Eveready unveils diversification model for future growth

Managing Director Mr. Jackson Mutua. Eveready has announced closure of its Nakuru plant in favour of sourcing cheaply from Egypt.

• Business plans geared at enhancing the firm’s competitive edge
• Company extends product portfolio to personal care, energy, real estate, automotive battery categories
• Reiterates shift to commercial oriented focus by closing manufacturing operation

Eveready East Africa Limited, one of the region’s leading manufacturer of dry cell batteries has rolled out an ambitious diversification business model as part of its five year strategy aimed at increasing efficiency in its business processes and continuously satisfy consumer’s evolving needs in the East Africa region.

The strategy is hinged on bolstering the businesses’ commercial operations and involves a review of its technology and processes, product diversification, regional expansion, its route to market programs and undertaking measures to strengthen its balance sheet.

Under the technology and process pillar, the organization will identify, evaluate and implement low cost sourcing options for the dry cell battery product.

Since its incorporation in 1967, Eveready East Africa has been synonymous with the manufacture of the dry cell battery commonly known as the D battery.

The company invested in a manufacturing plant in Nakuru. The battery has remained the manufacturer’s largest revenue contributor with over 60pc reliance. Additionally, the company has historical linkages through trade and shareholder relationship with US firms Eveready Inc. and Energizer Inc. This formal relationships have allowed access to quality products and technology in the energy and lifestyle product categories.

The proliferation of cheap dry cell batteries into the market has seen the company review its operations to ensure continued profitability and competitiveness in an increasingly cut-throat business. Like many consumer-driven entities, Eveready East Africa is increasingly viewing its manufacturing, marketing and distribution and means of achieving greater efficiencies without impacting negatively on the consumer.

An upshot of the review is the implementation of the five year strategy that places diversification at the center of company’s business. One of the bold measures announced is the closure of its manufacturing plant in Nakuru and the consequent redundancy of up to 98 roles. The company will henceforth source the D batteries from the Energizer factory in Egypt.

In addition, the closure offers an opportunity to venture into one of its other diversification strategy planks, Real Estate. The company has set up a subsidiary – Flamingo Properties Kenya Ltd – to spearhead its foray into the venture. The twenty acres of land in Nakuru will be one of its flagship investment. The details of the real estate investments will be announced later.

Eveready East Africa’s Managing Director, Jackson Mutua said “the closure of (Nakuru) 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.”

Mr. Mutua said with the board’s approval, the company started implementing the strategy last year. “I am happy to announce that our Ugandan subsidiary is operational and we have signed an agreement with a competent distributor in Tanzania. The venture into real estate will be mutually beneficial to our shareholders and also poised to deepen our investment in the county of Nakuru.”

On product diversification, the company has already launched a leading brand of automotive batteries known as TURBO®. Eveready will soon launch new products across personal care, energy and household categories.