Sameer Africa Managing Director Peter Gitonga, during an interview on February 12, 2021. Faced with the option of selling the trademark of the iconic Yana tyre brand, Sameer Africa opted for a comeback.
The tyre business, which the listed firm exited less than a year ago, is estimated to have led to losses of Sh1 billion in the last two years.
And it was a painful exit. The tyre venture was one of billionaire Naushad Merali’s – the majority owner of Sameer Group – passion projects and Sameer Africa’s core business.
It marked the end of an era for what was Kenya’s only tyre manufacturer that once employed more than 30,000 people both directly and indirectly.
Sameer Africa Managing Director Peter Gitonga, who has been at the firm for 35 years, described the exit as one of the most heart-wrenching business decisions. Read More
Very passionate
A decision, however, that had to be made despite dedicating a huge part of their lives and billions of shillings into growing the business.
“Merali was very passionate about it … all of us were,” he told Financial Standard in an exclusive interview.
“We came here very young, got married and raised families.”
Merali entered the tyre business in the late 1980s after acquiring Firestone, which was incorporated in Kenya in 1969.
To observers, the closure of the tyre business added to the growing heap of failed ventures by one of Kenya’s shrewdest deal makers.Merali, whose net worth is Sh39 billion ($370 million), according to Forbes 2015 Africa’s Richest report, is famed for making quick divestitures from businesses showing weak financial performance.But what has informed the surprise comeback? How will Sameer make the business profitable again?After exiting the tyre business, the firm shifted focus to its property portfolio.Gitonga talks of a four-year plan, riding on the success of turnaround efforts achieved last year.After four years, they’ll review progress and if the business will have picked up, they might even reopen the local manufacturing plant that was shut in 2016 as production shifted offshore.“There’s also the demand for the Yana tyre brand,” he said.“We’ve come a long way to reach that decision. We had said no more tyres, but the demand became too high.”Investors at the stock market, however, remain sceptical. Before the announcement, Sameer Africa shares were trading at Sh2.91 but have largely been stuck at Sh3 since.The firm is also starting from zero tyre stock. Back when they had […]