Tyre distributor Sameer Africa resolved to close down on 20 April 2020. 73 employees will be made redundant by the end of May as a result. Local news reports quote acting managing director Peter Gitonga as saying that several different efforts to keep the company afloat had failed.
The Sameer Africa tyre plant in Nairobi, Kenya is being dismantled, with equipment being relocated to India, according to local news reports. This follows the cessation of production back in September 2016 following an announcement last June that that plant would close due to high competition from cheap imported tyres. The company did not specify if the equipment was being sold or used to establish manufacturing in India.
On Wednesday 8 June, Sameer Africa CEO Allan Walmsley told local newspapers that the firm, which makes Yana brand tyres, would earn higher margins contracting-manufacturing with tyre producers in China and India. No names were overtly mentioned, but an unnamed Indian firm that bid unsuccessfully Sameer during the last year is thought to be a key suitor. No date for the closure of production and transition to contract manufacturing has been given, but judging by the nature of speculation surrounding Sameer’s ownership and business in general it is likely to be an ongoing process.
Sameer Africa Ltd., is planning to enter the Rwandan tyre market in the next two years, company executives told Bloomberg recently. At the same time, the company is said to be exploring the possibility of setting up a subsidiary in Nigeria. However, in light of ongoing share sale talks since last summer, this could be […]
Bridgestone Corporation has sold its 14.9 per cent share in Sameer Africa Ltd, and the Kenyan tyre maker says it has found a potential strategic investor to replace the Japanese firm as a source of technical assistance and support. To facilitate this new arrangement, the approximately 41.5 million shares Bridgestone held in Sameer Africa have been transferred to Sameer Investments Limited.
As regular tyrepress.com readers know, used tyres are often a point of discussion in the UK. They’re also a talking point in Bahrain, but the island nation’s issues with used tyres differ somewhat from ours. The Gulf Daily News reported on 5 December that storage centres are being set up across Bahrain; the purpose of these is to house used tyres in order, as the newspaper writes, to “stop saboteurs from burning them on the street and to protect the environment from fumes and smoke.”
Africa is a market that presents tyre manufacturers with both problems and opportunities. Theoretically, the potential may be there for a thriving industry and market, yet unreliable infrastructure, taxation issues and political instability are all features of the African tyre industry landscape that make operations complicated. However, despite such hurdles, the situation in some areas is improving.
In mid-July Dunlop Nigeria announced the planned closure of its factory, claiming tariff reductions on imported goods as a deciding factor. In early 2007 the Nigerian government reduced the tariff on imported truck and bus tyres from 40 per cent to 10 per cent, undermining, in Dunlop’s view, the investments it had made in expanding its radial production programme.
Kenyan manufacturer Sameer Africa has begun importing tyres from China to meet a strong demand for low priced products in its home market. This, however, says Kenya’s Business Daily newspaper, is a measure placing the company in deeper debt as it must borrow heavily to pay invoices. The company installed a new £84,000 light truck tyre assembly machine last July and also increased capacity, however the company continues to struggle, as it has since changing its name from Firestone to Yana tyres three years ago.
“We were not making enough money from our tyre production unit so we borrowed to finance the importation of tyres that we don’t make” said Sameer managing director, Eric Kimani. The Chinese brands imported, says Mr. Kimani, include Dyna and Triangle. “The tyres are affordable but very durable. When we import we don’t just bring anything, we buy quality,” he added.
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.
The company formerly know as Firestone East Africa was given a new logo and rename Sameer Africa at a ceremony in Nairobi. The new company will operate as an independent tyre maker, according to reports by Nairobi’s The Nation newspaper.
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