Stiff competition from other imports and lack of adequate stockpiles has forced Sameer Africa Limited Plc to close down its more than 50 years tyre business, effectively rendering 73 employees engaged in this segment, jobless.
In a notice to Secretary-General, Amalgamated Union of Kenya Metal Workers, Sameer Acting Managing Director Peter Gitonga says that this decision by the firm’s board arising from failure by several strategies undertaken to improve the business.
The board said it held a meeting on 20th April and resolved to close down the tyre business. The implication of this is that the roles of employees engaged at the affected locations will become redundant.
The affected employees will be sent home effective 31st May 2020 with severance pay to made.
Sameer Africa Group, listed at the Nairobi Securities Exchange(NSE) was established in Kenya in 1969 as Firestone East Africa Limited. The company’s principal business is the importation and sale of tyres and allied products and the letting of investment property.
The firm has been battling fierce competition from established and new tyre brands as well as fake ones. While it opted to appoint contract manufacturers in Asia to produce its brands as it sought to counter the cheaper prices of imported tyres, disruptions on its supply pipelines have made it impossible for the firm to achieve optimal stock levels.
Sameer Group has interests in agriculture, manufacturing, distribution, high-tech, construction, transport and finance.
The Group recorded a loss in net earnings of KSh 182.8 Million in the half-year period ended 30th June 2019 compared to a loss of KSh 11.6 Million the previous period. Its balance sheet size also shrunk from KSh 3.3 Billion to KSh 2.6 Billion.
With poor performance of its flagship tyre business, Sameer Africa is now expected to focus on leveraging on earnings from its property holdings, to remain afloat.
(Additional reporting by Euniah Mbabazi)
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