Sameer’s Yana Tyres Struggling to Take Off

Sameer Africa recently raised its tyre prices by between four and six per cent, the Nairobi Nation reports. However, price increases are unlikely to help sales of the manufacturer’s Yana brand. Local news reports that stiff competition from cheap imports, especially from the Korea, Egypt and South Africa have left the company at a disadvantage, following the price increase. “Kenya has no competitive advantage, and you can get any tyre you want from China at any price,” managing director Eric Kimani told journalists.

The influx of imported tyres from these destinations reportedly increased significantly in 2005, following the introduction of the East African Community’s (EAC) Common External Tariff (CET). Under the CET, the EAC member states (Kenya, Uganda and Tanzania) agreed to a common tax rate of 10 per cent on imports of new rubber tyres for buses and lorries. Initially, the import duty on tyres stood at between 25 and 35 per cent as a way of protecting local manufacturers.

Newspapers report that Sameer Africa has been “adversely affected” by the post election instability the country is currently experiencing. As a result the company expects to lose about 150 million Kenyan shillings (roughly £1 million) in revenue, due to closed dealerships in the worst affected areas. The company also took a direct hit when one of its area sales depots was broken into during the period, and lost tyre stocks worth 8.5 million shillings (£60,000).

Sameer’s various difficulties come in spite of opening additional Yana tyre centres. Furthermore, in July 2007, it inaugurated a new light truck tyre assembly machine at a cost of 12 million (£84,000). According to news reports, Sameer Africa’s tyre exports to Comesa and the EAC now contribute more than 30 per cent of its total revenue. Sameer currently supplying tyres to Tanzania, Uganda, Rwanda, Burundi, Malawi, Zambia, the Democratic Republic of Congo, Sudan and Somalia, among others.

The company introduced its Yana brand of tyres in market in November 2005 replacing Firestone Tyres, which were being manufactured under contract from Bridgestone Corporation