Sameer Africa is set to close down its manufacturing plant here in Nairobi in favour of importing tyres. The company which makes the Yana tyres brand is set to close down the factory and instead import tyres from offshore manufacturers in Asia.
According to Sameer Africa Chief Executive Officer Allan Walmsley the company’s board of directors unanimously made the decision after receiving the necessary approval from the Capital Markets Authority. “As a result, the company will incur a one-off charge in respect of plant and inventory impairment and employee severance costs estimated at approximately Kshs. 725 million. The earnings for the current financial year are therefore expected to be lower by more than 25 per cent of the earnings reported for the same period in 2015.”
The company has also issued a profit warning due to expected impairment and employee severance costs. The struggling manufacturer had reduced its local production due to high competition from cheap arrivals and joined the importers.
However, there will be no impact on customers, end-users and the supply of the Yana brand to the East African market. Yana Tyres will continue to be engineered under the supervision of the company’s own chemists and engineers.
Sameer Africa will also continue to invest in research and development to offer the market tyres that are purpose-built for African roads and will continue with the roll-outs of its Yana Tyre Centre offering across East Africa.