The battle for a piece of Kenya’s battery market is set to intensify with the entry of a new manufacturer to be based in Kisii town. The new entrant is spoiling for war as it takes competition for battery clientele to Kenya’s sole battery manufacturer, Eveready East Africa, which has struggled to maintain its stranglehold on the region’s battery market in the face of cheap imports from China and India.

Eveready’s profitability has nose-dived in the recent past.Its profits dropped to Sh3.7 million in the period to March 2009 compared to Sh11 million over the same period the previous year.Turnover also slid from Sh956 million in 2008 to Sh82 million in 2009.

Eveready attributes its decline to the entry into the country of zero-rated and counterfeit dry cells. The firm slashed its payroll early in the year by 40 employees due to escalating production costs. At the Nairobi Stock Exchange, the company’s shares traded at between Sh2.50 and Sh2.60 last week — the lowest price by any quoted firm.The firm has installed a new Sh24 million plant it hopes will improve its profitability by enhancing the manufacturing process to enable it compete with dry cell imports.

The new entrant, Ourupower Limited, has been importing batteries from Asia. However, the firm could run into problems with the Kenya Bureau of Standards (Kebs) who have previously raised quality concerns over some of Ourupower’s imported brands even though the firm holds a certificate of conformity that indicates adherence to product standards.  Early this year, Kebs banned 38 brands of batteries imported by various companies because of non adherence to standards.

Attempts to interview Ourupower officials over quality concerns raised by Kebs failed as they refused to divulge information over the phone. Mr Peter Ithagu, a consultant who prepared an environmental impact assessment report for the establishment of the new plant, said batteries imported by Ourupower meet local standards.

“The company has been importing dry cells from Asia for sale in the local market. The said dry cells have Kebs standardisation marks and are thus compliant with Kenya standards,” said Mr Ithagu in a report submitted to Nema.

The report has been published in the Kenya Gazette awaiting comments from the public.The move to build a new battery factory comes at a time when consumers are looking for alternative power sources as electricity becomes more expensive.

Power shortage

Power distributor Kenya Power and Lighting Company said consumers will pay Sh7.90 for a unit of power up from Sh7.75 in the current power bills to help finance the cost of running diesel generators.

KPLC is buying additional power from thermal generators to sustain daily requirements following a power shortage since August. Ourupower could increase consumers’ choices of power to run small electronic equipment such as transistor radios and toys, but the firm will also create more pressure for Eveready.

The firm is taking advantage of Treasury’s investment allowance for companies that set up production plants in satellite towns.