Eveready seeks Comesa watchdog’s approval to distribute global brands

Eveready is seeking the approval of Common Market for Eastern and Southern Africa Competition Commission (CCC) for importation and distribution of a range of products on behalf of international companies.

The move follows an agreement entered into between Eveready and three multinational companies that would see them distribute their products in the regional market.

The CCC will look into the nature of the agreement, pursuant to Article 16 of the Regulations to determine whether the agreements are compatible with the Common Market, before giving Eveready the green light.

“The Comesa Competition Commission wishes to notify the general public and stakeholders that it has received requests for authorisation of agreements between Eveready East Africa Limited and the multinationals for distribution of their products,” said CCC in a statement. 

Agreements are prohibited in the common market if they are likely to have an effect on trade between member states and have as their object the prevention, restriction or distortion of competition within the regional market.

The commission is seeking views from the competitors, suppliers and customers who are required to submit written representations to it with regard to the agreement between Eveready and the said multinationals. Eveready is trying to diversify its business by widening their revenue stream at a time when the loss making company is struggling to remain relevant in the competitive market.

Finance costs nearly doubled

The troubled firm’s finance costs nearly doubled to Sh104.1 million in the period to September 30, 2015 compared to Sh56.5 million a year earlier.
It in October 2014 announced that low sales due to illegal imports of cheap batteries and high energy costs would see it shut down its production factory in favour of importing batteries from the Energizer Egypt plant.

READ: Eveready to sell Nakuru land as it shelves real estate plan

Some of the companies that the firm has entered into agreement with include Chloride Egypt SAE, manufacturers of car and other batteries that Eveready will distribute on their behalf.

Others are Pakistan based Sayyed Engineers Limited— makers of pens under the brand name Piano and Clorox Sub-Saharan Limited, which is a US based company that deals with cleaning, homecare, water filtration and personal care products.

Recently, Eveready changed its real estate plans, choosing to sell off a prime plot in Nakuru that was earmarked for development. The company, which issued a profit warning last week, is seeking shareholders’ approval to put up for sale the 18.5 acre piece of land on which Eveready’s redundant factory sits in Nakuru town.

According to the management, a feasibility study conducted on the factory property failed to endorse the viability of developing a shopping mall and apartments, hence the decision to sell off the land.

Eveready had wanted to build a shopping mall on the factory land but now says it has shelved this plan in favour of disposing of the land to retire expensive debt, reduce interest burden, and generate free cash flow.