Govt buys 26pc shares to retake General Tyre
General Tyre (Continental AG) Representative, Michael Strain (Left) and Treasury Registrar, Lawrence Mafuru exchange documents in Dar es Salaam yesterday after the government purchasing 26 shares owned by the U.S based company. Center is Chief Secretary, Ambassador Ombeni Sefue. PHOTO|VENANCE NESTORY
What you need to know:
After purchasing the shares, the government now owns the firm by 100 per cent, paving the way for resumption of tyre production in full capacity
Dar es Salaam. The government has taken back General Tyre East Africa Limited (GTEA) after purchasing 26 shares owned by US-based company, Continental AG, at a price of one million US Dollars (Sh2.1 billion).
Speaking at a signing ceremony for transferring the shares from Continental AG yesterday, Chief Secretary Ombeni Sefue said that after purchasing the shares, the government now owns the firm by 100 per cent, paving the way for the resumption of tyre production in full capacity.
Mr Sefue signed the document on behalf of the government, while Mr Chapple Thomas, legal adviser of Continental AG, signed on behalf of Continental AG.
The GTEA which stopped production in 2007 remained closed for several years, whereby in 2012 the government assigned the National Development Corporation (NDC) to assess assets of the company and prepare a business plan for revitalising it since it was the only trye making factory in East Africa. “NDC is continuing with the task of reactivating GTEA, including attracting competent investors to enable the factory to produce tyres on a large scale which would meet local and export demand. NDC has already conducted a market survey within East Africa and found that there is a lucrative market though there is a massive importation of tyres from Far East countries.
He said between 1969 and 2007 the government owned 74 per cent shares, while the US-based General Tyre International company (GTIC) had 24 per cent shares.
“Production started in 1971 with a target of producing 320,000 tyres annually. Since that period it has been using a General Tyre Brand. In 1987, all shares which were owned by GTIC were bought by Continental AG,” he said.
