As a child, Mr Ashiraph Iga Kigongo made a wish on a star and if it were to come true, he would wake up an engineer one day. Indeed, it did not take long. By the age of 25, he had become a civil engineer.
“I always wished to become an engineer. I was bright, right from Primary Three to Senior Four. I was also a very good artist so my interest in design came all the way through childhood,” Mr Kigongo said.
In 1998, while pursuing a Bachelor’s degree in Civil Engineering at Kyambogo University, he met Mr Peter Sentamu with whom he nurtured dreams to start a business after school.
“We were doing the same course and we had always wished to employ ourselves. So we came up with the idea when we were still in school,” Mr Kigongo says.
Immediately after school, Mr Kigongo became his own boss at Able Holdings Limited in 1999 with Shs150,000, his savings as a finance minister on Kyambogo University guild council. Mr Sentamu approached his father for a loan. With this, they chased paperwork with lawyers, wrote up a Memorandum of a Association, registered their business and opened a bank account.
When they started, they wanted to run a construction firm.
They might not have had a lot of experience doing business but they knew they needed a marketing strategy. They printed small fliers and business cards.
To gain traction in the market, the young adults approached their parents.
“We were still young but our parents had friends in a number of ministries. We would go there and look for small contracts which we got to supervise houses,” Mr Kigongo says.
Six months into the business, a friend interested them in a construction project of a hospital theatre in Moyo District. They took on the job because they had not done a big project before but little did they know that it was in the centre of the Lord’s Resistance Army in Northern Uganda.
“We ignorantly said yes and by the time we learnt that we were in the centre of the rebels, it was too late. 90 per cent of the people we were using on the site were ex-rebels, others rebels and we did not know,” Mr Kigongo says.
Besides this hurdle, they hardly had capital to provide construction materials for the project. So, they found a business godfather in Arua. A hardware shop owner Mr Richard Emiru offered a truck of materials worth millions once he saw a copy of their contract. Their artistry stood out and eventually sold them to more clients. Arua diocese accepted their bid to build the Youth Multiplex centre, and another youth centre in Adjumani. Around 2004, he returned to the classroom because he lacked a financial background.
Mr Kigongo obtained a Master’s degree in Business Administration with specialisation in finance to interprete the financial operations of his business.
The company then turned to a second specialty, water management.
“We realised construction was a bit hectic. It is very tasking. You have to pay taxes timely, you have to pay for materials, workers were stealing the materials yet we pay them, getting jobs was not easy, price fluctuations were hitting us so we had to diversify,” Mr Kigongo reflects. Corruption was also high for the company to compete.
Able Holdings Limited started with planning, pumping, connecting and maintaining the water supply systems of Moyo, Adjumani, Laropi and along came Nkokonjeru, Kakiri, Bombo water supply systems.
Along the way, Mr Kigongo noticed that the company was not breaking even with water management as a specialty. The capital investment and cost of production were higher compared to the revenue earned.
“The tariff is small so you cannot break even. If the domestic tariff was Shs7,000, perhaps we would break even. The cost of fuel is high. You find that you are using Shs4m to pump and collecting Shs3m. At times, you collect Shs4m and spend Shs4m, so you end up going into the pocket to pay workers,” Ms Kigongo says.
Today, Able Holding Limited has diversified and ventured into engineering consultancy. The company does designs, construction supervision, engineering audit and feasibility studies. The company is currently supervising a Shs450b mega project on behalf of National Water and Sewerage Corporation. Mr Kigongo is certain the company will break even and survive for years.
Since its venture, consultancy has paid off. However, challenges still reign. Mr Kigongo points to government’s poor policy on local content as a huge obstacle. Competition is high while the integrity of some clients is questionable. He says if the ground was leveled for both local and international consultancies in the bid process, they would compete favourably.
“The construction industry policy has not been passed by the Parliament. There is a draft that says all international companies shall incorporate 30 per cent local staff but here you find almost its 90 per cent or 100. We are doing the ‘donkey work’ yet we have experience,” Mr Kigongo says.
In addition, the bidding process is difficult due to the capital requirements. The civil engineer says requests for big securities once one has found a bid strains Ugandan companies. More so, the cost of preparing a bid is very high yet the possibility of winning a project is low. Local banks are paying a deaf ear to these financial constraints too.
Mr Kigongo re-echoes the taxation woes of many business men. He insists there is no clear tax policy on goods and services in the country and says it should be revisited.
Inflation makes it worse because it narrows the profit margin for his business. Despite this, the company still stands.
Able Holdings Limited now has a turnover of Shs7.3b after running more than 35 major projects in construction, water management and consultancy. It has employed more than 500 workers over the years, some of them masons, carpenters, telefixers and accountants. With about 100 tenants, Able Holdings has also evolved to include real estate development after the engineers found there was a gap of affordable housing in Kampala.
Mr Kigongo credits the company’s success to high integrity, hard work, marketing, high-quality standards and passion for what he does. He also says emerging 9th in the Top 100 SME completion ran by Daily Monitor and KPMG was one of his greatest achievements.
Mr Kigongo is confident that his clientele will grow bigger with the growth of rural-urban migration and integration of East African Community. He envisions the company expanding into East and Central Africa years to come.
Why participate inTop 100 SME competition?
Mr Kigongo appreciates Daily Monitor’s efforts saying there are many purposes of participating. “One is marketing, literacy and networking. Through that, you get to know your fellow competitors and people of different expertise,” Mr Kigongo says.