Silicon city! R1,5-bn Durban smartphone factory opens
25 October 2019 | Web Article Number: ME201916893
DURBAN is cementing its reputation as a high-tech manufacturing hub with the recent opening Pan-African conglomerate, Mara Group’s R1,5-billion smartphone factory at the Dube TradePort Dube TradePort Special Economic Zone (SEZ).
The launch event was attended by President Cyril Ramaphosa, Premier Sihle Zikalala and other political and business leaders.
It marked the Mara Group's follow-through on an investment undertaking made during the South Africa Investment Conference held in October 2018 and led by Ramaphosa. The conference, which formed part of a five-year investment drive to raise US$100 billion, showcased the country's compelling investment opportunities.
The Mara Phone investment brings on-stream South Africa's first fully-fledged smartphone manufacturing factory. Mara was established in 1996. Active in the manufacturing, financial, agricultural, real estate and technology sectors, the group has a presence in 26 African countries, employing some 14 000 people.
Mara Phones South Africa (Pty) Ltd, within the Dube TradePort SEZ is set to employ almost 1 500 people upon expansion. It currently employs 200 people, 90% of whom were unemployed graduates, with 60% of those women. It has the manufacturing capacity to produce 1,2 million units annually.
The plant will make two new devices, which will be made available through a number of distribution channels targeting primarily first-time African smart phone users. Mara Phones South Africa plans to export its devices to Angola, Botswana, the Democratic Republic of Congo, Lesotho, Mozambique, Namibia, Swaziland and Zambia.
Dube TradePort is considered to be one of South Africa's top 10 investment opportunities. The SEZ had already attracted R3,2 billion in private sector investment, the majority of which was dedicated to the manufacturing focused Dube TradeZone 1. The new facility forms part of a growing electronics cluster there.
Other major investors include South Korea's Samsung, Chinese fibre-optic cable manufacturer, yangtze Optics Africa Cables, the Indian-owned Mahindra semi-knockdown assembly plant, HBM-SA Health, gearbox manufacturer, Rossi SA, bearing manufacturer, Amsted Reelin, polypropylene bag manufacturer, Tufbag SA and laundry products manufacturer, Retractaline.
According to GFK Consulting, Ovum, GSMA and other sources, South Africa imported four million smart phones, collectively valued at R9,2 billion, in 2017. Some 3,4 million smart phones were shipped to the country in the second quarter of last year alone, up 17,4% year-on-year. In addition, 100 million mobile phone connections were made here during 2018, 85% of which were pre-paid, and it was forecast that the total number of handset sales in South Africa would top 29 million last years, with 50 million smart phones in use.
Accordingly, the manufacture of smart phones within the country is likely to make a sizeable contribution towards ongoing import substitution efforts.
Work on Dube TradePort Special Economic Zone phase 2 is well underway, with 45 hectares now open for applications from investors. The second phase of the Dube TradeZone development is targeting R18 billion of investment over the next five years.
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