Varsani Brakelinings: The Brake Pads and Lining Specialist in Kenya by Bharat Parekh

Interview with Bharat Parekh, CEO of Varsani Brakelinings Ltd

What is your assessment of the spare parts sector in Kenya?

The sector is progressing well in the country. In spare part manufacturing, people are coming to manufacture and there is competition in prices. This sector is gradually growing. We have manufacturers like General Motors and Isuzu coming in and doing a good job for the country by using a lot of local spare parts in their vehicles. They will use some local parts for manufacturing as well as for aftermarket sales services. They insist we do this to support local industry. That is a good sign that the government has given incentives that if these manufacturers use local components, there are less taxes and that has spurred the trend. The government is curtailing the import of older vehicles, which gives the advantage of being better for Kenya and the environment and less pollution.

Is the market competitive? Do cheap imports from Asia pose a problem?

We are already a 40-year old company. In the next ten years, we will be three-fold. We will be in every sector.

The market is competitive. There is not necessarily a problem with cheap imports from Asia or China. They are also manufacturing very good products. The problem comes from cheap products from anywhere in the world where they compromise on quality to offer a cheaper price. That will remain a challenge.

Is this a problem across the industry?

It is for all industries. There are several other industries with similar complaints.

What are your competitive advantages?

It is all quality based. Price, quality, and service are the three things that will bring customers to us. Brakes are a safety product. When people buy brakes, they think about the safety of the passengers or their family members and look for higher quality products.

What is your selling process?

We have Isuzu Motors, shopkeepers, dealers, kiosks. Everyone buys from us. My sales are basically in every sector.

How do you promote yourself in these different segments?

I have a 90% market share in the public transport passenger vehicle sector. When it comes to the transport sector where there is a price war, that entire sector has issues. They go for cheaper products and will go for some compromises on safety rather than a high-end product.

What is your growth strategy?

We are growing throughout East Africa. Our strategy is to continue into Eastern and Central Africa.

What is your international reach?

We are already present in Uganda. Several bus companies there are using VBL brake linings. For Tanzania, we are not present there yet because there are issues with how expensive it is for them to import from here to there. But we will definitely overcome that and expand there. In Rwanda, we have a few customers. It is an ongoing process for expansion internationally.

What are some of your success stories that you are proud of?

Previously, we were a manufacturer of all kinds of brake lining products. Over time, we realized we had success in the public transport sector. Over the last 15 years, we have grown in that sector and have 90% market share today. That is our biggest success story. Mechanics and bus owners prefer the VBL name. We have become a household name in that when people think about brake lining, they think of Varsani Brakelinings.

Are you interested in attracting technological partners?

We have a technological partner out of India called Sundaram Brake Linings. 100% of our R&D is taken care of by them. They provide us all technical, R&D, and testing support. We continue to improve our brakes based on their input. We have certain agreements with them and they support us.

Regarding financial partners, are you looking to attract funds or equity to develop new projects?

We are not looking at the moment. However, when the opportunity is there to grow two or even three-fold, at that time, we will definitely require some kind of investment or support. But at the moment, we are managing from our own funds.

What current projects are you working on?

We have started an indigenous project in Kenya through technological development done in our own small R&D department in country. We have started manufacturing with our own formula and it is going very well. We are proud to have an actual 100% “made in Kenya” product.

What are the main challenges you are facing?

The biggest challenge is to get into the transport sector. This is the truck and trailer sector mostly which is quite depressed at the moment. Because of their own finances, they are looking for cheaper products. We always visit them, talk with them, and have seminars. But they always say no to high end products and go for medium range products to save some money and maintain their cash flow.

Project yourself five years’ time. What do you want to achieve?

The company will grow a lot. We are already a 40-year old company. In the next ten years, we will be three-fold. We will be in every sector. We still have the transport and motor car sectors to get into and they are in the pipeline now.

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