Sameer Africa Planning to Exit Kenyan Market

Sameer Africa, is in the process of weighing out the option of closing down its Nairobi tyre factory due to the increased number of competitors in the market with cheap products thus affecting them.

The company stated that the Kenyan tyre market has been overtaken by cheap car tyres from the Asian markets that led the company experiencing losses for two consecutive years.

Sameer Africa stated that it had cut its 2015 after tax losses from Sh.66.9 million to Sh.15.6 million on cheap raw material prices and cost cutting. Its total revenue fell from Sh.3.77 billion to Sh.3.36 billion while operating costs fell from Sh.1.01 million in 2014 to Sh.916.1 million in 2015.

Some other reasons that makes the company considering its closure is the fact that the Kenyan government has not taken any measure to help in curbing of the low quality and cheap tyres that have taken over the market.

Naushad Merali, the company’s owner of over 70 per cent stated that most African markets have not yet implemented measures that discourage the free movement of subsidized tyres from the East into their countries.

The company has stated that this year, efficacy and viability of local manufacturing will be a key agenda for the board directors, adding that it is also in the process of exploring alternative manufacturing and sourcing options around the world.

Products manufactured by the Sameer group are exported to markets across Africa including Burundi, South Sudan, Tanzania and Uganda.

Article by Vera Shawiza.