Executive Summary
Sameer Africa Limited is an African company that carries its operations in Kenya, Uganda and Tanzania and which is involved in the manufacture, import and sale of tires and tubes. It carries out several of its operations under the Yana Tyres registered trademark. Sameer Africa Limited came into being in April 2005 when the previous Firestone East Africa ceased being the brand name of the company. Its headquarters are located in Nairobi, Kenya. The following study will reflect upon the corporate governance of Sameer Africa as being part of the Nairobi Stock Exchange as well as uplifting the codes stipulated by the Capital Markets Authority.
It is worth noting that Sameer Africa is made up of an independent, non-executive, Directors and the Chairman who coordinate the daily operations of business. The board of directors at the company meets quarterly in which they carry out and audit of the company’s strategy as well as evaluating its financial performance. There are three main committees that are charged with monitoring the company’s operations and they include the audit committee, finance committee and the remuneration committee. On the other hand, managers have been able to make decisions as a result of effective accounting system at the group that is enhanced by external reporting, internal reporting and non routine internal reporting.
Sameer Africa Limited through its subsidiaries is involved in provision of diverse products. The Sameer Africa Limited portfolio of products is inclusive but not limited to tubeless tires, flaps, tube tires for trucks and buses, passenger-car tires light-truck and steel-belted radials, off-road and agriculture tires using its brand name Yana Tires. The main competitor of Sameer Africa is Kingsway which imports tires from other countries such France (Michelin), South Korea (Kumho), and India (Apollo). Sameer Africa has suffered immense losses from the political volatility in the Middle East and Northern Africa. Sameer Africa which is a leading tire manufacturing company operates a structured management accounting system as well as having a participative approach in budget preparation.
At Sameer Africa, subsidiaries are fully consolidated from the date when control is transferred to the group. As an illustration of its strength, Sameer Africa is among the first companies to engage in the business of tyre production within the east Africa region. The use of old technology at the company is still a major weakness being realized at Sameer Africa.

Chapter One
Introduction
Sameer Africa Limited, in conjunction with its subsidiaries, takes part in the manufacture, import, and sale of tires and tubes in Kenya, Uganda, and Tanzania. The company manufactures commuter car tires, light and medium commercial vehicle tires, truck and bus tires, agricultural tires, and off-the-road tires under the Yana Tyres registered trademark. Sameer Africa Limited also engages as a participant in leasing land and the buildings on it in an export handling zone. The company was in the past identified as Firestone East Africa 1969 Ltd and the name was later changed to Sameer Africa Limited in April 2005. Sameer Africa Limited was established in 1969 and the company is grounded in Nairobi, Kenya (LLC, 2010). Sameer Africa Limited is a brother company of Sameer Investments Limited (Sameer Africa, 2011)
Sameer Africa Limited is a Kenya-based producing industry that is primarily involved in the manufacture, buying and bringing in goods from a foreign country and retailing of tires and tubes. The Company’s range of products also consist of: passenger material and steel belted radials, light truck radials, agricultural and off-the-road tires with the brand name Yana, in addition to tube and tubeless tires, and flaps. Sameer Africa Limited carries out its operation within six subsidiaries: Sameer Africa Limited Uganda, Sameer Africa Limited Tanzania, Yana Tyre Centre Limited, Sameer Industrial Park Limited, Sameer Business Park and Export Processing Zone (Sameer Africa, 2011).
Sameer Africa Ltd. (SAL) is in a category of its own, in spite of that. This development goes after its most sent out internationally discerned certification under the ISO/TS 16949 quality system in region south of the Sahara Desert Africa. This is a global standard for Quality Management Systems (QMS) for the Automotive Industry and the Automotive Supply Chain; and which is among the major of the strictest and revered worldwide measures (LLC, 2010).

Figure (i) The Vision, Mission, Core values, Culture & Style at Sameer Africa.
(Sameer Africa, 2008)
The company name changed to Sameer Africa Limited in April 2005 after a booming discussion of the procedural and management agreement with Bridgestone Corporation Japan. This modification produced an autonomous tyre manufacturer based in Kenya and aspiring to satisfy and distribute its product to the East African and the COMESA markets. The anticipated interest nowadays is directed on growing the manufacture on export goods so as to head the province’s suitable import levies.
The manufacture competence has increased over the years to the present level of about 2,500 tyres per day, with a definite manufacture of more than 500,000 tyres per year without fail over the last number of years. This competence is by now being enlarged more to 4,000 tyres per day over the subsequently one year. This manufacture, which has been scientifically supported by Bridgestone & Firestone Corporation over the years, has motivated Kenyan local engineers get hold of position of greatest importance or advancement in broad tyre production skills and procedures of universal standing (Sameer Africa, 2011).
Sameer Africa has an advantage of its growing aptitude in technology and thus has the ability to produce diverse types of tyres relating to the African terrain and using its registered logo, Yana, has the capacity to produce tyres for domestic uses with assortments inclusive of passenger car tyres, agriculture tyres, tyres for articulated vehicles.
Corporate Governance
A player in the Nairobi Stock Exchange, Sameer Africa abides by the Corporate Governance regulations as required by the Capital Markets Authority (Sameer Africa, 2008). The organization’s development and prosperity, and the investors accountability- as reflected by the organization’s regulations-is vouched for by the Board of Directors.
The Board of Directors
The Board of Sameer Africa is made up of an independent, non-executive, Directors and the Chairman. The Directors of the company are usually given timely information so that they are able to maintain complete and effective control on all major decisions that affect the daily and future operations of the company (Sameer Africa, 2008). Despite the fact that the Managing Director directs the daily functions, it is the Board that is accountable for upholding and are delegated to the Managing Director, it is the Board that is accountable for maintaining and improving the organization’s interior management formation for the organization to maximize the progress and the productivity for the organization’s investors.
Board Meeting
The Board of Directors meets quarterly so as audit the Sameer’s strategy and review the financial performance of the company over the period. Other specific reviews that take place are the performance, operational and future prospects for the company.
Board Committees
They are three main committees which are main guide by the Sameer’s by-laws. These committees are essential in monitoring the company’s operations, systems and internal controls.
They are grouped as follows:
a) Audit Committee
The audit committee is made of autonomous Directors who bear not accountability for the company’s functions (Sameer Africa, 2008). The audit committee convene periodically with the attendances of the General Manager who officiating the Finance Department, the Auditors (both Internal and External). Majorly focused by the meetings is to reassess the organization’s yearly monetary reports so as to guarantee stringent adherence to the Accounting Regulations.
b) Finance Committee
The Financial Committee is composed of non executive Directors. It is mandatory for the Managing Director and Finance officer to attend the meets. The responsibility of the committee is to monitor and review performance, operational and review future prospects for the company.
c) Remuneration Committee
The committee is comprised two non Executive Directors and the Managing Director. The role of the committee is to deliberate on issues pertaining to remunerations employee development and motivation (Sameer Africa, 2008).
Corporate Governance at Sameer’s follows the structure of other companies and organizations in the country and the rest of the world. Therefore, nothing much sticks out in its Corporate Governance structure.
Accounting at Sameer Africa
Accounting has played a major role in helping managers in Sameer Africa, potential investors, investors, creditors, suppliers and other stakeholders to make decisions (Sameer Africa, 2008). The Accounting system has provided information for three major purposes
a) External Reporting
These reports are used investors, creditors and Kenya Revenue (KRA) authority and third parties to analyze Sameer Africa.
b) Internal Reporting
The reports generated are used regularly to help manager and various committees as stated earlier to assist in making Sameer’s Africa internal decision.
c) Non routine Internal Reporting
The reporting is very important as supportive documents for various projects that Sameer Africa wishes to undertake.
Figure (ii) Ten major Shareholders of Companies and Distribution of Shareholders
(Sameer Africa, 2008)
Financial Accounting vs. Management Accounting
To get an understanding how the following terms are applied in Sameer Africa, we must understand the definitions as they applied in accounting. Management accounting deals with accounting that helps managers in decision making (Sameer Africa, 2008). Whilst Financial accounting measures and records business activities therefore; is the source of financial statements (Brown, 2010). Given these two distinct definitions explains why Sameer Africa has separated this functions Management accounting in Sameer Africa deals with Internal Reporting and Non routine Internal Reporting. On the contrary, external reporting function falls on financial accounting function. Moreover, as discussed the Board committees also illustrate the difference. The Sameer Africa’s responsibility of administrating the accounting is on the monetary board while that of monetary administrating on the Auditing board.
Accounting Effectiveness
Sameer Africa has heavily invested in ensuring that the accounting management practices meet national and international standards. Financial statements are prepared in compliance with International Financial Reporting Standards (IFRS) (Financial Management Accounting Committee, 2002). Therefore, strictly compliance to ensure that the financial measurements are accurate and are not misleading. Sameer Africa has both internal and external auditors who meet quarterly and review the Financials statements (Sameer Africa, 2008). However; even though Sameer investment in developing an accounting structure it should invest in accounting technology that will ensure timely delivery and procession of accounting information. Moreover, monetary reports ought to be effortlessly got via the company’s page on the website, but it is not yet so.
Sameer Africa Accounting Software
Sameer Africa uses Sage accounting software. Even though it makes it easier for the business to meet it needs and be able to access critical information (Morris,2011). The software failure to adopt the Activity-Based Costing system and integrate the entire business functions, therefore embracing the entire organization is a major obstacle that Sameer must address. It is important for the company to invest in an Enterprise resource planning (ERP) system that will ideally manage the flow of information within the entire organization and be customised to have an Activity-Based Costing system (Morris,2011). Therefore; facilitating that all business function both inside and outside are managed effectively.

Chapter 2
A Financial Accounting Analysis of the Organization
Sameer Africa Limited is a healthy organization. It has many subsidiaries namely Yana Tire Centre Limited, Sameer Industrial Park Limited, Sameer Business Park, Export Processing Zone (EPZ), Sameer Africa Limited (Tanzania) and Sameer Africa Limited (Uganda). Sameer Africa Limited through its subsidiaries is involved in provision of diverse products. The Sameer Africa Limited portfolio of products is inclusive but not limited to tubeless tires, flaps, tube tires for trucks and buses, passenger-car tires light-truck and steel-belted radials, off-road and agriculture tires using its brand name Yana Tires (Sameer Africa Limited, 2010). Sameer Africa Limited does not only manufacture tires and tubes, but also exports the products.
Sameer Africa Limited is financed through the sale of its products both locally and internationally through exportation (Sameer Africa, 2011). The products of Sameer Africa Limited have received good reception in the COMESA region covering Kenya, Uganda, Congo, Sudan, Malawi, Zambia, Somalia, Rwanda, Burundi, Zambia and DRC. Sameer Africa Limited earns a significant income from this COMESA markets. It also gets income from letting out its Export Processing Zone (EPZ). There are other services from which Sameer Africa earns an extra income from such as wheel balancing, tire fitting, wheel alignment which are it runs under Garages and Service Centres. Sameer Africa is looking for more penetration into the regional markets and with such penetration so is its finance more geared (Sameer Africa Limited, 2010).
Sameer Africa limited has an efficient working capital management. Drawing examples from its net profit trend as of June 2008 for the half year had been KES 48 million with its operating profit being KES 104 million which had been a profit growth by approximately 73%. The 2008 financial results had shown a decline in profit by approximately 13% compared to 2007. However, since in 2008 the world was grappling with an economic meltdown, where many companies were affected worldwide, the working capital could be said to be efficiently managed (Sameer Africa, 2008).
Figure (iii) Consolidated profit and loss account
(Sameer Africa, 2008)
The profits were adversely affected by several factors. First, where Sameer Africa is headquartered, Nairobi, the profits were negatively affected by the disputed elections which led to a mayhem rocking the country (Sameer Africa, 2008) Moreover, oil prices skyrocketed. To cap it all, the world was trying to reel out of a global recession that had meted out a blow to every corner of the world. There were other factors such as loses in the foreign exchange. Profits decreased. However, with the world, recovering from recession, so were the profits of Sameer Africa.
Sameer Africa has a management system that is responsible for its operations. It has a board of directors made of a Chairman, a Managing Director and a Secretary. The individuals in the board of directors are independent and non-executive. The aim of the board of directors is given apt and up to date information for them to efficiently sustain the company’s strategies, compliances and operations (Sameer Africa Limited, 2010). All business is headed by the managing director. On the other side, the board of directors creates sustainable organization structure that ensures there is an improvement in the company’s profits. Sameer Africa has several types of committees; each of them assigned a specific task. The remuneration committee, which is made of two independent and non-executive directors, is responsible for the compensations of employees, building up employees and ensuring the morale in the employees. Other responsibilities of the remuneration committee include suggesting appointees to the board of directors and to the other types of committees. The audit committee is responsible for the assessment of the interim and the yearly financial statements and ensures that they are compatible with the standards of accounting. Other responsibilities including assessing the internal controls of the company, the structure of the company’s accounting, coordinating with the external auditors and also pointing out the tasks of the internal auditors. The finance committee bears the responsibility of overseeing and assessing the company’s businesses and the financial trend of the company. Other responsibilities include assessing the ventures of the company and ascertaining that financial power of the company is efficiently executed.
The company has foreseen a growth in the Gross Domestic Product (GDP) in the country, an increment in the number of motor vehicles, and with measures already put in place to cushion the margins and control the costs, and the future of Sameer Africa is headed for the brighter. Sameer Africa Limited is also lobbying with the regional governments so as to develop the business environments (Sameer Africa Limited, 2010).
The main competitor of Sameer Africa is Kingsway which imports tires from other countries such France (Michelin), South Korea (Kumho), and India (Apollo). Sameer Africa has suffered immense losses from the political volatility in the Middle East and Northern Africa. The political instability has meted out a mighty blow to the business of Sameer Africa Limited because a couple of the company’s raw materials are oil-based such as carbon black and the synthetic rubber. The Kenyan shilling against the dollar has weakened thus hurting the Kenyan based company (Sameer Africa 2008). Unfriendly rates of currency between the regional’s regions have adversely affected the margins and the proceeds in the regional market.
When Japan was hit by earthquake and the nuclear disaster, the supply chain of Sameer Africa Limited was adversely affected. Kingsway stepped in to fill the vacancy that was left by the Sameer Africa merely because its supply chain was not affected after all.
Kingsway has been investing heavily in Kenya by setting two retread factories in Kenya, thus sharing the profit margin of the customers in Africa (Sameer Africa Limited, 2010). With the statement of the Finance Ministry that there would be a reduction of the tax of Chinese tires, it implies that more partiers are entering into the regional markets. Dunlop has also strived hard to share the piece of pie in the COMESA market.
The main rival of Sameer Africa in the Comesa regional market, Kingsway, has been registering significant returns by taking advantage of the increased transit activity in the northern corridor: in both Uganda and Rwanda. With the plant initiated in Kenya by Kingsway, more drivers are opting to retreat their tires since it cheaper compared to an alternative.

Chapter 3
Management Accounting for the Organization
Brown (2010) defines management accounting as an accounting discipline that deals with confidential financial reports to be used within an organization. The reports prepared by the management accountants are used by the managers and top executives. The main reason for the preparation of the managerial accounts to help the managers and other organization leaders in making the right decisions.
Management accounts are used by organization leaders in the preparation of budgets and also are used to compare an organization’s current performance with the budgeted performance
Sameer Africa which is a leading tire manufacturing company operates a structured management accounting system. The manufacturing industry usually prepares its budgets regularly because this helps the company monitor its operations. This is in terms of monitoring what is coming in and what is going out.
At Sameer Africa, the budgeting system works by helping the managers and other organization leaders in evaluating the performance of the organization in terms of its revenue generation and also the expenses incurred by the company. Sameer Africa being a manufacturing company generates a number of budgets. The master budget gives a detailed financial plan for all departments of the company in relation to their financial goals. The operating budget which is prepared annually gives information relating to sales and income for the next financial year. It gives details on information related to sales forecasts, manufacturing costs, inventory and operating expenses. Sameer Africa also prepares a flexible budget which is used to measure production costs of goods produced. It is used to monitor cost variances in the production process.
Budget preparation at Sameer Africa is participative. During budget preparation all departments of the company are usually present so as to assist the budget committee in proper estimation of what is to be included in the budget.

Figure (iii) Consolidated and Company Balance Sheet
(Sameer Africa, 2008)

Balakrishnan et al, (2009) define variance as the variation between the master budget and the actual results. Sameer Africa identifies its budget variance by the use of the flexible budget. The company’s flexible budget is based on the actual output. In order to determine the variances in their budget, the flexible budget is compared with the company’s static budget. This helps the company determine the flexible budget variance which shows the effect of cost on the company operations. Sales volume variance is also generated to determine the effect that the company’s level of activities has had on the operations.
The budgeting system used by Sameer Africa is effective in the sense that the company has been able to control its level of spending in relation to the revenues generated.
Sameer Africa uses the traditional costing structure. The traditional costing structure involves the use of the fixed costs and the variable costs. The fixed cost versus the variable cost structure impacts highly on a firm’s profitability.
Sameer Africa has not been using the Activity-Based Costing (ABC) system. The ABC system involves accumulating overhead costs for each organizational activity and then assigning the costs of the activities to the products, services or customers causing the activity. According to Horngren, et al (1999), the ABC system is very useful to a manufacturing firm. Most manufacturing firms are adopting the ABC system for a number of reasons;
• The costs of developing the ABC system have decreased given the decrease in technology costs.
• ABC system helps firms to maintain accurate cost measurements thus they are not likely to lose bids which would have otherwise been as a result of incorrect cost measurements leading to over costing.
• Because of the rapid technological changes, the product life cycles have become shorter. This therefore leaves most companies with no time to make cost and price adjustments. Adoption of the ABC system has helps curb some of this problems in accompany.
Also the ABC system is very useful because it helps a firm to understand which products are most profitable and thus help in determining where to focus the sales effort. The company undertakes Break-even analysis. The company calculates it prices based on the period. Costs arising in each period are divided by the activity.
Management accounting information prepared is usually effectively disseminated to other departmental managers and organization leaders to ensure that resources are properly allocated among departments. The employees too are provided with the information necessary through their departmental managers.
Managerial accountants and the auditors at Sameer Africa use accounting and finance software in compiling their financial reports. The use of this software has played a big role to the company by ensuring that accurate records are kept and that correct financial information is given. Morris (2011) highlighted a number of accounting software packages that are used by most companies. The software systems have been developing over the years.
In the recent past, there has been a massive change in the management accounting systems. These changes have been reported in areas such as responsibility accounting, budgeting, incentives, performance reporting, and costing and performance measurement. These management changes have also been incorporated by Sameer Africa most especially in the areas of budgeting and incentives involving employee benefits.
The management accounting system at Sameer Africa is to a large extent successful. This is because the success of a company is determined from within. A company that has proper management of its resources is always successful. Sameer Africa which is the leading tire manufacturing industry has therefore through its being successful all over Africa has proved to have good and effective management accounting standards.
However, the company should not rest at that. The company should improve its management accounting systems. The company should adopt the Activity-Based Costing system. This will help the company in proper budgeting of its resources. The incorporation of this system in to the company’s management systems will also help the company in eliminating some expenses that would otherwise have occurred. The occurrence of such expenses may be as a result of technological advancements.
The company can also improve its management accounting systems by using the right kind of resources most especially the human resource. The company should employ well qualified accountants to help in the drafting of the company’s budgets and evaluation of performance. Looking ahead the company should also adopt an Enterprise resource planning (ERP) system that will ideally manage the flow of information within the entire organization. Therefore; facilitating that all business function both inside and outside are managed effectively in the organisation.
Chapter 4
The Financial Management Strategies Employed at the Sameer Africa Limited
Primarily, the Sameer Africa group of companies is a limited company thus it offers a limited liability to its shareholders in addition to placing some restriction on its owners finance wise.
Nonetheless, at the Sameer Africa, the responsibility for financial management and strategizing lies with the general manager finance who reports to the managing director. The job of the general manager finance entails financial reporting and controls, overseeing the optional utilization of the company’s financial resources and assets in line with the company business objectives (Sameer Africa, 2011).
Thus among other things the general manager finance has the duty to develop and implement the group’s financial strategy, planning and directing financial requirements, budgeting and procedures, determining and coordinating financial reporting as well as communicating requirements both internal and externally, monitoring and ensuring compliance with company policies on top of other statutory requirements, identifying, implementing benchmarking for best practices in financial management, keeping close relationship with banks, auditors, statutory and other financial parties.
This allows the Sameer group to keep tabs on its financial state of affairs as the company is able to maintain a centralized financial system which leads to a sound financial management strategy.
Recent Reviews of the Financial Strategy at the Sameer Group of Companies
There has been a recent review of the financial management strategies at the Sameer group aimed at adopting a financial strategy that is prudent and compliant to liquid risk management that involves maintenance of sufficient cash and the availability of funds from adequate agencies of committed credit focuses (FMAC, 2002). In addition, owing to their dynamic nature of the underlying business, the management had to adopt flexibility in financial management by keeping available under commuted credit lines as well as to monitor rolling focus of the group liquid reserve as per the expected cash flow. Budget
Undertaking Capital Budgeting at the Sameer Africa
Capital budgeting is the long-term commitment to projects whose returns is expected after a series of years. The key component of this decision is the future uncertainty such as the project irreversible nature as the project involves an initial capital that should be invested in the long term and cash flow can only be received after a number of years (Sameer Africa Limited, 2010).
At the Sameer Africa, such projects are classified in to five categories. An outright acquisition, which involves the purchase of new asset, replacement and modernization of old and te4chnologically outdated assets, expansion and diversification of the company product portfolio, to meet the needs of the market, undertaking mutually exclusive projects that substitute one another as well as compete for each other on top of contingent or dependent projects that are undertaken as a result of undertaking the main project.
Financing the Capital Projects at the Sameer Africa
Project financing is the limited or the non- recourse financing of a newly to be developed project through establishment of vehicle companies such as subsidiaries or entities where the group has power to govern the financial and operating policies that generally accompany a share stake of more than half the voting right. At the Sameer Africa, subsidiaries are fully consolidated from the date when control is transferred to the group. Alternatively, they can be de consolidated from the date the control ceases (Bromwich, 1998). For this operation the group use the purchase method of accounting to account for the acquisition of subsidies for acquisition of subsidiaries whereby the cost of any acquisition is measured by the value of the asset given, equity instruments issued at the date of exchange plus costs that are directly attributable to the acquisition, identifiable assets acquired and liable and contingent liability assumed in a business combination that are measured as per their relative values as of the acquisition date irrespective of any minority interest.
Consequently, the excess acquisition cost over the fair value of the group share of the identifiable net assets acquired is received as good will (Sameer Africa, 2011). However, if the cost of acquisition is less than the fair value of the asset, of the subsidiary acquired, the difference is recognized directly in the income statement.
Accounting for Capital Rationing at the Sameer Africa
The company takes precau6tion to eliminate inter- company transaction balancers and unrealized gains. Over the group company’s transaction, as well, unless there is evidence of an important of the transferred asset unrealized losses are also eliminated.
Thus subsidiary, accounting policies have been adopted to ensure that they are in harmony with the group’s key policies. In addition, to this, the financial statements of the group entities forms and item of group entity that are measured by use of currency of the primary economic environment operated by the fictional currency (Bromwich, 1998). Hence, the consolidated group financial statements are presented in Kenya shilling which is the company’s functional presentation currency.
Foreign exchange gains and losses tied to borrowing or cash equivalent are presented in the profit and loss account within finance income or cost. On the other hand, other foreign exchange gains and losses are presented in the profit and loss account within the profit and loss/ gain.
Consequently, transaction differences on non- monetary financial assets and liabilities including held at friar value though profits and loss are recognized part of fair value gain or loss (Bromwich, 1998). Transaction variation on non- financial assets such as equipments are classified as available for sale financial assets and recorded in the available for sale reserve in equity.
There is also segment reporting. This is a group of assets and operations engaged in providing projects and services that are subject to risk and different returns from those of other business segments. For instance, geographical segmentation offers products and services within a particular economic environment subject to risk and returns that are different from those of segments operating in other economic environments (Sameer Africa Limited, 2010).
In terms of income, sale receivables of goods such as tire and tubes are stated as net of value added tax (VAT), rebates and discounts and after eliminating sales within the group, sales of goods are recognized on the period in which the group delinks products to the customer. Other incomes such as rentals are recognized over the period during which they were earned while interest income is recognized on a tune production basis by use of effective interest method. Dividends are recognized as income in the period in which the right to revenue income payment is established.

Chapter 5
SWOT Analysis and Conclusion
Despite being ranked among the leading producers of tires within the East African especially for automobiles such as passenger cars, trucks and agricultural equipment’s to mention but a few. Like other business ventures the company has had its fair share of ups and downs that have influenced its operations in various ways (Mindtools, 2011).
Strengths
Rich Historical Background
Sameer Africa is among the first companies to engage in the business of tyre production within the East Africa region. Formally the company was known as Firestone Company before changing its name to Sameer Africa. Since its products were among the first to be used within the region, the company developed an elaborate network that’s used in distribution of its products across the region.
The historic presence of the company has enabled it to develop close relationship with numerous local companies and industries such as in the transport sector where most of its products are consumed.
Quality Product
In addition to rich history within the region, the company offers products that meet the requirements of the consumers. Most roads in Kenya and its neighbouring countries .i.e. market for Sameer products have rough and rugged terrains. Previously most customers were not satisfied with the quality of tires that were in the markets since they were easily wearing out hence translating to the consumers incurring losses. After this realization, the company undertook a research work to produce products that are tailored for the east African market some of which include tyres best suited for rough terrains most of which are used by tourist firms and four wheeled vehicles.
The quality of its products and the ability to meet the demand of the markets has enabled the company to hold on to its former client whereas attracting new one.
Sound Management
The company has a well-organized company structure with the directors being the highest authorities within the company. The company’s organizational structure has enabled it to lay down an organized distribution strategy that has ensured the company products are well distributed within the east African region. Currently the company’s board of directors is made of seven with Engineer Erastus Mongera as its Chairman. The management of the company has kept it afloat despite the economic challenges that were experienced in the year 2010 that translated to most companies going under.
Weaknesses
Technology advancement
Although the company boasts of its leading position in production within the East Africa region, it still employs use of old technology. As a result of this, the company is no match for other producers of similar products when compared with its counterparts in countries such as Egypt and South Africa.
It’s necessary for the company to put up measures that would enable it become competitive in both local, regional and on international fronts. One of the core measures that can be used in improving such is incorporation of modern technology in the production processes. This will further improve the company’s image and productivity.
Low Number of Employees
Despite having a relatively large market, the company has only employed few individuals. Currently the company has an estimate of around 600 hundred employees. As a result of this, the employees are subjected to a lot of pressure in their lines of responsibilities hence compromising their output (O’Reilly, 1989).
Human resource is a core component in the production process. It’s important for the company to ensure each and every department is adequately staffed and equipped. This will not only impact positively on the production processes but will also translate to specialization.
Opportunities
Untapped Markets
Sameer Africa is strategically located in a region that has a lot of business potential. Kenya is surrounded by neighboring countries most of which are emerging from political unrests (Sameer Africa, 2011). Countries such as Southern Sudan are a ready market that the company can tap into. The COMESA trading block of which Kenya is a member. This is another avenue that the company can exploit to ensure it enjoys a wider market for its products.
Government Policy
The numerous changes of investment policies that a have been put into place as a result of enactment of the new constitution is an avenue the company can use to further expand its operations. The government has put in place measures to ensure products from local industries are not subject to unhealthy competition. For example the government restricts the amount of imports from COMESA member states for a stated period of time. It’s necessary for the company to ensure it come up with distribution points in all major towns in the country. This will ensure the company maintains its position as a leader in the tire business even if the government allows imports from COMESA.
Sports
The numerous automobile exhibition events such as the concour d’elegance held at the Ngong racecourse is an avenue the company can capitalize on to inform potential buyers of its products. The annual Kenya Safari Rally event co-sponsored by KCB is another avenue the company can exploit to demonstrate the quality of its product through offering tyre sponsorship to some drivers.
Threats
The company operates in a oligopoly market as a result of this the company faces threats in the following fronts;
Competition
Some countries such as China have a ‘high appetite’ for most raw materials. Rubber being the major products used in manufacture of tyres is on high demand in global markets. This has translated to stiff competition for the products especially from the developed nations. This has consequently translated to increased prices for the raw product.
Cheap imports from Asia countries are posing a major challenge to the product in the local markets. This has translated to a reduction in the total sales of the company’s product within the region.
Shipment Insecurity
Since the major means of transport for the raw product is through water transport, the increasing insecurity in the Indian Ocean as a result of pirate activities has translated to high costs being incurred in transportation of raw products from the country of origin to the port of Mombasa.
Political Instability
After the post-election violence that was experienced in Kenya in year 2007, the country’s economy has not yet fully recovered from the effects. Like most businesses, the company products in its depots were vandalized translating to huge losses. In addition to the mentioned, the political instability in the neighbouring country of Somalia has affected the tourism sector which is a major consumer of Sameer products (tires for tour vans).
Weakening of the Shilling
The Kenyan currency (Shilling) has recently being experiencing a dive as compared to other currencies. As a result of this, Sameer has to incur more costs in its operations such as importing raw products hence distorting the company’s initial budget and spending strategies. The high costs further trickles down to the consumer hence reducing the competitiveness of the product due to consumer’s inability to buy as they resort to low quality products and retreaded tires.
Conclusion
The success of any organization is anchored on how sound it’s financial and human resources are managed. The sound management at Sameer Africa has enabled the company to grow and emerge among the leading producers of tires within the east African region.
Despite encountering some challenges in its operations, the company has held on to its position as a major producer of tires within the region. The expansion of East Africa Community to include other countries such as Rwanda, Burundi and soon Southern Sudan offer more opportunities for the company’s products.

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Appendix

Figure (i) The Vision, Mission, Core values, Culture & Style at Sameer Africa.
Figure (ii) Ten major Shareholders of Companies and Distribution of Shareholders

Figure (iii) Consolidated profit and loss account.
Figure (iii) Consolidated and Company Balance Sheets