TREDCOR (trading as Trentyre) which is the exclusive distributor for Goodyear brand of tyres in Zimbabwe has attributed its low sales to the flooding of cheap Chinese tyre brands.
In a circular to shareholders , Unifreight Africa Limited, which Tredcor is a subsidiary said owing to high inflation consumers are opting to buy cheap Chinese tyres instead of its durable tyre brand.
“Tredcor is being affected by competition from suppliers of cheaper Chinese vehicle tyre brands that are flooding the market at a time that its flagship brand, Goodyear tyres are becoming pricy due to high inflation, rapid depreciation of the local currency and scarcity of foreign currency.
“Declining disposable incomes have adversely impacted demand for Tredcor’s high premium, reliable and durable tyres as consumers are downgrading to cheaper alternatives,” states the company.
It is in this regard that the company is planning to sell shares to Zimplow,an infrastructure and agricultural equipment manufacturer and distributor.
“Zimplow tabled an offer to Unifreight to acquire Clan Services’ 51% shareholding in Tredcor and Unifreight’s 100% shareholding in Birmingham Investments in exchange for newly issued ordinary shares in Zimplow.
“Unifreight will receive 15,774,446 newly issued ordinary shares in Zimplow in exchange for its shareholding in Birmingham Investments and Clan Services will receive 18,399,564 newly issued ordinary share capital in Zimplow in exchange for its 51% shareholding in Tredcor,”it added.
The country’s largest shipping, transport and logistics operator is confident that the proposed transaction will change its fortune.
“Historically, Tredcor has dragged Unifreight’s performance. The Zimplow offer presents an opportunity to turn around its fortunes through culture transformation, improved logistics and access to new markets.
“It also presents an opportunity to acquire shares in a more profitable business by letting go of a moderately performing business which is set for subsequent transformation through this reorganisation,”.
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