Once known for manufacturing tyres, the firm turned into an importer of tyres in 2016, citing stiff competition from cheap tyres from markets such as China.

But in April 2020, Sameer Africa dropped another shocker. After 50 years in the tyre business, it called it quits.

Established in Kenya in 1969 as Firestone East Africa Limited, the company’s principal business has now been abandoned as it seeks its fortunes in real estate.

Sameer chairman Erastus Mwongera said the board considered options and settled on property portfolio development and management.

“The board on 20 April 2020 took the weighty decision to cease operations of the tyre business and focus on the group’s real estate portfolio,” said Mr. Mwongera.

“We have been in the real estate business for many years and have achieved growth and profitability from this segment of the business.”

Sameer’s experience with tyres was almost similar to what Car & General experienced in the 1990s before the change strategy.

Since launching in Nakuru in 1936 it, Car & General is now the company behind a wide range of power generation, automotive, and engineering products in East Africa.

But that is not what it wanted to do at the beginning. The firm was for long involved in the manufacture and sale of retread tyres. But a string of losses forced it into a radical restructuring in 1996 with net loss has increased 100 times to Sh106.5 million.

IMPORTS COMPETITION

“When we look at our revenue mix today, just about under one percent comes from the business lines we had in 1996,” says Mr. Gidoomal.

“What we realized at that point is that with the liberalization of Kenya, it would be impossible to compete with imported goods that were coming from places such as China.”

The radical changes included selling operations such as Car & General Industries and Car & General Automotive which were manufacturing and selling re-tread tyres, brake linings, and gumboots among other products.

Another entity, Eveready East Africa, is undergoing a radical change. Once known for its Eveready batteries and the nine lives logo, the firm is no longer stocking this brand.

The firm had a complicated relationship with Energizer International which owns 10.03 percent of Eveready.

While Energizer owned a 10.03 percent stake it controlled more than 80 percent of the company’s revenues as a chief supplier of Eveready batteries cut the 50-year old contract in 2015.

This left Eveready bearing a company name yet it could no longer supply the Eveready batteries.

The management has had to start working on a new brand, Turbo, and embarked on selling imported dry cells and car batteries and also trading in a range of flashlights and detergents.

Eveready’s task of re-organizing the business was completed in March last year as it pledges to focus on growing this new brand — Turbo.

In the financial sector, Housing Finance or simply HF Group is also on a strategic shift.

RESIDENTIAL ESTATES

At the end of last year, the group divested from property development.

This means that all ongoing projects will be finalized as earlier planned, but no new property development projects will be initiated.

The move is aimed at reducing HF exposure to the real estate market that has slowed down considerably in the past few years as the uptake of houses stalled.

HF was founded in 1913 as the Housing Finance Company of Kenya and incorporated as the premier mortgage finance institution running under the slogan ‘In pursuit of shelter’.

The firm was behind major projects such as thousands of residential houses in Buruburu Estate between 1973 and 1978 as well as the Komarock Estate in the 1980s.

But a series of rebranding and expanding into new areas such as banking services has seen it reduce the focus on this key business that made it to be defined as a mortgage financier.

Source: Companies take the path of extreme makeover by Patrick Alushula