, NAIROBI, May 28 – Sameer Group Chairman Naushad Merali has said he’s looking to diversify the group’s portfolio as a way of mitigating the reduced profit that some of his companies are experiencing.
Without divulging exact details Merali stated that he felt the construction of a Sh2.2 billion business park was one way that the group hoped to increase its earnings.
“Once it’s complete the park will form a major income stream for Yana Tyres, which has seen its profits dwindle with increased competition from cheaper imports,” he said.
Speaking during the commissioning of the Sameer Business Park, Merali said increased international fuel costs, a raw material for tyre production, is an indicator that Yana tires is bound to face even harder times in the near future.
However, Merali was optimistic that the park, which will stand on 50,000 square meters and contain 30 state of the art showrooms and offices, would mitigate some of the losses.
“The project is based on the business park concept which is already thriving in developed countries and will be one of Kenya’s first projects of this kind,” he said, adding that the park should be up and running in the next 18 months.
The business magnate said the park would be built on a 10-acre piece of land that holds the Yana tyres factory and will comprise three storied sections plus a parking area that can accommodate about 575 vehicles.
He said that the park is a joint venture between Sameer Africa limited and Sameer Telkom Limited, which are both members of the Sameer group.
Two days ago, Sameer group issued a profit warning to its shareholders citing post election violence as one of the reasons for the expected decline in profit.
Merali expressed optimism that the group’s shareholders should see better returns by 2010 when the park is complete.