Firestone East Africa
21FIRESTONE EAST AFRICA (1969) LIMITED (NOW SAMEER AFRICA LIMITED):
SURVIVAL AFTER LIBERALISATION.
SUMMARY
Firestone East Africa (1969) Limited was incorporated as a joint venture between the government of Kenya and Firestone Tyre and Rubber Company of U.S.A in Kenya in 1969. The government of Kenya held shares through Industrial Commercial and Development Company (I.C.D.C) with 30% and Development Finance Company of Kenya (D.F.C.K) with 10% equity. Firestone Tyre and Rubber Company held the remaining 60% of shares.
Firestone East Africa (1969) Limited thereafter signed a management agreement with Firestone Tyre and Rubber Company where the latter agreed to provide; management and technical services, allow use of its trade marks and allow use of brand name.
At the time of its establishment, the Kenyan Government was actively encouraging export promotion and import substitution policies. Elements of this system were: -Licensing that limited or prohibited importation of goods competing with domestic manufacturers, -High duties on competing imports, -Relatively low duties on imported machinery and industrial inputs for industries that were doing production in Kenya and -Duty draw-back incentives for exporters.
This system insulated Firestone East Africa (1969) Limited from direct competition. Very little competition was experienced from three companies which were involved in tyre retread business.
In the early 1980’s, Firestone Tyre and Rubber Company sold 40.2% of its shares in Firestone East Africa (1969) Limited to a local company, Sameer Investment limited. In 1988, Bridgestone Corporation bought all assets of Firestone Tyre and Rubber Company (19.8%) of its remaining shares. The company went public by floating 20.2% of its shares to the public. The composition of shareholding in the company was: Sameer Investment Limited-64.9%, Bridgestone Corporation-14.9% and public-20.2%.
Firestone East Africa (1969) Limited was headed by six
SURVIVAL AFTER LIBERALISATION.
SUMMARY
Firestone East Africa (1969) Limited was incorporated as a joint venture between the government of Kenya and Firestone Tyre and Rubber Company of U.S.A in Kenya in 1969. The government of Kenya held shares through Industrial Commercial and Development Company (I.C.D.C) with 30% and Development Finance Company of Kenya (D.F.C.K) with 10% equity. Firestone Tyre and Rubber Company held the remaining 60% of shares.
Firestone East Africa (1969) Limited thereafter signed a management agreement with Firestone Tyre and Rubber Company where the latter agreed to provide; management and technical services, allow use of its trade marks and allow use of brand name.
At the time of its establishment, the Kenyan Government was actively encouraging export promotion and import substitution policies. Elements of this system were: -Licensing that limited or prohibited importation of goods competing with domestic manufacturers, -High duties on competing imports, -Relatively low duties on imported machinery and industrial inputs for industries that were doing production in Kenya and -Duty draw-back incentives for exporters.
This system insulated Firestone East Africa (1969) Limited from direct competition. Very little competition was experienced from three companies which were involved in tyre retread business.
In the early 1980’s, Firestone Tyre and Rubber Company sold 40.2% of its shares in Firestone East Africa (1969) Limited to a local company, Sameer Investment limited. In 1988, Bridgestone Corporation bought all assets of Firestone Tyre and Rubber Company (19.8%) of its remaining shares. The company went public by floating 20.2% of its shares to the public. The composition of shareholding in the company was: Sameer Investment Limited-64.9%, Bridgestone Corporation-14.9% and public-20.2%.
Firestone East Africa (1969) Limited was headed by six