Year End 31 Dec.
Sales down 13% yoy.
Gross Profit down 6% yoy.
Other Operating Profit up 197% yoy. Ahhh... no details on what this is. Sale of assets?
PAT up by 26% yoy BUT see "Other Operating Profit".
Sameer Africa was affected by the PEV in 2008 & the subsequent knock-on effect on sales later in the year. Anyway, that is history.
How will 2009 be?
IMHO, it will be much tougher. Why?
- Costs of production in Kenya remains high including interest costs, electricity & transport costs.
- The depreciation of the KShs vs US$ will hurt import input costs. Imported might be pricier if imported from non-US$ countries e.g. India
- Competition from multiple brands e.g. Pirelli, Michelin, Apollo, etc
Firestone used to be the first choice for Kenyans but I think there has been a major shift since it became Yana. Nakumatt sells 5+ brands & this shows a change in preferences. Yana tyres are NOT the cheapest in the market. Yana needs to sell the 'quality' of their brand to succeed.
2010 - The business park should be reaady but I do not trust naushad merali. I wonder how much SA will benefit from the business park vs merali. I think merali will suck the majority of the profits/gains from the business park.
Anyway, let's wait for the Annual Report.
Blog Archive
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2009
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February
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- ColdTusker applies for the Greatest Job in the World
- Kenya Airways - Oversold?
- Buy Kenyan, Build Kenya
- Family firms out-perform 'public' firms
- NSSF (Kenya) vs Temasek (Singapore)
- Fertilizer Imports have started - Scams come next
- Sameer Africa posts better results - Not really
- Coming soon to Kenya - The Grand Fertilizer Scam
- Tidbits - just for you!
- Rwanda - The New Hope of Africa Part 2
- Kenya Airport Authority - Corrupt & Inept
- I want me a BarackBerry
- Is South Africa really part of Sub-Saharan Africa?
- roocy kibaki blames saitoti for molo deaths
- KQ announces profit warning
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February
(15)
Thursday, February 19, 2009
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7 comments:
The exit of Firestone saw the emergence of Sameer Africa and its Yana brand of tyres that has been facing steep competition from other players in the industry. As for their profita bility i do not concur. Or is it a case of corporate cookbooks so as to influence share price for big players to dump their stock and make a kill?
Firestone/Bridgestone wanted to shut down the manufacturing operation & convert it to a pure trading concern.
Merali took control of the firm & preserved the manufacturing unit. Of course, the name & brand were withdrawn thus Sameer Africa & Yana came to be.
Sameer is a case of cheaper global competition and its not an easy one to manage. Their efforts to become COMESA players are not getting them out of the woods yet; high production costs are what its all about.
For Merali, as it is for everyone, its nothing personal, just business - remember how quickly they exited uchumi when they realized there's no money to make?
I think it makes sense for Sameer to exit manufacturing (as Bridgestone wanted) & develop the prime land the factory sits on.
Capitalism... of course, the loss of Kenyan manufacturing jobs & expertise would suck.
Another manufacturing merali firm in trouble. Eveready.
Sounds like Sameer was inculcated from competition by Moi for years and when that ended, they started going down.
Moral of the story?
Competition is good and it will ultimately make you a better business person.
If kenyans continue to find ways to block competition, they'll crumble in a global economy that is becoming continuously inter-connected. You need to learn how to operate outside of your African village.
KE: You mean insulated. To inculcate is to teach or instill.
Firestone/Bridgestone wanted to shut down the manufacturing operation & convert it to a pure trading concern. Merali took control of the firm & preserved the manufacturing unit. Of course, the name & brand were withdrawn thus Sameer Africa & Yana came to be.
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