But it was harassment by state officials, who demanded bribes of as much as KSh. 1bn for licences, that almost destroyed her young business, she says. She refused to pay these kickbacks.
“For more than 10 years, I fought tough battles against intimidation from state officials as well as multinationals,” she says. “At times, they would shut our processing plant, but we never gave up. This is my country and I had to fight on.”
A major turning point in Keroche’s story came in February 2008, when Karanja secured a KSh. 1bn loan from Barclays Bank. She had proved her mettle as an innovator and a capable business leader and financial institutions were responsive to her credit needs. Karanja used the capital injection to boost her factory’s infrastructure and capacity from three small rooms with five employees to much larger premises of about 4,000m² and more than 100 skilled workers. In October 2008, Karanja boldly entered the beer market and launched Summit lager.
Kenya’s beer market
Kenya is the largest beer market in East Africa, according to a 2012 report by Renaissance Capital, a Russian investment bank that tracks emerging markets. With GDP growth of 4.6% in 2012 (according to the World Bank) and a fast growing population, its market remains the region’s most robust, according to the report.
Breaking into the beer industry in Kenya has historically been difficult, even for SABMiller. The London-listed beer behemoth opened a brewing plant at Thika, about 35km northeast of Nairobi, in 2008. But after EABL mounted an aggressive advertising campaign and rolled out several cheap products to gain market advantage, SABMiller sold its facilities to EABL in 2010.
Keroche’s Summit lager, however, succeeded. The company now sells between 4.2m and 5m bottles of the lager and malt beer per week. Its share of the Kenyan alcohol market moved from 2% in 2008 to the current 5%, according to Keroche’s own market research.
What has made the Summit beers and Keroche’s other products thrive? Analyst Paul Okinyi of Nairobi-based Baseline Consulting credits the company’s innovation, its frequent rebranding and repackaging, and its 100% Kenyan ownership. Keroche’s motto, Truly Kenyan, has helped endear the company to the country’s beer consumers, he says.
Karanja is convinced that her segment of Kenya’s beer market will expand to reflect the rise of the country’s economy. “As people move up the income ladder, per capita spending on beer rises significantly,” according to a 2013 report by KPMG, an advisory firm.
A woman in business
Her story is even more remarkable because of the patriarchal barriers that Karanja sidestepped. Women hold only 12% of seats on the boards of Kenya’s top companies, according to a 2013 Kenya Institute of Management report, and only 14 of the 290 seats in Kenya’s National Assembly. Of Kenya’s 47 elected senators in the upper house, none is a woman.
Besides leading Keroche, Karanja is also a senior board member of the Kenya Association of Manufacturers. In 2013 Ventures magazine rated her as one of the most powerful women to watch in the continent’s corporate sector.
Last year Keroche announced a KSh. 2.5bn ($28m) expansion plan that will see its production capacity mushroom to 600,000 bottles a day from the current 60,000 by November 2014. Keroche plans to go regional next year, expanding sales into Burundi, Rwanda, Tanzania and Uganda.
Karanja, a mother of four, credits her success to determination. “I am what I am because of hard work,” she says. “To succeed where many failed calls for sacrifice.” She still finds time to spend with her children and her husband, now the company chairman. “We share dinners and celebrate birthdays together.”
Karanja wants to make it easier for other entrepreneurs to follow in her footsteps. She implores the Kenyan authorities to make the playing field fair. “Biased and over-taxation will destroy the industry,” she says. “We would like to see the government create a conducive business environment that emphasises fairness in word, deed and spirit. Competition is the key to innovative alternatives.”
This article was first published by Good Governance Africa.