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Mara Phones struggled against less-expensive Asian brands

The Mara Phone Manufacturing Plant during the launch in Durban in 2019 | GCIS

The Mara Phone Manufacturing Plant during the launch in Durban in 2019 | GCIS

Published Feb 11, 2022

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The Industrial Development Corporation (IDC) said yesterday that it had approved R238 million in loan facilities to Dubai-based Mara Corporation to establish a smartphone factory in Durban in 2019, which this week was being auctioned off because of financial difficulties.

IDC spokesperson Tshepo Ramodibe said in a statement yesterday, the aim of the plant in the Dube TradePort, Kwa-Zulu Natal, was to make low-cost, high-quality smartphones but operations ceased last July as the company had struggled to penetrate the local market, where other global brands and lower-cost competitors were firmly entrenched, and because the business was hit with disruptions during the Covid-19 pandemic

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“The total funding for this project which was intended to create 450 jobs over five years, stood at R492m. As a senior lender, the IDC approved facilities of R238m. Mara Phones shareholders were not able to raise their full contribution. As such, the shortfall was provided by another local financial lender,” said Ramodibe.

“The IDC is exploring other options, given its developmental mandate and options that interested parties may offer,” he said.

The auction attracted significant interest on social media, with for instance @VusiThembekwayo commenting on Twitter that: “The recent closure of the Mara Phones factory in South Africa opens up a wound that is hard for most entrepreneurs to deal with: ‘You are told to take the risk, risk your money and your career to start a business. You are laughed at if things don’t work out’.”

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@AZinhleputin said: “I am one of the employees of Mara Phones based in the Dube TradePort in Durban. We haven’t received our salaries since May, 2021. We have a story to tell, but no one listens.”

@WoganMay said: “This Mara Phones story is incredible for a number of reasons, but mine is: It’s a solid, tangible data point in favour of the argument that you can’t just magic an economy into existence with subsidies, grants and capital. Customers actually need to buy the stuff you make.”

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