On return from exile in 1990, Samuel Rugambwa and his wife Margaret were faced with unemployment. They decided to turn their fate around by creating their own jobs.
Determined to succeed, they began by conducting a needs assessment within Kampala city to establish what products were lacking. At the time, the country had just gained political stability and had a limited supply of basic-needs products such as soap and other cleaning agents. The Rugambwa’s decided to start producing cleaning detergents.
Challenges to Starting the Business
They converted their residential home into a cottage industry called SAMEG Chemical Products, the first company to produce cleaning detergents, beyond bar soap, in Uganda. The couple started with initial capital of Ushs 400,000 (USD400), which they had saved.
The marketing of their goods and penetrating the detergent industry became one of the main challenges Rugambwa and his wife faced. They turned to the Business Uganda Development Scheme (BUDS) a component of a World Bank funded Private Sector Competitiveness Project. The Project, funded by the World Bank since 1995 aims to improve enterprise creation and growth of Micro, Small and Medium Enterprises (MSMEs) by raising productivity and improving the quality, standards and reliability of MSME producers participating in export value chains.
As part of the Project, new schemes have been developed to target (i) improving technology; (ii) improving skills; (iii) supporting creation of innovative products and new lines of business by providing grants through a business plan competition scheme; and (iv) improving financial management of MSMEs to help increase their access to finance.
The World Bank’s Involvement in SAMEG
BUDS gave SAMEG a 50 percent refund for the cost of its participation in three regional trade exhibitions, exhibitions that helped the company gain access to the industry and market their products. The program also provided them with a grant to improve packaging and labeling, an effort that helped make SAMEG products more competitive. In addition, computers and financial management packages were provided, improving SAMEG’s business technological capacity.
To-date the Rugambwa’s business has grown by 50 percent, moving from cottage industry to small-scale business. The company produces a wide range of products including detergents, bleach, petroleum jelly, skin care products, shampoos, hand and shower gel. By the end of 2006 their total returns had multiplied to Ushs 400,000,000 (USD400,000).
Because of stiff competition, and the East African integration which brings together five countries – Kenya, Tanzania, Rwanda, Burundi and Uganda under a common market, SAMEG places emphasis on quality production, labeling, marketing, and timely delivery of products nationally and to neighboring countries like Rwanda.
The opening of regional markets poses new opportunities and challenges.
“We need to increase our productivity to meet growing demand,” said Rugambwa. “We need initiatives that can help local industries especially with machinery. It is an area untouched.”
Despite their many successes, the Rugambwas still face obstacles. They hail the government initiative to set up an industrial park at Namanve near Kampala city, but lament not having been able to acquire land there.
“I applied for land in the gazetted industrial park five years ago, with the aim of moving to a bigger facility to make room for expansion, but nothing has come out of it,” said Rugambwa. “My appeal is to government to put protective measures for local industries against foreign products and to provide access to cheaper credit.”