Nairobi – Kenya’s Sameer Africa Ltd, which produces Yana-branded tires, is closing its plant in the Kenyan capital of Nairobi, the company has announced.
At a meeting of its board of directors 29 Aug, the board unanimously approved the closure of the facility with effect 30 Sept, and the outsourcing of production tires to factories in India and China.
Sameer Africa employed 527 as of December 2015. It is not clear how many people will be affected by the decision.
The company said that it was finalising agreements with two manufacturers, one in India and another in China, in order to avoid any interruption in the supply of Yana tires to the market.
According to Sameer Africa, the company’s market share has dropped as a result of cheap and subsidised tires entering its market.
As a result, it said, the high price market segment where the company’s locally manufactured Yana tires compete, has declined from a high of 62 percent in 2005, to only 25 percent today.
The company cited a 2005 reduction in customs duties, high cost of electricity and underutilisation of factory capacity as contributing factors to the closure.
The Nairobi facility was Kenya’s only tire manufacturing plant, and produced car, light truck, truck & bus, farm and OTR tires.. It had a capacity of 340,000 units/day, according to the ERJ Global Tire Report 2015, produced in association with US sister title Tire Business.