KENYA – A Mombasa-based bakery and confectionery has setup shop in Nairobi, the first branch outside the Coast where is has for more than 105 years cultivated a loyal customer base.
Fayaz Bakers, a family run business, set up a bakery off Lusaka Road in Industrial Area a fortnight ago from where it plans to sell its products in Nairobi and surrounding markets.
The company, which has nine other branches at the Coast, manufactures more than 100 different products including cakes, biscuits, pastries and ice creams.
The bakery, which was ranked 69 in the 2013 Top 100 competition, records an annual turnover of about Sh500 million, says they seek to grow through the expansion.
“It has always been our objective to expand to Nairobi. It was just a question of when,” Fayaz Khamisa, managing director of the bakery, told the Business Daily.
“The growing demand for our products is part of the reason we decided to set up shop here. The added advantage of setting up in Industrial Area is that the neighbouring areas already know our brand.”
Fayaz Bakers’ new operation was set up at a cost of about Sh20 million (internally sourced funds).
Mr Khamisa says they have acquired a long-term lease of the land, where the Nairobi branch is located, from a local insurance firm.
The bakery, whose capacity is 15,000 loaves per day, will at first market its products in South B, South C, Industrial Area and surrounding areas before expanding to Mlolongo and Kitengela as well as the wider Ukambani region.
Mr Khamisa is a fourth generation family member to take control of the business which his great grandfather founded in 1911 as Mohamedan Bakery from his home.
At the time, they used to supply bread to British navy officers who were fighting in the World War One but operating from Kenya’s coast.
As a result, the bakery’s brand and sales grew and in 1937 the business launched its first standalone bakery kicking off years of a successful baking business that has now seen them set up shop in Nairobi.
This maiden bakery on Digo Road in Mwembe Tayari still stands today to uphold the family tradition but it has been refurbished several times in order for it to operate efficiently.
In 1987, the family changed the name of the business to Fayaz Bakers, dropping the previous one over religious concerns.
Mr Khamisa, 31, says the business’ continued success is as a result of his great grandfather, grandfather and father involving younger generations in the day-to-day operations of the bakery to ensure continuity.
“I grew up watching my parents run the business and on several occasions took part in the baking process. Even when I went abroad to study I knew I wanted to come back and run the family business,” he said.
The firm, which has branches in Kilifi, Old Town, Likoni, Mtwapa, Kisauni, Changamwe, Mariakani and Malindi, has since expanded its portfolio of products to even include coffee shops, ice cream, biscuits and confectioneries.
The firm plans to set up other branches in Voi and Lamu in the next five years, as its eyes exports to Tanzania.
At the moment, Mr Khamisa says the business will sell the same products that are available in their bakeries at the Coast because they have garnered interest in Nairobi.
A few years ago, the bakery invested in quality packaging that enabled their assorted cookies to remain fresh for a longer period of time, allowing them to be transported to Nairobi for sale at select retail outlets.
“Our customers can now get fresh products made right here in Nairobi,” said Mr Khamisa.
The bakery’s director says setting up in Nairobi was no easy task as they encountered all the challenges that startups face, mostly the red tape that precedes securing the right licences.
Inflation has, over the years, driven up the cost of production but Mr Khamisa says taxation of the previously zero-rated bread is what has hit their business the hardest.
To counter this, Mr Khamisa says the firm opted to diversify to other products to boost their bottom line and spread risks.
Demand for cakes, biscuits, cookies and other wheat products has been increasing over the years in tandem with the change in consumer preferences.
This has caught the attention of large retailers such as Uchumi, Tuskys and Naivas supermarkets that have set up bakeries in their outlets. Kenyans consume close to one million tonnes of wheat every year, most of which is imported.
Kenya produces 350,000 bags of wheat annually against a demand of 900,000 bags and this deficit is covered through imports.
In the bread category, Fayaz Bakers will have to fight it out for market share with established enterprises such as Kenblest and Broadways that have in the past three years boosted their production capacities.
Listed firm Unga Group also seeks to re-enter the baking business following their buyout of Ennsvalley Bakery.