As more Kenyan companies set their eyes on the expansive Ethiopian market, one start-up has also been eyeing the opportunities sprouting from this nation.
As telecommunications service provider, Safaricom, celebrated being awarded a telecom license to operate in Ethiopia in May this year, Mr Machacha Muchiri knew it was also time for his tests and measurements company, Amotech Africa, launched nine years ago, to expand its wings, convinced that the Ethiopian market was the stage he needed to steer his solutions business through 2022.
“Industries want to understand their power consumption habits, safety of their equipment and systems, and the quality of power they use because it helps them put corrective measures for protection of their equipment and for safety,” Muchiri says, explaining the role his company plays.
The company works with high energy users such as factories, mining companies, energy companies and food and beverage businesses. It offers services such as testing the quality of electricity a company uses and any possible failures and weaknesses, measuring power consumption for companies to allow them calculate cost effectiveness, as well as offering repair and calibration services for power systems and connections.
It also serves companies that heavily use the internet through testing the effectiveness of systems, in the process identifying possible fault points for corrective measures. As for energy companies, they test their transformers and sub-station operations and then recommend customised prescribed solutions for faults they discover.
The company started as a seller of Fluke meters, distributed by a US brand, but has grown to offer all round solutions for heavy energy users through partnerships with globally experienced companies in various sectors, building an all-rounded business that offers a variety of tests and measurement solutions.
“For us, it’s been a growth responding to customer requirements so that we do not offer competing solutions, rather, complementing solutions,” Muchiri comments.
About a month ago, the company entered into a partnership with globally renowned renewable energy firm, GE Grid Solutions, becoming their local distributor. The company also became their twenty-fourth partner, each giving them access to a new market.
The company’s trick to success has been seeking partnerships with such corporations to get access to their rich technologies, expertise through training for its team of engineers and becoming their distributors within the markets it operates.
From a team of two, the company now employs 17, mainly engineers. They are also in the process of establishing a multibillion repair and calibration lab that will make it possible for the company to offer repair services for equipment it distributes on behalf of different brands, as well as traceable calibration services and certificates, after issuance of ISO certification.
“We are positioning ourselves as the authorised service centres for these brands that we work with. If you have any repairs and calibration requirements, as it is, you will need to send the equipment back to the OEM in Europe or America,” Mr Muchiri said, noting that on completion around the first quarter next year, the lab will have cost more than Sh50 million.
The entrepreneur observes that dealing in different markets around different countries has allowed the company to spread the risk and continue surviving even under harsh conditions.
“Different markets have unique dynamics, and as part of diversification of risk management, we know that a lot of countries have a slump commonly during or after an election year. As part of the diversification strategy, we tend to cherry pick the initial customers that we approach in different countries and we have come to realise that the need for test and measurement is seriously there in many countries,” he says.
For instance, during the Covid-19 pandemic last year, Muchiri says Malawi was its best market while Tanzania has supported its growth this year, with Ethiopia promising to perform well next year.
He also said offering all-round solutions for clients has helped Amotech Africa win more new clients and sustain existing ones, since businesses want someone who will solve all their problems at a go, rather than dealing with different parties.
While Covid-19 ravaged the economy last year, the company got a breather due to the high demand for medical ventilators, gas flow and other medical equipment that required analysers to test their quality and effectiveness.
According to the founder, the financial performance of the company has grown at an average of 30 percent year-on-year, as capacity increases due to regular staff training by a variety of manufacturers.
“We do not offer the same solutions throughout. Products could be from the same manufacturer but solutions differ. Since the basket is quite wide, it could mean different solutions picking up at different times depending on what is going on,” he points out.
The main challenge for the business has been fundraising, since local banks have focused on loaning out money to businesses with collaterals in the form of real estate.