In the field of entrepreneurship, raising capital is often the major challenge for most beginners. Most aspiring entrepreneurs always complain that they are unable to raise capital to finance their business ideas.
While this is a legitimate challenge, it should not be a hindrance to you pursuing your dream, as the most important thing is to start, regardless of where you start from.
A good example is that of Paul Kinuthia; a Kenyan billionaire who established a multi-billion cosmetics company with an initial investment of Sh3,000.
In this article, NairobiLeo outlines how Kinuthia started and built his giant company known for various cosmetic products including; Nice & Lovely products.
Kinuthia is the Managing Director at Interconsumer Products Limited.
According to information on its website, Interconsumer Products Limited is a Kenyan owned Company that has been in the manufacturing business for the last 20 years.
The company is known for producing Nice & Lovely products and sanitary pads under the All Tyme brand.
How did Kinuthia Start Interconsumer Products Limited?
His entrepreneurship journey commenced in 1995 when he started a small business to supplement his income.
Speaking at a past interview, Kinuthia noted that his initial investment in the company was Sh3,000 with the main product being home-made shampoos.
Back then, his business was housed at a shop along Kirinyaga Road, however, he later relocated to Nairobi’s largest open market; Gikomba.
At this stage of the business, he had no employees and ran all aspects of the business on his own. One of the toughest tasks was to market his products as he had to visit several salons and pitch to them.
According to Kinuthia, it took almost six years for the company to get its footing in the cosmetics industry.
“We broke even in 2001 and that is when I formalized its operations and hired professionals to help run the show,” Mr. Kinuthia told Business Daily.
File image of billionaire businessman Paul Kinuthia. [Photo: Courtesy]
How did Kinuthia manage to penetrate the highly competitive cosmetics industry?
Explaining how he managed to get his products on shelves and in people’s homes, Kinuthia noted that he studied the cosmetic market and discovered there was a gap for quality and affordable products.
This prompted him to price his products at a relatively cheaper price, thus giving him a competitive advantage against other players.
“Kenya is a price-sensitive market and the mere fact that we were able to supply our customers with quality products at relatively much lower prices did it for us.
“Before long, we were drawn into an all-out market share war with the multinationals who had dominated the personal care business for decades,” he opined.
By 2013, the company had grown into a multi-billion company with its sales estimates ranging above Sh1.7 billion with estimated net profits of up to Sh200 million.
Securing Deal with L’Oreal
In April 2013, Kinuthia signed a deal with renowned global cosmetics company L’Oreal based in France.
Kinuthia is reported to have sold a unit of the company for an amount believed to be upwards of Sh1.5 billion.
Opening up on the sale, Kinuthia mentioned that his initial plan was to list at the Nairobi Securities Exchange (NSE), adding that he changed his mind due to many requirements and costs around the listing process.
“I had planned to list the company by 2015 but the stringent compliance rules before and after listing were daunting,” Kinuthia said.
Being a renowned cosmetics company, the deal opened up new markets and helped Interconsumer Products penetrate un-ventured areas.
Interconsumer Products Limited is currently one of the leading cosmetics companies in the country, with its products believed to be commanding a market share of around 30% or more.
