS GAPThe KIE was created to support
start-ups, especially in manufacturing, by providing support in the form
of industrial sheds, subsidised credit, and training.
He
said this made them overcome a major challenge in the textile skills
market as textile trainees lack access to modern equipment and are still
using outdated machines.
“The automated machines we
have require skilled personnel and we now apply the apprenticeship
training model where we select students from the Textiles Institute who
train on the job before returning to their college to graduate with an
artisans certificate.
He said that the towels’ market
needs strict surveillance by anti-counterfeit agency and Kenya Bureau of
Standards inspectors to ensure no counterfeit or substandard products
are sold in the retail market.
STM currently employs 30 permanent worker and outsources more labourers when orders increase from time to time.
It
produces 10,000 pieces every month made up of a mix of towels,
blankets, bed covers, bed sheets and pillow cases. Each product range
comes in three varieties – entry level, mid quality and premium.
Hospital
linen products – supplied to health centres across Kenya - account more
than half of the business, Douglas said in an interview.
A
high end bath towel costs about Sh850, face towel (Sh90), cotton
blanket (Sh1,600), cot blankest (Sh750), bed cover (Sh1,500), bed cover
(Sh1400), bed sheet (Sh975), and pillow case Sh250.
jkariuki2@ke.nationmedia.com
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