By Prudence Minayo
The rags to riches story of Paul Kinuthia is one that continues to captivate and inspire so many Kenyans. His rise from a mere hawker selling perfumes in the harsh streets of the city to a billionaire owner of the popular brand Nice & Lovely was a result of seizing opportunities and working hard to make them a success.
Here is the inspiring story of Paul Kinuthia as told by WoK.
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In the early 90s, Mr. Kinuthia used to load coffee at the then flourishing Kenya Planters Cooperative Union (KPCU).
He then moved on to hawking perfumes and on his first day made a tidy sum of Sh600, which was good money back then. While the money was not bad, he wondered if he was doing the right thing but went back the next day and made the same amount.
Some of his friends who had pursued further education met him hawking his wares and mistook him for a beggar. They even offered to find him an office messenger job at Kenya Power. This got him thinking and he became uncomfortable about meeting his friends. Changing strategy, he began selling to salons and offices.
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The salons began asking him to also supply them with shampoo. Seeing a golden opportunity, he researched and found out he could make his own using a charcoal stove (jiko), sufuria and blending stick. Armed with Ksh3,000, he began making his shampoo in a small room in Kirinyaga road, Nairobi.
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A New Dawn
The salons loved the shampoos and he would sell out within a short period. He even began hiring a handcart (mkokoteni) to supply to his clients. This was how his brand, Interconsumer Products was born. Soon the one man business grew and he bought his own handcart and hired someone to pull it. His clientele also expanded and to satisfy demands he also introduced conditioners and gels to his products range.
The room in Kirinyaga road then became too small and he relocated to bigger premises in Gikomba. This new growth came with its own challenges. Police became his frequent visitors as they suspected he was making contrabands. His products were not branded and the salonists would just pour it into branded bottles.
Amidst interference from police and the Kenya Revenue Authority officials, the business grew and more sophisticated machinery became a necessity. Unable to acquire bank loans, he borrowed using his father’s land as security.
Formalising and Branding
In 2001, Paul Kinuthia formalised the business and hired professionals to help with the running of his booming venture. By this time, he had spent so much money on police officers and KRA officials who had taken advantage of the fact that he was unaware of some business aspects, such as, his entitlement to corporate tax relief as an investor to aid him in recovering the money he spent on machinery and constructing the factory.
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Steadily, his products infiltrated the Kenyan market with the affordable prices attached to the brand attracting multitudes. His flagship Nice & Lovely was especially a major hit.
Interconsumer was headed for success and there was nothing stopping him. The company grew and made profits amounting to hundreds of millions. They even won Business Daily’s Top 100 SME competition before crossing to revenues of more than Sh1 billion and joining the Club 101 competitions.
Fight with and Sell Out to L’Oreal
In a market that was once dominated by international brands, Nice & Lovely became a powerhouse. It attracted the attention of multinationals and at some point Mr. Paul Kinuthia was sued by French cosmetics giant L’Oreal. The brand instigated legal proceedings against him claiming he had infringed on their trademark Dark & Lovely.
This is why the decision to sell his beauty and cosmetic arm of Interconsumer to L’Oreal was nerve wracking. This included selling Nice & Lovely, Gold Touch Face Cream and Clarion Nail Polish. He had initially been approached by L’Oreal in 2010 asking him to be the distributor of their products range but he declined due to their previous lawsuit.
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They then went back to him with a buyout offer which he initially declined since he thought they offered a low price. Other brands expressed interest in his company and when L’Oreal came knocking again, the company value had shot up. After successful negotiations, he pocketed his billions and L’Oreal took over. Some dailies reported he got more than a billion while others reported he got an exact sum of Sh3 billion.
According to the entrepreneur, the deal with L’Oreal was an opportunity to harvest his investment and give him the muscle to go big into the sanitary care market, which he ventured into in 2008.
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