East African Community free trade threatens Firestone

The development of a free trade area by the EAC and the introduction of zero-rate tax on tractor tyres could eat into Firestone East Africa’s local market share according to local commentators. Further, a decision by the company to develop an equity retail chain is being met with resistance by the tyre trade. It is claimed that outgoing managing director Hiroshi Yamazaki had already expressed concerns that the new tariff decision by the government would severely affect the firm’s tractor tyre product line, which employs about 150 people.

Sources said unless the firm improves its level of efficiency, monthly production capacities of 900 for tractor tyres and 2,500 for truck and bus tyres would fall. Even in Africa the market for light trucks and passenger vehicles has been facing heavy pricing pressures as a result of both the flooding of the local market by cheap imports and counterfeits. .