Date & Timestamp : JUL 2013
Posted : admin, 10 July 2013
By John Mulford, Director of RCE
Michael worked as editor for a magazine; now he makes soap. One day he saw an advertisement on a bulletin board for a soap extruding machine. Seven months later, after he had saved some money, he pulled the phone number out of his wallet and called it. Michael asked about the soap making machine. It was still available. Michael asked how much the machine cost. The owner said it cost him $7,500 and wanted to know how much Michael had. Michael said $3500. The owner said he’d think about it. A month went by when the owner called and asked Michael if he still had $3,500. He said, no, only $2,300. The owner said “bring cash and the machine is yours.” He saw this good deal as a sign from the Lord, so he bought the machine.
Michael started the business in a rented house a few hundred yards off the main road. He bought a few pans to heat and mix the ingredients for bar soap. Later he bought a boiler which is heated by a wood fire in the concrete box underneath. The extruder was manually operated, which turned out to be much harder than he anticipated. In fact, they decided not to use the machine which had taken most of their money. Instead, he poured the soap into molds, which introduces more air and impurities.
Because the bar soap process was a struggle and inputs were expensive,they started making liquid soap, which is a cold process. They sold it in five liter jugs and in fancier bottles. Their target market – lower income people – resisted the price and said they didn’t need fancy bottles. One customer brought an empty water bottle and asked them to fill it. Michael started purchasing used water bottles and using those instead of the fancy bottles, which cost more than the cost of the soap they contained.
After operating for a year or two, Michael saved enough money to buy a motor for the extruder. He now makes higher quality soap, and the extruder puts a nice stamp on each piece coming out. Michael uses higher fat content than his competitors which makes his soap usable not just for laundry (the usual use) but also for hand washing, dish washing, and even sensitive tasks like baby bath time. Michael has been investing everything he has into his business.
In telling the story, Michael says he has learned many lessons the hard way. He lost many thousands of dollars to suppliers who didn’t deliver and to chemists who were charlatans before he enrolled in the BDC. He said the BDC has been a God send. “We don’t have mentors in Uganda like the BDC.” Also, the BDC got him thinking strategically about the business. He is now negotiating with a Congolese businessman who wants to order a 20 ft. container of bar soap every month. If he is able to pull together the working capital for these orders, he could be running his factory two shifts a day, six days a week, and earning several hundred thousand dollars per year.
Michael has been in the BDC office almost every day this week. Moses, BDC director, has been working closely with him, encouraging and mentoring him. Pray that all this hard work pays off. Michael has a real heart to serve God through his business. As his business succeeds, Michael wants to give back to his local community and to the BDC to help seed transformation for many years to come.