NAIROBI, Kenya, May 24 – Car & General has announced plans to exit the poultry business in Tanzania which has partly contributed to the company’s loss of Sh37 million in the first six months that ended on March 31, 2017.
The firm’s Board says the Moshi-based Kibo Poultry – one of the oldest chicken broiler farms in the region – has continued to perform poorly resulting in the decision to exit the business in due course.
“In Tanzania, the economy is extremely challenging given current government reforms. We maintain strong market share in our three-wheeler business. We have made good progress in growing our two-wheeler business and continue to invest in this. Our other businesses have remained stable. Margins remain low and we expect these challenging times to continue in the second half of the year,” the firm indicated.
C&G has also attributed the half-year loss to the loss of currency devaluation in the region that saw the firm lose Sh83 million.
Moreover, the interest rate cap in Kenya has resulted in reduced sales volumes in 2016 in equipment business that includes generators, construction equipment, tractors, and forklifts.
“Uganda has performed reasonably (well). Rwanda has been negatively impacted by currency movements but will recover in the second half,” the firm noted.
Turnover for the first six months, however, went up by 8 percent to Sh5.2 billion compared to the same period in the previous year.
The firm is headquartered in Nairobi, Kenya, with branches in Mombasa, Kisumu, Nakuru, Kitengela, and Eldoret.
It has subsidiaries in Kampala wit branches in Ndeeba and Mbarara. The Tanzania subsidiary is based in Dar-es-Salaam with branches in Arusha, Mwanza, and Zanzibar; and Rwanda, Kigali.
“The next six months are unpredictable given current risk aversion, constrained liquidity conditions, and the upcoming elections. Our focus will be on similar growth and operational efficiency. Critical to success will be to maintain high market shares across the board and to operate more efficiently in terms of working capital to reduce debt exposures and generate positive cash flow,” the firm noted.
Car & General is a supplier of generators, motorbikes, tuk-tuks, laundry equipment, lawn mowers, scooters, marine engines, construction equipment and a wide range of power generation, automotive and engineering products in East Africa.