Eveready starts sale of motor vehicle batteries

Eveready Kenya is set to venture into sale of car batteries to reverse a plunge in fortunes caused by low demand for dry cells and competition from cheap Chinese imports.

Sales of the Nairobi Securities Exchange-listed US multinational have dropped by a third since the company went public through an IPO about seven years ago.

The Nakuru-based firm says it will begin selling automotive-type lead acid batteries under the brand names Turbo and Turbo Plus.

“The Turbo and Turbo Plus range of high quality lead acid and maintenance-free car batteries are expected to compete effectively in the highly competitive car battery segment,” said Eveready.

The company will also introduce a new range of industrial lighting bulbs, fluorescent tubes and energy-efficient bulbs under its brand name Eveready.

The firm’s CEO, Jackson Mutua, said the company is banking on fast-moving-consumer- goods (FMCG) to turn around its fortunes. “We did a market research and established there is growing demand for such goods,” said Mr Mutua.

Eveready’s entry into the car battery business is informed by the increasing need for auto batteries given the double-digit growth in new and second-hand car sales driven by Kenya’s growing middle class with disposable incomes.

“The company also plans to introduce by end of June 2014 an additional range to its household lighting portfolio comprised of an assortment of household and industrial bulbs, of the incandescent and energy saving types.”

READ: Eveready bets on Uganda unit to grow sales

This puts Eveready in a head-to-head battle with AutoXpress and Kingsway Tyres which retail Chloride Exide and Delkor car batteries respectively. Eveready manufactures size D dry cells at its Nakuru plant which account for about 62 per cent of total sales.

It imports a variety of Eveready and Energizer batteries and flashlights as well as personal care items such as shavers and razors under the Schick brand, which make up the remaining 38 per cent of annual turnover.

Eveready’s sales have dipped to Sh1.4 billion last year from Sh2.02 billion in 2006 when it listed at the NSE. Its net profit has plunged to Sh45.4 million from Sh165.5 million during the period.

The performance has been a bane to Eveready shareholders who last received a dividend of Sh0.45 in 2007.

It paid Sh0.60 per share on its first year of listing at the Nairobi bourse.

Eveready blames this decline in sales and profitability on the shift towards electricity-powered gadgets as more Kenyans get connected to the national power grid.

It has also facing cut-throat competition from cheap battery imports mostly from China.