Eveready East Africa finally announced the closure of its Nakuru-based battery making factory, bringing the curtains down on an iconic brand in the energy sector.
If you grew up in the 1980s and 90s you must have seen adverts about Eveready Shika Power promoting dry cells.
Eveready has been a part of Kenyans’ lives for years and this move left many wondering which company is next as the business environment gets more hostile. The company’s financial report for the year ending September 30, 2014, was an indicator that it had lost its power. Net profit fell from Shh70 million to Sh44.1 million in 2013. This left many people guessing about the fate of the company and, a year later, it announced that it was closing its only factory in Kenya.
Managing Director Jackson Mutua attributed the closure to the “proliferation of cheap dry cells batteries in the market.”
Eveready will now outsource the cells from their sister company, Energizer, which is based Egypt. In Kenya, it will venture into real estate business, which has become a growth area of the economy.
Two days later, Cadbury Kenya announced plans to close its manufacturing plant in Nairobi in what it called a “global transformation strategy to reinvent its supply chain.”
What went wrong?
Policies that exposed local industries from dumping by international companies is the reason the textile and apparel industry died in the 1980s. Over the years, successful companies have opted to shut down their Kenyan factories due to high cost of doing business. Conglomerates like Procter & Gamble, Colgate Palmolive and Reckitt Benckiser closed their plants in Kenya and opted to source from other countries. Egypt is gaining from all these companies, as both Cadbury and Eveready will be obtaining their products from the North African nation.
Egypt has a more conducive business climate compared to Kenya. Labour and electricity costs, key drivers in the manufacturing industry, are relatively low in Egypt than in Kenya. There are fears that more multinationals are likely to move manufacturing to cheaper destinations.