Sameer Africa replaces senior staff in Uganda, Tanzania

A worker at the Sameer Africa tyre plant in Nairobi. Photo/FREDRICK ONYANGO 

By David Mugwe, The EastAfrica

Nairobi Securities Exchange (NSE) listed tyre maker Sameer Africa is set to complete a restructuring of its Uganda and Tanzania subsidiaries that is expected to see at least eight senior and middle managers replaced as the firm revamps its operations in the two countries.

Allan Walmsley, managing director of the tyre maker which is now eyeing the Somalia and Nigeria markets, in an interview with TheEastAfrican said that plans to replace at least eight senior and middle staff were almost complete, a move that is expected to breath in new life into the two subsidiaries whose profits dropped last year.

Revenues from the Tanzania subsidiary dropped by 20.6 per cent to Ksh487.27 million ($5.6 million) during the period ended December 2012 from Ksh613.88 million ($7.2 million) during the period ended December 2011 while profits attributable to the parent company fell sharply by 40.4 per cent to Ksh11.69 million ($135,885) from Ksh19.62 million ($230,709) over the same period of time.

The Uganda subsidiary saw its revenues remain flat at Ksh253.68 million ($2.9 million) for the period ended December last year from Ksh252.5 million for the period ended December the previous period while profits rose to Ksh30.36 million ($352,999) from Ksh3.62 million ($42,636).

“We are at 90 per cent complete…We would have finished some six weeks to two months ago. The challenge has just been in finding or identifying suitable replacements. We have had significant changes and in fact, you can see the turnaround already in the two territories,” said Mr Walmsley.

In its latest annual report, the tyre maker disclosed that total revenues from the two subsidiaries declined by 16 per cent to Ksh740.9 million ($8.6 million) and that although this translated into a profit, the decline had been caused by price competition from cheap imports as well as a less than optimal in-country management.

Sameer Africa had initially planned for the wholesale replacement of senior staff in the two countries to be complete by the end of March this year.

“Our pricing was a little bit out of sync with the market and we did not feel that the team was sufficiently aggressive in terms of covering the ground and we did see deterioration in the accounts receivable,” said Mr Walmsley.

Combined revenues for the tyre maker rose marginally by 7.8 per cent to Ksh3.96 billion ($46.04 million) for the period ended December last year from Ksh3.67 billion ($43.2 million) for the period ended December during the previous period.

on the same period the group profits after tax almost doubled to Ksh189.75 million ($2.2 million) from Ksh96.94 million ($1.1 million) on account of a 25.8 per cent increase in other operating income which was helped by a sharp rise in rental income and a corresponding sharp drop in financing costs.

Africa’s stock at the Nairobi bourse closed at Ksh5.30 ($0.06) as at the close of trading last Tuesday and had risen by 27.71 per cent when compared to its close of Ksh4.15 ($0.05) on the last trading day of last year