Chris BishopBy Chris Bishop|December 5, 2020|9 Minutes|In Billionaire Tomorrow

Sweet Ambition

The buzz of power tools, preparing a new factory, ring in the ears of Stephen Sembuya as he strolls through the empty, white-walled and tiled, building in Kampala that will soon house the next phase of his sweet dream.

“Painting also has to be done,” says Sembuya as he runs his finger through thick dust on one of the white walls and spies a small, square, hole in another, “As well as putting sockets and plugs.”

Outside, high on the wall, is the name of the company already up there – Pink. Four letters that Sembuya hopes will become a household name in chocolate, not only in the land of his birth, Uganda, but across Africa, over the next five years.

In the next five months, this shell of a factory will come to life with a roar in an attempt to capture a larger slice of the chocolate market for Africa. The first sounds and stirrings of this ambition can be heard at the back of the building; with a clunk-clunk, workers load the back of an open truck with nineteen heavy white, sealed, plastic buckets with handles. Inside each one is a thick, lumpy, white mass – that looks a bit like lard – of 18.5 kilograms of cocoa butter. It is on its way to export to the Democratic Republic of Congo. It will end up in pharmaceuticals, cosmetics and lotions sold across the DRC. The factory will also fill orders from neighbouring Kenya and South Sudan.

Cocoa butter and drinking chocolate are among the products that will see increased production at the new Kampala factory in a competitive East African market where Cadburys is still king.

“This is part of a five-year plan to increase production to feed the home and export market as Ugandans love their chocolate!” says Sembuya.

The entrepreneur saw opportunity in the huge between the value that Africa sells its raw commodities for and the much higher value reaped from their processing. It is one of the bugbears of post-colonial African economies; in colonial days, economies from Kampala to Cape Town were set up in such a way that railways were built to move commodities from the mines, or fields, to the ports for shipping to the northern hemisphere where the real money was made.

“African grows 80% of the world’s cocoa, but most of it is shipped to the Netherlands and other countries in Europe to be made into expensive chocolate,” says Sembuya.

Politicians across Africa may make empty speeches about beneficiation and adding value to commodities, but , at the very least, Sembuya had tried to do something about it. He researched the market and saw that Uganda was exporting cocoa for two US dollars a kilogram and importing the finished chocolate back to Kampala for two dollars for 50 grams. His business plan is to sell a home- grown bar of Ugandan chocolate for a dollar for 50 grams – undercutting the opposition and striking a blow for African industry at the same.

It all started back in 2011 with a four-man team working in Sembuya’s kitchen turning out about a kilogram of chocolate a day.

“I was the fourth man in the team!” chuckle’s Sembuya half-a-dozen years later.

Sembuya’s factory – employing 25 workers – will be part of this small revolution in the chocolate business. The plan is to ramp up production to process enough chocolate every day – up to a tonne – to make 20,000 bars-a-day.

It was a business that rose from the ashes of a family fortune. Sembuya’s family – in his own words – were once the Rockefellers of Kampala with a string of businesses: everything from banking and steel smelting to metal fabrication and the building of televisions and radios.

Years of decline , poor management and a slew of court cases whittled down that wealth to almost nothing.

“I asked around the family and found out one of the few assets we had left was a disused cocoa field,” says Sembuya.

One fine day, Sembuya drove 60 kilometres east of Kampala to the overgrown 640-acre cocoa field of his family in Buikwe District on the edge of Lake Victoria.

For three generations the Sembuyas exported cocoa seeds to Europe; his grandfather had planted the trees on the cocoa plantation more than half a century before. He found a score of workers who had found little to do since the Sembuya family money dried up.

In the shade of a cocoa tree in the heat of the afternoon the then 25-year-old Sembuya struck a deal – wages in return for cocoa – before driving back to his Kampala kitchen to rig up a make shift chocolate making operation.

In the first year, Pink Foods, as it became known, turned over $20,000 – now it turns over an estimated $150,000; still relatively small, but growing.

It hasn’t always been plain sailing. Taxes and bureaucracy have proved high hurdles. In March, came COVID-19 shutting down the entire operation for three months.

“I was a real effort to reopen the factory again, but we were lucky that a couple of export orders came in,” says Sembuya.

Often promising African businesses like this can be choked by a lack of foreign investment and hard currency .The future, for now, looks rosy for the growth of Pink Foods and its Ugandan chocolate could increase in the next few years. British development investors have put up $1,5 million in investment to fund the new factory. It took a while to convince the investors of the sweet prospects of the company and Sembuya had to give evidence of job creation and compliance.

Sembuya said he chose the deal because the investors – unlike many venture capitalists – didn’t demand a stake in the company. He merely has to pay it all back over five years at 10% interest.

One of the drags of the deal was that it took three months to complete the paperwork in Kampala.

Sembuya may one day have a say on cutting down the red tape in business in Uganda. In the elections in February, he plans to stand for Parliament. He may find public service a lot sticker than chocolate.

I was a real effort to reopen the factory again, but we were lucky that a couple of export orders came in.

- Steve Sembuya