Mustek explores partnerships with Huawei in Africa

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Johannesburg - Mustek, which announced on Friday that it would supply and deliver R128 million worth of Huawei’s signalling and telecommunications equipment to Zambia, could explore other opportunities in the African market with its Chinese partner.

The company, which is represented in Kenya, Zimbabwe and Nigeria outside its home base of South Africa, continued to investigate opportunities on the continent with Huawei Enterprise as well as independently, David Kan, Mustek’s chief executive, said. He did not elaborate on the opportunities that were available.

Mustek is the largest JSE-listed assembler and distributor of personal computers and other information and communication technology products for international brands.

The deal in Zambia involves Mustek’s logistics expertise to move the equipment, which will be imported from Huawei International in Hong Kong to Huawei Enterprise in Zambia.

Huawei Enterprise is responsible for installation and warranty of the equipment on behalf of a consortium of Huawei International, GMC Technologies and Bombardier Transportation, the Canadian firm involved in the execution of South Africa’s Gautrain rapid rail project.

The consortium will provide technology upgrades to Zambia Railway worth R550m.

Mustek has been handling all distribution requirements on behalf of Huawei as an authorised distribution partner in southern Africa since 2011.

Kan said: “Mustek is a specialist in logistics and distribution and Huawei Enterprise has chosen us as its partner for this reason.”

Dirk Noeth, an analyst at Avior Research, said smaller services companies did not necessarily have the cash to fund working capital and the scale to obtain better prices and support for logistics for such projects, unlike companies like Mustek and its JSE-listed competitor Pinnacle Technology, which were familiar with distribution in Africa.

Noeth said Mustek would obtain “low margins” from the project but it was an expansion of a relationship with Huawei that could lead to other deals.

Huawei and Allied Electronics were awarded a R1.2 billion contract for a Gauteng broadband network last month. Noeth said this would require computer hardware, which Mustek could be in a position to supply.

Mustek shares traded down 1c to close at R5.99 on Friday.

Meanwhile, last month Railways Africa, a Zambian publication, reported that the $51m (R547m) Zambia Railways project would create about 3 200 jobs in the country.

Zambia Railways chief executive Muyenga Atanga said at the time that the contract would result in a “first in Africa” signalling system. The signalling communications technology used was advanced to the extent that the train could brake on its own if the driver did not stop.


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