In 2014, amidst a market dominated by imported goods, Somali entrepreneurs saw an opportunity to change the narrative. They established Somplastic Factory, a plastic houseware and furniture manufacturer in Mogadishu, to meet the growing demand for locally produced goods. However, like many emerging businesses in Somalia, the journey was filled with challenges, from sourcing raw materials to gaining trust and scaling production.
When Somplastic Factory first started, it operated with only six machines and a workforce of about 35 to 40 employees. Despite its potential, limited resources hindered its ability to compete effectively with imported products. That all changed when Shuraako recognized the factory’s potential and provided a transformative investment of $700,223 through NHAOF Investment. This funding became the catalyst for exponential growth, impacting both job creation and economic expansion.
Economic Growth & Job Creation
With Shuraako’s investment, Somplastic Factory expanded its production capacity significantly. The factory acquired two state-of-the-art plastic injection molding machines, along with PVC molds and raw materials, enabling it to scale operations efficiently. As a direct result, the number of machines increased from just six to an impressive 38–40, exponentially boosting production output.
This expansion had a profound impact on employment. Before the investment, the factory had around 40 employees. Today, Somplastic Factory employs approximately 150 permanent workers, operating in shifts around the clock. That’s a 275% growth in employment, creating sustainable jobs that contribute to the livelihoods of many families in Mogadishu. Additionally, the factory employs temporary workers during peak production seasons.
Market Expansion & Revenue Growth
With enhanced capacity and increased efficiency, Somplastic Factory saw a dramatic rise in its market presence and revenue. Initially, the company struggled to meet domestic demand. However, with the acquisition of advanced machinery and a steady supply of raw materials, production increased and the company now consumes between 15 to 20 containers of raw materials per month, ensuring a consistent supply of high-quality products.
Sales growth has been remarkable. The company initially operated with a profit margin of around 20-25%. Post-investment, this margin doubled to 40-50%, reflecting increased production efficiency, reduced costs, and a higher volume of sales. Furthermore, Somplastic expanded beyond Somalia’s borders, now supplying products to neighboring countries, including Ethiopia and Kenya. This expansion has strengthened the local economy and positioned Somplastic as a regional market leader in plastic houseware and furniture manufacturing.
Sustainability & Environmental Impact
A key component of Somplastic’s growth has been its commitment to sustainability. With Shuraako’s support, the factory implemented a recycling system, utilizing locally collected plastic waste as raw material. This initiative not only reduced costs but also promoted environmental protection by reducing plastic waste in Mogadishu. By blending imported virgin materials with recycled plastics, Somplastic continues to produce durable and affordable products, offering a sustainable alternative to imported goods.
Leading Local Manufacturing
Prior to Somplastic’s rise, most plastic goods in Somalia were imported from countries such as India, China, and Kenya. Today, the factory has disrupted the local market, offering high-quality, locally manufactured products at competitive prices. Consumers now prefer Somplastic’s products due to their affordability, durability, and availability.
Shuraako’s financing model, particularly its Murabaha financing, played a crucial role in Somplastic’s success. Unlike conventional loans, Murabaha financing provided the factory with flexible repayment terms, allowing the business to focus on growth without financial strain. This support empowered the company to scale efficiently while maintaining full control over its operations.
Looking Ahead: Future Growth & Expansion
Somplastic’s journey is far from over. With a solid foundation and an ever-growing market presence, the company is setting its sights on further expansion. Plans are underway to enter new markets, introduce innovative plastic products, and enhance production efficiency. With its commitment to local manufacturing, job creation, and sustainability.
Through strategic investment and entrepreneurial vision, local industries can thrive, create jobs, and drive economic growth. Shuraako’s support has not only helped one factory expand but has also contributed to a larger movement towards self-sufficiency and industrial progress in Somalia.
