Eveready eyes October for subsidiary launch

Eveready East Africa will from October enter new product lines to cut reliance on the battery market and halt falling sales.

The firm’s CEO, Jackson Mutua, said the company will use a new subsidiary to penetrate areas that do not form part of its core business.

Shareholders last year approved the formation of the new subsidiary known as Flamingo Properties Ltd to speed up the diversification.

“We cannot disclose the products now due to CMA (Capital Markets Authority) listing regulations, but the fast-moving consumer goods will not be manufactured locally,” said Mr Mutua.

Its core business is the manufacture of dry cells, which account for nearly 90 per cent of its sales, and sale of flashlights and razors.

The battery firm has seen a consistent decline in sales volumes and profitability in the last five years, owing to a shift towards electricity-powered gadgets as more Kenyans get connected to the national power grid.

Cut-throat competition from cheap imports, mostly from China, and new entrants have also hurt the Nakuru-based firm.

Its annual revenues have dropped from Sh2.3 billion in 2005 to Sh1.37 billion last year and the firm has never paid a dividend since it was listed at the Nairobi bourse in 2006.

Eveready’s share has gained 41 per cent over the past six months to Sh2.75, which is below the IPO price of Sh9.50.