BY NBM WRITER
Eveready East Africa Limited, once the region’s leading manufacturer of dry cell batteries, is undergoing a complete DNA change that is replacing its energy business with fast-moving consumer goods.
This is part of its five-year diversification strategy aimed at keeping it afloat in the face of new technologies of rechargeable lighting systems and solar energy, which have eaten up a huge chunk of the dry cells market.
Since its incorporation in 1967, Eveready East Africa has been synonymous with the manufacture of the dry cell batteries commonly known as the D battery, at its factory in the heart of Nakuru town. But it closed the factory last year, citing a hostile business environment in Kenya, which made manufacturing a very expensive affair, and now imports the dry cells for distribution.
“The company has historical linkages through trade and shareholder relationship with US firms Eveready Inc,” says Managing Director Jackson Mutua. “These relationships have allowed it to access quality products and technology in the energy and lifestyle products categories.”
The implementation of the company’s five-year strategy, launched in September 2014, places diversification at the centre of Eveready’s business. At its 49th AGM held on April 14th 2016, the company said it has already launched a quality range of car batteries for a broad spectrum of usage under the TURBO brand in its household category.
Mr Mutua reported that Eveready has also introduced a new range of incandescent and energy saving bulbs under the Eveready brand name. Besides, it has partnered with Clorox Sub Sahara Ltd to distribute the Clorox brand of household bleach and is exploring more opportunities to unveil new products across personal care and household categories in the coming months.
“Consumer and market reception of our new products so far has been fantastic and we look forward to embedding the new products into our consumer spending culture,” Mr Mutua said in an interview.
“New business presently accounts for 10% of Eveready’s revenues and we look forward to deepening the contribution of these new products to our business. We will utilise our superior route to market capabilities to achieve this focus,” he added.
Eveready’s personal care division offers a diversified range of consumer products in the wet shave category under a portfolio that includes well established brand names such as Schick and Wilkinson Sword men’s and women’s shaving systems and disposables. Eveready’s household products division has a range of portable power solutions, anchored by the Energizer and Eveready brands. Eveready has also introduced the PIANO range of writing instruments and branded bulbs.
This diversification strategy had started paying off with new products contributing Sh120 million in revenues last year. The amount represents 10% of the Sh1.2 billion turnover realised last year.
The company, which is positioning itself as a trading and distribution company for fast moving consumer goods, has launched four products over the past four years and plans to launch two more products this year. The Turbo battery brand is owned by Eveready but manufactured by Chloride Egypt while Clorox is being manufactured locally through partnership with Clorox Africa.
To increase efficiency in the new distribution business, Mutua says the company has rolled out a retail automation programme that will generate customer and consumer insights to help drive sales for its products.
He said the company’s revenues grew by Sh600 million in 2015 after restating the value of its assets in line with international accounting standards. The sale of the manufacturing plant, which was closed last year in Nakuru, he said, had stalled after failing to get competitive prices for the property, which includes manufacturing equipment and the land on which it sits.
The property was valued at Sh120 million before closure remains idle. “We are pursuing targeted selling of the property to investors who understand the value of the assets as opposed to wholesale disposal,” he said.
He emphasised that Eveready will unveil new products across personal care and household categories in the coming months.
The D dry cell’s portfolio’s contribution to the business has declined over the years due to shrinking demand. Eveready Chairperson Lucy Waithaka is upbeat about the new direction.
“We will continuously review our product portfolio offering and mix in order to meet the needs of our consumers and add value to our shareholders,” she said in an interview with NBM.
With a turnaround in revenues brought about the new line of business, the company’s hopes to soon break the drought of dividends, which has been a sticky issue at its AGMs. For eight years, the company has not paid any dividend due to a spell of low revenues, sparked off by an influx of counterfeits in the market..”
