Sameer Africa Plc is planning to re-enter the tyre business, nine months after it closed the business unit. The change of direction was inspired by the sustained demand for Yana Tyres and the success of Sameer’s turnaround efforts in 2020 the company said in a public notice.
Sameer Africa’s board of directors on 22nd January approved a four-year strategic plan anchored on its tyre business and real estate portfolio. The plan is part of Sameer Africa’s growth strategy that will run from 2021 to 2024.
The company plans to re-align the tyre business to meet the changing customer needs and the evolving distribution ecosystem. In addition, Sameer Africa intends to increase its investment in real estate by developing industrial properties and adding value to existing properties. The tyre business and the real estate portfolio are expected to be profitable in 2021.
Sameer Africa is involved in real estate, agribusiness, and manufacturing. In April 2020, the company made a surprise move and exited the tyre distribution business, its main income earner, due to poor performance of the segment.
According to the listed firm, the tyre business suffered over KSh 1 billion losses in 2018 and 2019.
“Despite the efforts of the Company in introducing new product lines, increasing the retail footprint
and in reduction of costs, the Company has not been successful in returning the business to the desired
profitability levels,” said the company at the time.
The closure of the tyre business cost Sameer Africa Plc nearly KSh223 million, Kshs 60 Million being payment of staff redundancy costs and KSh 163 million being impairment costs on fixed assets. The company sent home 73 workers after the shutdown.
Sameer Africa Quits 50-Year Old Tyre Business
