Ovidian prints the majority of the outdoor advertisements you and I see on a daily basis, on bill boards, street lights, kiosk signage and at point of sale.
Ovidian was started in September 1996 by two friends – Devin Shretta and Erez Moshe. Both were in their mid to late twenties at the time. Devin is a third generation Kenyan whilst Erez is Israeli. Their dream was to build the biggest and best printing business in Africa – with Kenya as its base. What was the rationale for such a big vision? Devin believes that if you set your sights low, you will probably achieve a lot less, so thinking big from the outset is critical.
Ovidian was started using the founders’ savings and cash provided by family members. The first offices were in a bedroom rented from a friend. Inspired by what its founders had seen around the world, where advertising on buses and trucks is big, Ovidian initially tried to make money from vehicle branding. The first customer was Nakumatt, with a contract to brand one delivery truck. The design of the Nakumatt logo (the elephant pulling a shopping cart) was handed over for free as thank you for giving Ovidian their first order. Vehicle branding turned out to be unviable necessitating a shift towards other types of advertisements. For this, Ovidian needed to work with providers of digital technology. There were none in Kenya at the time, so overseas suppliers (primarily in Europe and South Africa) were the only way to meet customers’ needs. In December 1999, Ovidian bought its first machine. The first job on the machine was billboards for BAT – this led to Ovidian serving BAT’s operations in seven countries. The desire to exploit the export market triggered the establishment of an EPZ in December 2000. Devin took the helm of the EPZ whilst Erez remained in his role as CEO of Ovidian’s main business.
Devin emphasizes the critical role that the support of family played in making their business a success. Securing working capital from banks would not have been possible without family members putting up security in the form of personal guarantees. Additionally, it took much longer than expected for the business to begin to turn a profit. The partners went without a salary in the first two years, and eating out became a luxury. Devin points out that knowing that they always had their families to fall back on made it possible for he and Erez to take risks that would otherwise not have been possible. However their funding proposals were examined critically, “and only supported if it made good business sense”.
Growth has picked up in recent years buoyed by growth in the advertising industry and increasing adspend.. Growth in Africa’s economy has also been a contributory factory. “This is Africa’s time.” Devin says.
Ovidian attributes its success to the quality of its service/products, investment in human capital, and sticking to what the company does best. The company keeps a close tab on margins. This avoids eroding the company’s margins. “There’s little point in pursuing low margin, low cash business.” By the same token Ovidian believes in paying its customers on time.
Ovidian celebrated its twelfth birthday this month. A lot has changed in twelve years:- - The company’s client base has grown to 600 and includes household names. This growth is attributable to a commitment to excellence and honesty, and emphasis on customer satisfaction rate. Despite the temptations posed by a rapidly growing market, Ovidian would rather turn away a customer than take on more business than it can handle. In view of rising business volumes, the company’s workshop operates 24-7. Ovidian is currently implementing a state of the art MIS (management information system) that will enable it to track and schedule production efficiently, in line with customer deadlines. In addition, every member of the sales team is equipped with a Blackberry to enable them to respond promptly and efficiently. The same goes for all managerial staff.
- Introduction of new product lines – Ovidian’s state of the art workshop now boasts of numerous printing and cutting machines with the ability to handle all kinds of materials (plastic, cardboard, across the technology spectrum – from laser, to digital, to screen. Ovidian also has the capability to manufacture point of sale items (e.g. display racks) in wood, plastic, glass and metal.
- The staff complement has grown from 2 to 120. Ovidian has the reputation of being the best in the industry, and also invests heavily in staff. Performance based compensation is the norm across the board The staff now has a robust organization structure, including a middle management team, referred to as Team Leaders.
- In January 2007, the shareholder base expanded to include Aureos, a leading private equity fund. The
benefits of having Aureos as a shareholder include:-
- Additional Business expertise at Board level
- Enhanced corporate governance, and therefore, accountability at Board level. Aureos insists on the role of shareholder and manager being separated. Reinvestment for company growth takes precedence over shareholder compensation.
- Capacity building for managers in conjunction with the Commonwealth Secretariat (Aureos is related to CDC)
- The EPZ has since closed down as the costs of that business model exceeded its benefits
- Devin took over as CEO after Erez has relocated to Israel last year.
Challenges
Not surprisingly, Ovidian is facing downward pressure on its margins due to the rising cost of fuel and electricity, both of which impact the cost of other products and services. Additionally, Ovidian’s competitors view the company as an optimal hunting ground for good staff. Infrastructure is another big challenge – from the condition of the roads that Ovidian’s trucks have to navigate on their way to deliver products to clients in the region, to wastage of productive time sitting in traffic on Mombasa road. Getting staff acclimatized to working in a high pressure environment is another challenge.
Future plans Ovidian already exports to thirteen countries, and the business case for setting up offices in various markets is now strong. Ovidian is acquiring a competitor in Zambia and is planning more acquisitions in other African markets by the end of the year.
The company plans to list on a stock exchange in the medium term. It expects to have an African footprint in five years time. |
