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The Pain And Drive That Turned $5,000 Into $65 Million A Year

Published 7 years ago
By Forbes Africa

Emmanuel Katongole is a brisk, no nonsense, entrepreneur with a powerful desk and a sharp suit. If you look closely, beneath his distinguished grey hair, you can see the traces of pain that steeled one of Uganda’s leading entrepreneurs.

Katongole watched his three elder sisters die for want of medical care. It is no coincidence that he has dedicated his life, as an entrepreneur, to making pills to fight two of Africa’s great killers: malaria and HIV/Aids.

“My elder sister got pregnant at 15 and died while giving birth, she bled to death because she couldn’t go to hospital. The other two died of HIV/Aids, leaving me alone. This is not only hearing of it, I saw it. So many other families have gone through this,” says Katongole.

“It was an influence in this kind of business. I think about them often and now we see our medicines being made and thousands upon thousands surviving. That gives you a good feeling.”

To say Katongole grew up the hard way is an understatement. He was born in 1962 in the rural Mityana district in the hills of Uganda and spent most of his childhood herding goats and fighting off hyenas.

“We grew up right from childhood being independent and had to work to survive. That has grown with me,” he says.

Neither his father, nor his mother, could read nor write; his father worked as a laborer, his mother sold roasted maize by the side of the road. In 1965, Katongole senior moved the family to Kampala, in search of a better life, when he secured a job working as a night porter at the Palace of Kabaka – the seat of the King of Buganda. One day Katongole senior went to work, never to return.

“It is believed that he was caught in the gunfire that resulted from the soured relations between the Buganda kingdom and the central government at the time. We never saw him again,” says Katongole.

It meant more hardship for the family. Veronica Katongole had to make the tough decision to withdraw her three daughters from education so she could afford to pay for her son to go through school. Young Katongole did not wear shoes, ride in a vehicle nor switch on a light bulb until he won a scholarship to Namilyango College near Kampala. The hard work paid off and Katongole graduated from Makerere University – known in Kampala as the ivory tower – in statistics and applied economics. He got a job and began looking for areas of business not yet saturated. As it turned out, 1987 was a good year for entrepreneurs in Kampala. The Ugandan government was easing state controls and liberalizing the foreign exchange market.

Katongole saw that 1.5 million, out of 30 million, Ugandans were HIV positive. On top of this, malaria killed 300 people a day; the equivalent of an Airbus A340 crashing seven days a week, he says. In 1997, Katongole and five partners put in $5,000 each to found Quality Chemicals on a patch of dusty land on the poor fringes of Kampala. The first year was lean; the company turned over less than a million dollars.

“The turning point came in 2001. This is when the world became very tough about intellectual property and patents. When the World Trade Organization came in, we saw this as an opportunity. Uganda was among 16 of the poorest of the poor nations made exempt. Patented medicines were expensive – do you allow poor people to die because of patents?”

It cleared the way for Quality Chemicals to manufacture six million pills a day to tackle both deadly diseases. The coup was a joint venture, in 2005, with Indian pharmaceutical giant, Cipla, which was looking for a foothold in the continent. This poured capital and expertise into the company and by 2013 turnover was $65 million; this year, the accountants project $76 million. In November, Cipla spent $15 million on increasing its stake to 51%. Katongole and his fellow five founders retain 23%.

It is a late autumn morning in the outskirts of Kampala and Quality Chemicals is humming. Outside there are goats grazing in the sun, it is nearly noon and more than 30 degrees Celsius; inside it is cool and busy. Hundreds of people in white coats are hard at work making the handfuls of pills that can be the difference between life and death for a village full of people.

The company exports to Kenya, Rwanda, Tanzania and South Sudan. It is far from an easy business.

“The infrastructure problems of the country notwithstanding, we have problem with access to markets. You know, we have got a lot of donor products coming in and these hinder the development potential of our market. There are also subsidies given by other countries which hurt our market. Then there is the power shortage. It is not so much of a big problem since we bought our own generator,” says Katongole.

“We could do better, but if you compare what is happening globally, there has been a concerted effort by the state to sustain the economy. Inflation has been between 8 and 12 percent for many years; that is not bad for African countries. If you look at the exchange rate, it is largely under control, fluctuations here and there, but not bad. Interest rates, of 20 to 24 percent, are relatively stable, but they are high. Banks are helpful, but the economy is relatively small.”

Despite this, Quality Chemicals is thinking big.

“Our dream is to be the number one company in our field in Africa. For now, the problem of malaria and aids is still big – we are also looking at making pills to tackle cancer and hypertension. These are the serious diseases we are thinking about.”

The next thought will be the completion of a second factory that will increase the workforce to 700.

“I tell you I always believe that every generation has its revolution and the revolution of our generation is entrepreneurship. A lot can be done. Well-handled entrepreneurship can do so much,” says Katongole.

This confident man has one tinge of regret; that he never had the chance to offer his hard working mother more of the fruits of his success. Veronica Katongole died of skin cancer in 2002. Among her last wishes were for her son to build an iron sheet roofed house for her – the family had grown up under mud and wattle. The second was that she wanted her funeral to be led by a Catholic priest.

The first request was built in Katongole’s first year of work; the second was led by the Archbishop of Kampala.

In a tribute to his mother, Katongole has launched bottled water, called Vero after her, where the proceeds go to charity, in her honor. Proof, that the legacy of an entrepreneur can be far more than money.

In The Business Of Caring

In Uganda entrepreneurs are known for the money they have made but their reputations are often tainted with rumors of dishonest practices and dealings that helped pave their path to success. This is not the case when you mention Emmanuel Katongole in Uganda’s business community.

Katongole is widely recognized for his social entrepreneurship, philanthropy and unrelenting spirit. For someone who had to team up with his illiterate mother to sell local liquor to earn school fees, it is inspirational to now see him as a member of the Initiative for Global Development (IGD), a group that aims to reduce poverty worldwide and consists of successful business leaders from Africa, Asia, Europe and the United States (US).

Katongole is part of the esteemed company of former secretaries of state of the United States Madeleine Albright and Colin Powell, who co-chair the governing council of IGD.

Back in 1997, Katongole, along with five colleagues, founded Quality Chemicals. It grew to become the only company in sub-Saharan Africa that manufactures triple-combination antiretroviral (ARV) drugs. Today, the company manufactures and sells antiretroviral and antimalarial drugs. Given the crippling effects of malaria and HIV/Aids on the continent, Katongole has made a significant contribution towards reversing the effects of these diseases.

There have been accusations of him being too close to the Ugandan government and subsequently using his close connections to get ahead in business. Others, however, argue that the scourge of HIV/Aids and malaria has long been a major priority for the Ugandan government and any major player within that sphere would require a collaborative relationship with them.

Besides Quality Chemicals, Katongole founded Vero Mineral Water, in memory of his late mother, Veronica.

The business commits 10% of its proceeds towards social development causes such as education. For Katongole, entrepreneurship should solve society’s most pressing challenges and his businesses are testimony to this.

His background is one of extreme poverty and disease. He used this as inspiration to build an enterprise that not only creates wealth but confronts the twin evils of poverty and disease within its community. Katongole is the district governor of the Rotary Club in Tanzania and Uganda, which provides humanitarian services in that region of Africa.

“I think he has done a lot for Rotary and that is a good thing,” says Ugandan business mogul Patrick Bitature.

He adds that although Katongole has achieved a lot as an entrepreneur, he is bound to achieve a lot more in future.

“He is going places,” says Bitature.

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Related Topics: #Emmanuel Katongole, #Entrepreneur, #HIV/Aids, #July 2014, #Malaria, #Uganda.