Namec forges deal with Chinese group

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Independent Newspapers

Namec has secured R60 million in loans and grants from development agencies to build the set-top box factory. Photo: Simphiwe Mbokazi

Johannesburg - The National Association of Manufacturers in Electronic Components (Namec) and a Chinese firm are building a multimillion-rand set-top box assembly plant at the Dube TradePort in Durban.

Namec has secured R60 million in loans and grants from government development agencies to build the factory that is expected to create at least 250 jobs initially and expand the employment opportunity to 3 000 positions over time and export the boxes into the rest of Africa.

Yesterday Vijay Pandey, the chief executive of Namec Technologies, which is the joint venture that will oversee the administration of the manufacturing, identified the Chinese partner as Skyworth Digital, a subsidiary of the Skyworth Group, which is a global set-top box manufacturer.

The Chinese do not own equity in the manufacturing plant. They will only commit skills and other administrative expertise over a 24-month period to the joint venture in exchange for the sales they stand to gain once Namec’s factory is operational.

“White [owned] companies were not prepared to give us a share of their company. I won’t name names. That’s why I went this route,” Pandey said.

“I’m going to be purchasing components from them. They are chasing me to become my suppliers of components.”

Last week, Namec distributed 16 share certificates to social interest groups, which include the Disabled People of SA, the Progressive Women’s Movement of SA and Pamodzi Investments.

The company has also partnered with the Durban University of Technology, which will send engineering students to China and create a hi-tech laboratory to provide training locally.

The factory will be a 8 000m2 facility and will manufacture about 3 million set-top boxes annually.

But it already has formidable competition in Altron-owned Altech UEC, which poured R50m into an upgrade of its plant in Mount Edgecombe, Durban, in 2011. The 13 500m2 factory has the capacity to produce 3 million set-top boxes annually.

Namec intends to bid for a contract to supply set-top boxes for the national migration project from analogue to digital television broadcasting.

The switchover by June 2015 is a global requirement by the International Telecommunications Union. The migration will provide more television channels and free spectrum for other uses, among other things.

The set-top boxes convert the digital signal into pictures that can be viewed on older analogue television sets.

Pandey said Namec was not dependent on the government contract for its factory to succeed.

“There are 120 million set-top boxes required out there. South Africa’s [subsidised] 5 million we are dying over is a drop in the ocean. We will really appreciate the [government’s] support but we’ve moved our focus into Africa. The Southern African Development Community and AU support us,” Pandey said.

The Department of Economic Development did not respond to an enquiry about its involvement by the time of going to press. - Business Report


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