Sameer Africa Limited, part of the Sameer Group of Companies has been in operation in Kenya previously as Firestone EA (1969) Ltd and is the only local manufacturer of tyres and tubes. The change of the corporate identity followed the pullout of Bridgestone Corporation of Japan, in 2005. The company manufactures most of the tyres it deals in at its Nairobi factory, though a few brands that are not locally manufactured are imported from the company’s international strategic partners.
NAIROBIST ANALYST REPORT: SAMEER AFRICA LIMITED
SAMEER AFRICA LIMITED
*annualized figures based on H1 06.
Sameer Africa Limited
Over the last year the company has invested heavily in the rebranding and in the expansion of its production capacity. The company produces about 2,500 tyres a day, and still hopes to boost the capacity.
Its product range covers the whole consumer categories from passenger car tyres, light and medium commercial vehicle tyres, heavy commercial tyres for buses and trucks, agricultural (tractor) tyres as well as off-the-road tyres, all produced under brand name Yana tyres.
The company operated in a near monopoly in the local market but the regulatory authorities have since allowed importation, which has seen the entry of major European tyre manufacturers like Pirelli of Italy and Michellin of France exporting their products to Kenya. Later entrants from Asia have also made significant in-roads through brands like Hankook, Dunlop, Goodyear and Bridgestone. The imports have a combined market share of 40% upwards.
Regionally, Yana tyres are cutting a niche in the market that is occupied by international brands produced by among others Pirelli, Michelin and Continental tyres. They are however set to compete successfully owing to the company’s specific production targeting the African market and the products’ unique stability. The company has already established a presence in Eastern Africa countries, with a respectable 40% market share in Uganda. With increased output capacity following additional investment in plant, the company is looking forward to sell its products even beyond the COMESA region, to the whole of Africa.
The company’s target market locally and regionally is very price-sensitive; this has allowed cheaper imports of lesser quality erode the company’s market.
Unfair trade practices under importation protocol within the COMESA trading block have seen some countries export finished tyres to Kenya, usually at a much lower cost than would have cost if they were produced within these countries.
The market needs are constantly shifting with some cars being engineered to use only specific tyres that the company would not be producing.
Appreciation of the Kenyan Shilling against other regional currencies is hurting the value of exports which are set to increase to about 40% of total production; this is however mitigated by counter-effect on the importation price of raw materials.
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