Sameer eyes Nigeria and Mauritius to boost sales

Tyre maker Sameer Africa is targeting new markets in Africa to boost its sales which have faced stiff competition from cheap Chinese imports.

Sameer chief executive Allan Walmsley said at a press briefing in Nairobi on Tuesday that the company had identified new markets in Madagascar, Nigeria, Mauritius and Mozambique.

The company said it would expand by establishing own outlets as well as local partnerships.

“We have tremendous challenges in terms of competition in the local market given the entry of cheap imports from China and other markets that for several years has seen us restructure our prices that eventually  end up affecting our revenue,” said Mr Walmsley during a media tour at its tyre manufacturing plant on Mombasa Road.

Sameer Africa last year signed a franchise deal with a Chinese manufacturer to produce cheap branded “Summit” tyres for its local market as the firm sought to cut production costs in Kenya to rev up its sales volumes.

The company said on Tuesday that it was still in talks with a strategic Asian investor who would inject Sh1 billion and technical expertise that would eventually help the firm scale up its local production and compete effectively with other rivals after modernising its manufacturing plant.

READ: Sameer to spin off tyre subsidiary in Sh1bn deal

The transaction in exchange for a stake would see the company relinquish 50 per cent shareholding to the new financier.

Mr Walmsley did not disclose when the transfer would be concluded but maintained that the talks were at advanced stage.

The idea to bring on an equity investor was mooted after Japanese multinational Bridgestone made an exit as one of the shareholders of a firm that is owned by billionaire businessman Naushad Merali.

Sameer ended its 2014 financial year at a Sh66.9 million net loss compared to a Sh401.2 million net profit the previous year.

It attributed the poor performance to increased competition from cheap imports and high energy costs.