Eveready East Africa Limited has set in motion plans to dispose of its 18.5 acres piece of land in Nakuru to support its business.
Eveready, one of the region’s leading suppliers of dry cell batteries has issued a notice calling for an extraordinary general meeting on October 6, 2016. In the meeting, it will be seeking the green light to sell the property and change its name to Eveready East Africa PLC.
“The Company’s levels of borrowing are unsustainable and the persistent high-interest rate regime continues to hurt our business and erode shareholder value,” said Jackson Mutua, Eveready’s Managing Director.
According to the published accounts of 2015, the company spent Sh104.1m [2014: Sh56.5m] on finance costs due to its borrowing levels which includes a foreign denominated currency component which contributed significantly to the loss recorded in the year. The Company was profitable at operations.
“This sale is also part of management’s strategy to unlock funds for investment in more productive areas of the company” said Mutua.
The Nakuru Property has been largely idle since the company closed its manufacturing facility in 2014.
“A feasibility study conducted on the property failed to give an unequivocal go-ahead for the development of a mixed-used complex. Investing in a distribution center in Nairobi complements our retail model and eliminates our property leasing costs,” said Mutua.
The Company’s business model changed to a retail one with the cessation of manufacturing in 2014.
The Company continues to pursue various initiatives as part of its five-year strategy aimed at increasing the size of its business through diversification and increasing efficiency in its business processes and in that regard recently signed a partnership with Clorox Sub-Saharan Africa Ltd to distribute the Clorox® bleach in the Kenyan market. The Company has also introduced its own brand of powder washing detergent, Everclean® to the Kenyan consumer.
Mutua said, “Eveready’s strength continues to lie in its distribution infrastructure. We intend to continue to leverage on this strength in order to grow our business”.
According to the notice published on 8 September 2016, the EGM will commence at 11am at Merica Hotel, Nakuru.