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Soap Manufacturer Captures Rural Market
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24 January 2012

   

Six years ago when Ikbal Hussein decided to go into business for himself, he did so after carefully doing his homework.


“I saw that soap is a daily use item and at the time, there was only one other soap factory here in Labasa catering to the demand. I did my research and saw that it was a profitable venture. It was then that I decided that this was the business that I wanted to do,” the one-time credit-officer said.  

The sole competitor has since closed down, allowing Ikbal’s Global Manufacturing Limited, a larger slice of the bath and washing soap market in Vanua levu and nearby rural islands. 

Getting his start with a loan from a commercial bank, Ikbal started GM Ltd in Labasa Town in 2006 with a staff of three people. After paying rent for his factory space for about a year, Ikbal decided that it would be cheaper in the long term to build and own the factory, which he managed with a loan from the Fiji Development Bank under its Land and Building Purchase facility. Located at Vakamasi, Suasua, the factory is located on the ground floor and the family home on the first floor. That loan has since been paid off.

In 2010, FDB also financed GM Ltd working capital under its Small Business Scheme to purchase a coconut oil extractor. “Coconut oil is the base for soap making as you very well know. The rising price of copra resulted in increased cost for coconut oil which I was buying at $720 per drum for 200 litres. With the machine, I buy the copra direct from the farmers and just extract the oil at the factory at a much lower cost of $300 for 200 litres,” the savvy businessman said.
 
The popularity of virgin coconut oil, the establishment of coconut bio-diesel plants around Fiji and the increasing demand for coconut oil in the production of cosmetic as well as food products peaked copra prices at around $1,300 per metric tonne in March this year. Future forecasts for this commodity is positive with Government encouraging the establishment of new coconut plantations in Fiji to cater for the rising demand for coconut oil.
 
Apart from the Flox brand bath soap produced by GM Ltd, the company also produces the Vanua Soap brand, 900gm bars of washing soap, which wholesales at $2.95 a bar. The Flox bath soap wholesale at $1.40 for packs of four.

Producing around 2.5 tonnes of washing bars in an eight hour day, the demand for his products are largely in the maritime zone where he sells his soaps through the Post Fiji outlets.

 “I get a nominal shipping rate from the shipping company that services the Post Fiji routes and this allows me to keep my overheads low,” Ikbal said.
 
With six employees now on the payroll, this once small business has grown in such a short time to medium enterprise status with annual turnover exceeding $500,000 per annum.
  
“I am thinking of expanding but not right now. I have the room to expand production at the factory but I will see what other opportunities exist before I do,” Ikbal said.

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