Mugasha, the herdsboy who became a billionaire
Sep 20, 2013
The first time Ben Mugasha ever wore a pair of shoes was during his Senior Four leavers’ dance. He had borrowed them to impress a girl he admired. The shoes were so tight he had to abandon the girl midway through the dance and walk back home barefoot!
The first time Ben Mugasha ever wore a pair of shoes was during his Senior Four leavers’ dance. He had borrowed them to impress a girl he admired. The shoes were so tight he had to abandon the girl midway through the dance and walk back home barefoot! It is from such humble settings that he has risen to build BEMUGA Forwarders, a clearing and forwarding firm. He shared his story with Clare Namanya
Who is Ben Mugasha?
I was born in to the late Keith Mugasha and Kezia 51 years ago in Bushenyi (present day Mitooma district). I am the last of 12 children. I enrolled in Kyeibare Church School for Primary One in 1972 at the age of 10.
I was late to start education because my father had grounded me to graze his cows. Life was harsh then because my father was very strict. I remember one incident when I was 17, he took me to a swamp to hunt bush bucks.
He took cover and told me to keep guard in a place he knew was the animals’ path. That was placing me directly in harm’s way.
I saw the fully grown buck we were hunting approaching me at full speed. I was paralysed; I just stood there, helpless, knowing it was going to crash me to death. But luckily, it simply leapt over me.
Even after that, my father left me in that swamp. I spent two days moving in circles, lost, and trying to find my way home.
He treated me so harshly that I once asked my mother whether he was really was my father. I now know that he was only grooming me for tougher times ahead.
true
Part of Mugasha’s heavy lifting trucks
I remember he had given me an order to milk his cows every morning before going to school. That went on even after I joined O ‘level at Ruhinda Secondary School. In fact, it intensified in secondary school because then, he insisted that I milk up to 20 cows every morning!
School was 12km from home and I was always punished for late coming because the bell for class would ring while I was still at home milking cows. At lunch time, I had to go back and feed the animals and then run back while eating along the way so as not to be late.
I remember it was while I was in Senior Four that I wore shoes for the first time. I borrowed them for a dance in order to impress a girl at school. It was uncomfortable. The shoes were too tight I had to abandon the girl in the middle of the dance and walked home barefoot!
For A’ level, I went to Kitagata Secondary School from where I was expelled in Senior Six.
Coming to Kampala
After the expulsion, I decided to come to Kampala to stay with a friend, a former student, at our school. We lived in a small house in Mulago near the Cancer Institute which was partly being used as a mortuary.
In 1988/1989, I borrowed sh2, 000 from a friend and began hawking second-hand clothes for about month.
I had heard a former classmate who lived in Malaba was doing well. As luck would have it, I chanced upon him while hawking items in Kampala and he invited me to visit him in Malaba.
For the first time I had what I considered a real meal at his place. I later learnt that he was into clearing and forwarding, which I decided to do.
Later, with the help of family members who mobilised some funds for me, I pursued a one year advanced diploma in clearing and forwarding at the Institute of Shipping, Customs and Harbours in Nairobi.
trueLady Luck smiles at him
Upon my return in 1990, there was a job opportunity for a manager with Pool Freighters, a Kenyan clearing and forwarding company at their Entebbe offices.
By then, clearing and forwarding involved manual customs documentation, verification and classification of goods using the Form C16/17. I applied. I was still staying with my friend in Mulago.
One night he came home with a girl and there was no room for me. Since I knew no body around, I spent the night on a tree.
At about the same time, the Kenyan company called me. The job was well-paying. I bought a car in five months.
However, I was always afraid of what would happen if the airport closed or traders chose to do their own clearing. I had to do something.
Starting his first company
In 1992, I came back to Kampala and started Express Cargo Forwarders with sh2m savings from my previous job.
I then looked for Gideon Kiryoko, (RIP) who ran Walfford Meadows, a clearing and forwarding firm.
I sought his expertise since he had been in the business for years. However, business was slow.
So, in 1997, we joined operations with an established company, Nile Cargo Forwarders, in which we were incorporated.
Still, I never fitted in.
Kiryoko was experienced and had many clients. Nile Cargo Forwarders was big. I, on the other hand, could hardly bring in business. I had no contacts.
A month later, I was contacted by Saracen, a security company. Since I had been very effective in handling their goods while working with Pool Freighters, they wanted us to work together again. They gave me a £3.5m (about sh11.7b) invoice.
I could not believe it. My colleagues too were stunned. Meanwhile, disagreements broke out between Kiryoko and we parted ways.
BEMUGA Forwarders is born
In 1999, I decided to start again alone. I needed to bring corporate clients on board in order to be more competitive. The question was: How do I get the big clients? I realised I needed political connections. But first, I needed to acquire a licence.
With savings of sh6m, I bought a clearing and forwarding firm which had a licence but was dormant and incorporated it into BEMUGA.
At that point, all I had was a briefcase and stamp. I borrowed sh2m from a friend and rented a room at Orient House as my office. I did not know how I was going to pay it back.
I convinced a former colleague, Momax Onadra, to work with me because he was dependable and technical. We shared a desk.
Clients were hard to get. I had to go to one of my former directors at Nile Cargo Forwarders, who was a senior government official, for help.
He introduced me to PUT Sarajevo, a Yugoslavian company, the contractors of a project.
First deal
BEMUGA Forwarders’ first deal was to clear and transport materials for the construction of the Mbale -Kapchorwa road from 1999 to 2001. The deal was worth 60m Euros (sh200b). I had to execute it diligently. I employed two more staff and paid all my debts and rent for the next two years.
That same year, a friend who was the general manager for Nsamba Coffee Factory gave me business to deliver a consignment of 600 metric tonnes of their coffee from Mombasa. It was worth $1m (about 2.5b) and the first cross border venture we attempted.
Around that time, Heritage Oil, an international oil and gas exploration company, had completed data analysis stage and was coming back to Bundibugyo for the drilling. I got a contract to clear their equipment. However, I was stuck because I did not have an office in Mombasa.
I rushed there to speak to FFK (Freight Forwarders Kenya Ltd) for help with that.
When drilling started, it was very challenging because it was a whole new chapter at the customs office.
Heritage Oil started importing explosives and detonators among other things, and asked me to handle the process.
No one had any knowledge of how to handle these items.
We needed help from the army. I remember I was almost arrested after security agencies received a tip off about the arrival of a consignment of those materials. They thought I was linked to terrorists. Nevertheless, we did well considering all the ignorance.
In 2004/05, the same government official who had earlier come to my rescue helped me get another deal to clear, transport and distribute masts and switch boards for Uganda Telecom Ltd worth 50m Euros.
Some of Mugasha’s cattle. Photos by Nicholas Oneal
The need to specialise
I knew that I was on the right track but in 2004, I saw the need to specialise in handling oil and gas equipment. This would involve clearing and transporting all drilling materials and execution of customs bonds, since most of them came on temporary basis.
I wanted to avoid wrong deliveries as a result of mixing up consignments. In the business of oil and gas, a mistake like that can bring the whole operation to a standstill.
More oil companies on board
Among other contracts came Tullow’s which was operating in Bunyoro; Neptune in the North and Dominion in the West. They were all worth around… (hesitates to reveal) and I managed to serve them all without any mishaps.
Investing in heavy lifting
In 2001, some people came to me with a proposal to pool resources and invest in heavy machinery. I trusted them and invested $7.5m (sh19b) to import machinery from Kuwait.
Most of that money was from prior dealings with those oil companies and also from the Asset Lease Purchase arrangement with banks. However, the deal did not go as well as anticipated. These people took advantage of the fact I knew nothing about the items coming in.
I bought 10 cranes, six teller handlers, three forklifts, 20 fuel tankers from Kuwait but they were all faulty. The tankers had two axles instead of three, so we had to do a calibration to add the third axle which cost me $500,000 (sh1.3b).
Apparently, this was part of a scam involving some companies and individuals with an aim of sabotaging my set-up in the oil and gas field.
These ‘partners’ abandoned me and indeed succeeded in having my contract terminated. I lost a lot of money. I had hired and trained about 30 skilled people to handle those machines. I let all of them go.
I was forced to ship some of the machinery back to Kuwait. I embarked on buying new machines. I started with two cranes while four are in transit. I am looking at a fleet of 20 cranes in five years.
Through the bank’s car lease scheme, I have acquired 40 fuel tankers, 12 flat beds, four low beds, six down-trucks and two teller handlers. I also have 15 double cabins which do light jobs.
All taxes combined, Bemuga Forwarders pays around sh2.5b a year. The Government should build a strong local capacity base not only in oil and gas but in other sectors like road construction, power generation and telecoms as well which will definitely increase our tax base and revenue.
What makes him tick?
I do not try to prove a point to anyone but myself.
For everything I do, I make sure that there is God’s hand in it. Even when I help and some people are not thankful, I carry on because God will surely thank me.
I tell my children that all they have is their school bag. Everything I have is mine so they should build theirs.
Selfishness and self-pity is a cancer I cannot afford to have.
Other projects
I plant 50,000 trees every month
This started when my 25-acre banana plantation was destroyed by wilt.
I used to harvest a truck of bananas every month but it reduced to nothing.
My aim was not money but to set an example for the locals to go by.
I had started organising them in a cooperative-like society so that they could also realise some income from their plantations.
Theirs have since been wiped out too.
I was so angry that I cut down the bananas to plant 250,000 pine trees on a 130 acre piece of land. I plant 50,000 every month. I foresee a scarcity of timber in a few years because people are cutting down trees.
One fully grown tree gives six pieces and each currently costs sh12, 000. From the number of trees I have now (250,000), that translates to about sh180b after harvest.
My livestock is on 100 acres
I am not getting much from the cows and goats because I hardly have time for them. They are on 100 acres and in six paddocks. I last went there two years ago.
I have been told that there are 120 cows and 100 goats; only to find less of what I had left. I have now bought two tractors to till 120 acres to plant pastures.
I want to do this in phases and should be complete in three years after which I will be able to sell processed and packed dairy products.
I am going to build shelters for the cows where feeds are brought to them. I have seen this in developed nations. They produce more milk that way.
Our machines are costly
My kind of business is highly capital intensive and too technical. For example, a forklift costs around sh1.23b when imported from China and sh2.8b from the UK.
They are not operated by just any one but specialists who are hard to come by and expensive. Companies that sell or manufacture the machines we use always take advantage of our ignorance to fleece us of money.
It happened to me while I was starting out and it is still happening to others. Because we are smaller, they get away with it at times.
Since I am not at my farm, it has totally been mismanaged. Our people do not have the attitude of adding value to their work.
I have built four churches, two mosques, schools
I pay school fees for about 20 orphans, some at university.
I make contributions to numerous church projects and I have built four churches, two mosques and schools.
We contribute to needy children who require treatment abroad for major surgical procedures. Every Christmas, it is a must for me to buy 1,000 blankets to give to orphans and widows.
Awards
I have won five awards consecutively for fastest growing medium-sized companies.
I am an approved member of FIATA (International Federation of Freight Forwarders Associations). I am also a member of the Presidential Investors Round Table Forum on Oil and Gas and on the technical working committee.
I am one of the winners of the platinum category of 2012 Pearl of Africa Lifetime Achievement.
Find details in the free PAKASA magazine, New Vison Friday or Click to subscribe for the epaper
Also Click and Like the Pakasa Vision facebook page for more