At a press conference in Nairobi, the Nairobi Securities Exchange listed firm noted that it was no longer able to keep up with its core business. It will be closing its plant in Nakuru, a key industrial town in Kenya.
“The closure of our plant reiterates the shift to a commercial oriented entity. It has taken away the long cash conversion cycles and offers the flexibility to quickly react to market demands whilst focusing on our core business of distribution,” said managing director Jackson Mutua in a statement.
The closure of the manufacturing plant which has been tantamount with the manufacturing of the dry cell battery that has remained its largest revenue contributor will lead to the redundancy of 98 roles. Nonetheless, the listed firm will henceforth source the dry cell batteries from its Energizer factory in Egypt.
The firm has been fighting hard against counterfeit dry cells in the Kenyan market. Eveready’s sales plunged to 1.4 billion Kenyan shillings in 2013, while its net profit dipped to 45.4 million Kenyan shillings 165.5 million Kenyan shillings during the period.
Hinged on a new strategy to increase efficiency by bolstering commercial operations, the company says it will now implement a low cost sourcing option for the dry cell battery product.
However to remain a key player in Kenya’s economic circles, the firm has opted to focus more on the real estate segment. This it will champion through its new subsidiary Flamingo Properties Kenya Ltd.
To grow its business in the region, the firm last year announced the opening up of another subsidiary in Uganda to support its distribution channels.
“With the board’s approval, we started implementing this strategy last year and I am happy to announce that our Ugandan subsidiary is operational and we have signed an agreement with a competent distributor in Tanzania,” Mutua explained.