He quit banking job, now earns big in ice making

On a number of occasions while on duty in the Lake region, Walter Ogada got numerous complaints of fishermen incurring huge losses due to rotting of fish. The fishmongers were not getting enough ice to preserve their fish.

Ogada was then regional manager for Lake region-Nyanza and Western at Cooperative Bank of Kenya. To him, the complaints presented a business opportunity in ice making. “I knew there were people making ice, but it seemed it wasn’t enough. Perhaps, there were many fishermen in Port Victoria since it was the most affected,” he recalls.

This was a big concern because a single boat employs at least 20 people directly and even more indirectly. “I concluded that if fish were going bad, then many people were affected since fishing is the main economic activity in the area,” Ogada told Business Beat during an interview.

He later learned that most ice making machines were locally improvised and could not work efficiently. “Most seem to have improvised following demand for ice. They were characterised by breakdowns and unnecessary stops,” he said.

Determined to venture into ice-making, Ogada resolved to import machines for this trade suited for manufacturing ice and not improvised ones.

From his savings, he imported ice manufacturing machine for Sh5 million. He reveals that purchase of a cold room and structures cost about Sh9 million.

In 2011, he started Mulukoba Ice Plant Company, located along Lake Victoria in Budalangi Sub County and Busia County. “I personally installed the machines, because there was clear training manuals which l understood easily,” he said.

Long to pay

He started with six people to help him operate the machines, but along the way realized the machine needed two people to operate. Today, he hires when demand is high.

He started on a high note. While local machines were taking 12-24 hours to produce 50 blocks of ice, his could make 100 blocks of ice in four hours. This did not go down well with competitors. “My competitors started campaigning against my ice, warning clients that since it was made in four hours its quality was bad,” he narrated.

To counter the negative campaign, Ogada employed agents to educate clients that his ice was good. “I was not compromising on the quality of my ice and knew people will discover it sooner than later,” he said. “The returns in one year were good and justified my investment.” The challenge, however is that some clients were taking long to pay for the ice they took.

His machine can run for 24 hours non-stop when demand is high. In a day, it produces 600 blocks of ice. He says high demand is in the months of September, October and November. A bar of ice weighs 13.5kg and goes for Sh120. When demand is high, he sells 300 blocks of ice. From this he makes a cool Sh36,000 in a day.

He sells to beaches, islands at the lake and refrigeration lorries that ferry fish to various parts of the country.

Ogada’s plan is to cut the cost of electricity by installing solar panels to produce power for his production. “I have already identified solar of 120kw which will cost me over Sh10 million. I am looking for a financier to complete this process,” he said.

Currently, he has two employees on ice making, three marketing agents and a casual labourer. However, he says of late little fish is being caught, hurting his business. Ogada says the other big challenge is unstable supply of electricity.