INVITE features one of the businesses under the EFS, which benefited from the BDS on Export Market Intelligence – Market Identification and Segmentation. Ms Enid Natukunda Mugisha, proprietor of Raw and Organic, and the proud winner of the 25th East African Community (EAC) Micro, Small and Medium Enterprises (MSMEs) Trade Fair, manufactures hair and skin products from shea butter. Ms Mugisha began her business after suffering premature loss of hair due to traction alopecia caused by hair relaxer chemicals.
Pivoting from Pain to Profit
The traumatising experience tortured Enid for years, and by 2019, she had conducted research and hired chemists to formulate a lasting solution in the form of hair treatments with shea butter as the base. Almost 7 years later, Raw and Organic is adding value to the shea butter agro-processing chain by manufacturing and exporting organic shea butter hair and skin products, including leave-in and deep conditioners, pomade, shampoo, body lotion and lip balm. Working with women’s cooperatives in Agago District, Raw and Organic provides a consistent income source for out growers, who in turn keep the value chain wheel spinning by providing a steady supply for the business.
Speaking on the journey as an entrepreneur who applied for the INVITE EFS Grant, Enid recounts her experience, stating that she made the right decision and that the funding came at the appropriate time. “I was thrilled when I was awarded the grant because I would never have been able to attend the 25th Annual MSME Trade Fair in Nairobi last November.” She added that INVITE accorded her the opportunity, and she “won an award for the best product among over 300 participants from Uganda.”
The exposure at the fair gave Raw and Organic visibility and contacts beyond Kenya and Tanzania, including Malawi, South Africa, and Ghana. Enid has phased her business, targeting a segment for each block of countries in each phase. The first phase includes Kenya and Tanzania, which are currently the main consumers of the products, followed by Ghana and South Africa in the second phase, and the United Kingdom, United Arab Emirates, China, and Asia in the third phase.
Working Around Business Challenges
Manufacturing in Uganda faces various setbacks, and many businesses are unable to transition from low to high-capability, leading to failures and the export of raw materials rather than processed or semi-processed products. One major setback for Enid is logistics, which prevents Raw and Organic from meeting demand for their products.
Transport costs are quite high, and therefore, meeting the needs of her clients in South and West Africa has been difficult. “If we could have affordable cargo rates through the national airline, it would make our business easier,” she states, adding that “a client may require less stock than is worth the air ticket to send it across.” This may result in the loss of clients and, eventually, revenue after significant capital has been invested in the business. Another prospective client is still having logistical challenges, as there is no consistent transport from Uganda to Arusha.
“International buyers of shea butter and its value-added products expect high quality, consistency, and safety,” she states as another challenge. Failure to meet these standards risks buyer rejection, reputational damage, or non-compliance with import regulations. The quantities are still lacking, and even with the 15 tonnes needed for normal operations, sourcing them can be a stretch for the company, which must maintain a constant supply to remain in business. This creates uncertainty for the business, which must retain workers and maintain operations.
A huge hurdle to overcome is the cutting down of shea nut trees for the cooking fuel business, with charcoal burners all over the place indiscriminately felling trees. Raw and Organic uses awareness to assist in the fight against that, emphasising that environmental protection is tantamount to economic development. INVITE, in adherence to the Environmental and Social Management Framework (ESMF) and to the requirements in the Environmental and Social Commitment Plan (ESCP), ensures that all beneficiaries’ safeguards are up to standard before they are awarded a Grant.
Other challenges cited include cosmetics regulations in destination markets such as the UK, EU, and UAE; import permits; certificates of analysis and quality conformity; traceability and supply-chain transparency; and the cost of compliance, testing, packaging, and scaling.
INVITE Project Intervention
INVITE has made these services available through funding for businesses to access expertise that enables them overcome some of the challenges. The Investment for Industrial Transformation and Employment (INVITE) Project is an initiative of the Ugandan government, funded by the World Bank and a Multi-Donor Trust Fund, with support from the Netherlands, the United Kingdom, and Sweden for the manufacturing and export sectors.
The Export Firm Support, a sub-component of the project, has issued finance grants to support Business Development Services (BDS) for private sector enterprises engaged in manufacturing and exporting value chains. The activity areas include export market identification and segmentation; product design and adaptation; product branding, packaging, and labelling; production; installation of standards; target-market-required standards and certifications; relevant training, including market intelligence for the target export market; and regional and international exhibitions/shows.
Raw and Organic Investments Ltd has appreciated the benefit of responding to the INVITE EFS Call for Applications among 309 applicants so far, and this investment has paid off. The company works with 105 women in Agago District and contributes to the chain by providing a steady market for shea nuts, which pickers and collectors, including youth, depend on. This has a multiplier effect at the community level, amplifying the INVITE project’s impact on its core objective of transforming the manufacturing and export industry.
