SOURCE: BUSINESS DAILY
For the two brothers, Bhavesh Kotecha and Divesh Kotecha, owners of Sai Pharmaceuticals, steering a start-up to a successive business was no easy task.
But what has enabled their firm to grow this far is identifying market gaps early.
“We identify gaps in the market and source drugs to fill the gaps,” Divesh says.
There are some products in the market which we were the first to introduce and other companies followed our example such as drugs for nausea and vomiting in pregnancy which were not available locally.
We have also sought to bring in cheaper alternatives in categories where the available drug was too expensive,” he says.
Working in his father’s wholesale business sparked the entrepreneurial instinct in Bhavesh, the director at Sai Pharmaceuticals Limited.
After graduating from the University of London in 1989 with a Bachelor of Pharmacy degree he worked in the family business – Kotecha Wholesalers based in Kisumu for the next eight years.
Meanwhile, his younger brother Divesh was following in his footsteps and had also graduated with a Bachelor of Pharmacy degree, but from a different university – The University of Nairobi.
Divesh opted to go into employment first as a quality analyst and then as a medical representative for a pharmaceutical company.
In 1995, the brothers decided to start their own business and Divesh began registration of the drugs they wanted to import.
Two years later, their pharmaceutical business got off the ground with seed money from their father.
From the beginning they decided to focus on wholesale as opposed to the retail market.
Time for expansion
“Managing chemists requires a lot of time and you physically have to be present so it ties you down, but wholesale offers more room and time for expansion,” says Bhavesh.
Life wasn’t easy at the beginning and with just one client, the monthly sales of Sh50,000 couldn’t even cover the rent on their office premises which was Sh75,000 a month.
They were operating from a small house in Brookside Drive in Nairobi.
They persevered with their father’s encouragement and funds from the family wholesale business kept the firm afloat.
“It was a matter of working hard and proving ourselves to the market and slowly by slowly we got more companies asking us to distribute their products,” says Bhavesh.
Sai Pharmaceuticals has exclusive arrangements with international drug companies which want to enter the Kenyan market.
The bulk of its suppliers are in India and it also has three suppliers in the UK, USA and Indonesia.
The company sells both generic and branded drugs with the latter accounting for roughly 65 per cent of its volumes.”Due to intense competition, the pricing pressure on generic drugs is very high as compared to branded drugs which once established in the market, tend to command higher prices. We sell significant volumes of branded drugs which has helped to cushion our revenues,” says Bhavesh.
Their competitive edge is professionalism, “not marketing illegal drugs,” and building relationships with clients.
Divesh heads the sales department and spends most of his time in the field meeting clients and sourcing new businesses.
Getting the right mix of products at the right price has also given them an edge in the market.
The company’s biggest challenge is counterfeit drugs.
“Registration of drugs is a cost and we can’t compete with counterfeits which are cheaper because they don’t go through this process,” says Bhavesh.