How entrepreneur finally got it right after three failed ventures

Edgar Kadenge is the founder and Chief Executive Officer of Ekay Ventures. FILE PHOTO | POOL

With the growing appetite for healthy food, Edgar Kadenge saw an opportunity to take a bite of the growing market and launched his latest venture.

"Our aim is to bring back the goodness of nature and nutrition in the market," says Edgar Kadenge, the founder and Chief Executive Officer of Ekay Ventures, a Kitengela based food company specialising in production of peanut butter, honey and flour.

Edgar explains that his entrepreneurial journey started in 2007 when he was working for an NGO in Western Kenya.

Edgar Kadenge, the founder and Chief Executive Officer of Ekay Ventures operates a peanut butter making machine at his Kitengela-based plant. FILE PHOTO | POOL

He wanted something to complement his salary so he teamed up with a friend for a boutique business which they operated for about a year.

Due to the nature of his job, he couldn't monitor the business forcing him to sell it and start a grains transport company in partnership with another friend.

However, they fell out on business principles and ethics.

"After the collapse of the grain venture, I teamed up with another colleague to start an animal feed blending business. But after a year, due to discord in strategies and commitment, we had to close it down," he recalls.

Despite the chain of failed businesses, the holder of Master's in Agriculture and Information Communication and Management never shied off and together with another friend who was knowledgeable on honey value chain, they started an honey packaging company.

They soon hit major cash flow challenges and had to close it down.

Realising that partnership were not working for him and having a substantial amount of money in the failed ventures, Edgar says he decided take all the risks and go solo.

"When my contract with the NGO ended and having interacted with various businesses that we were supporting in setting up milling and honey processing facilities, I could see opportunities and gaps. There was a supply deficit for healthy, original, organic products and that's how I came in with Ekay Ventures," explains Edgar.

To get the business on its feet, Edgar withdrew his pension contributions of Sh1.5 million. He bought peanut butter and honey processing machines.

"My mantra was that I need this money now and not in retirement, I had to take the risk because I was still fairly young."

Edgar Kadenge, the founder and Chief Executive Officer of Ekay Ventures prepares to transport packaged peanut butter. FILE PHOTO | POOL

Edgar says that most businesses and start-ups fail because they are hinged on partnerships with each partner having their own ethical and financial expectations.

"The 3rd or 5th year of a business is called ‘value of death’ because at that stage, they probably have loans and tend to use all the money on fixed assets while still needing to scale up and if they don't get any capital boost, they fizzle out," he points out.

He clarifies that it is easy to register a business but wait until you have to meet all the statutory and tax and realise you have a wrong pricing model due to non- factoring all costs.

"We started processing 1 tonne of peanuts monthly and we currently handling between three to five tonnes monthly,. In terms of honey we started from 500kg and now process five tonnes monthly."

To ensure continuous supply of raw materials, Ekay Ventures has engaged aggregators because they still lack financial muscle to engage farmers directly.

"Due to the high logistical costs, we have to project the raw material requirements we need and begin to accumulate the resources in advance."

In a market characterised by stiff competition from both the big and small investors, Edgar says that two things are working to their advantage.

"The products we take to the market are of the highest quality possible and we guarantee natural product," he affirms, adding that their model is minimum mark up while pushing up volumes.

"We don't want to make a 50 percent mark up on a product, we push volumes and make our products affordable because when you talk of nutrition, you cannot tag it with a niche market but rather a mass market that benefits everyone. We don't segment the market to create price variants," Edgar explains.

Their supply profile consists of over 70 supermarkets in major towns across the country.

Despites having experienced a steady growth since its inception in 2017, Edgar says that the biggest challenge continues to be cash flow.

"You need a very healthy cash flow to serve the 70 supermarkets and delayed payments do not make things any better so it is at this point that we need an investor to pump money to acquire bigger, automated and more efficient machines and bigger space."

The other challenge is distribution model - they have outsourced delivery services to courier companies and this poses the challenge of products getting destroyed on transit and delays in delivery.

"Our market is sensitive and that can kill your business, so we have to be careful on the courier company to use," he adds.

Edgar is quick to point out that he was not born an entrepreneur but has learned along the way largely through interaction with other entrepreneurs.

"My biggest lesson is the choice of people and partners you choose to work with - misaligned expectations and not putting in sufficient research before making an investment. I have wasted over Sh 2 million pumping into dead on arrival businesses," he advises.

He adds that business is like a baby and you have to nurture it until maturity before getting returns and that one must understand what the business and market want and that in your bid to be the best, you may make mistakes in pricing and run into losses.

"I’ve gotten it wrong on product quality, over burnt and under roasted peanuts, inadequately sieved honey and many other costly mistakes, which have been a big lesson on quality checks."

"My medium term target is to get a bigger efficient machinery, bigger space and have the ability to source raw materials in bulk. We also aim to fix our distribution system and create our own logistics system because we want personalized distribution and create more jobs," he clarifies.

He concludes that he is a firm believer in doing the right thing and rewards will eventually follow and that as an entrepreneur don't be in a rush to make super profits.

Edgar Kadenge, the founder and Chief Executive Officer of Ekay Ventures packages honey at his Kitengela-based plant. FILE PHOTO | POOL

"Profits are good but don't let it be the key motivation. Mine is having people consume safe nutritious product," he concludes.

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