The first locally produced gaming machine will come off the assembly line within six months.
Grand Parade Investments (GPI) has signed a joint venture agreement with German gaming manufacturer and operator Merkur Gaming to manufacture and assemble gaming machines locally for the first time.
“Until now all gaming machines have been imported,” GPI chairman Hassen Adams said prior to the announcement, noting that there were some 22 500 gaming machines and 7 500 slot machines in the country, all fully imported from countries such as Germany and the US.
In terms of the agreement a new joint venture company, called Grand Merkur, will be registered in South Africa to make slot machines, sports betting terminals and lottery terminals.
“The new company will also investigate opportunities for the possible operation of gaming facilities, and look to develop a training centre and a research and development centre… where locally designed software games and hardware will be developed,” Adams said.
Merkur Gaming is a wholly owned subsidiary of the family-owned Gauselmann Group, a specialist gaming enterprise focusing on the development and sales of limited payout machines, casino slot machines and video lottery terminals.
Merkur’s core role within the Gauselmann Group is to serve and service international markets.
Gauselmann’s factory in Lubbecke in Germany produces about 85 000 gaming machines and cash management systems a year.
Gauselmann chief operating officer Thomas Niehenke said both Merkur and GPI saw significant growth prospects in South Africa “and throughout the continent”.
Asked if there would be significant foreign direct investment flowing in as a consequence of the formation of the new firm, he said the emphasis fell on building skills in both countries and leveraging existing capacity in South Africa. No financial details were given.
“South Africa has no local slot or gaming machine manufacturing plant, which we believe presents us with an ideal gap in the market. GPI’s gaming experience and established industry relationships make it an ideal partner in Africa,” Niehenke said.
The new firm would contract South African electronics manufacturer Tellumat, formerly Plessey, to assist with the manufacture of the gaming machines.
Tellumat supplies jet and helicopter instrumentation circuitry as well as satellite equipment for airports from its factory in Cape Town.
This additional business will support the jobs of the existing 1 000 workers at the Tellumat facility.
Department of Trade and Industry chief director Yunus Hoosen described the venture as “a grand marriage”, which would underpin existing jobs.
Adams said he had been encouraged to forge the joint venture deal with the German company by both President Jacob Zuma and Trade and Industry Minister Rob Davies.
Earlier this month, GPI announced a partnership with US-based Burger King to roll out hundreds of “healthy” and “braaied” burger outlets in South Africa, starting in Cape Town early next year.
Adams said GPI had 1 800 limited payout slot machine operations with which the burger outlets would have a synergy.
Shares in GPI slid 1.08 percent to close at R3.66 on the JSE yesterday.