R1-billion South African electronics factory closing down - Here's what happened

Ice2Cool

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There was never any business case for this factory and it made absolutely no sense. It was previously Vektronix which had 2 production lines. It was then taken over and became Yekani where they built this Goliath factory with IDC money and 10 production lines with the same 2 customers. Just to put this into context, there was more capacity in this factory then the rest of the country combined (by a long shot). The fact that it went under almost a year after opening is NO surprise to anyone who comes from the industry.

Oh and btw, they never produced a cellphone, tablets or laptops (although they wanted to). Mainly just electric metering and set top boxes / decoders.

It was most certainly a state of the art factory and was world class but had zero business case to support its existence - especially in EL.
 

WaxLyrical

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Are you saying It's like tenders, but for connected people..?
Possibly.
Smells like something where huge amounts of money was pumped in just to line pockets.
State of the art facility and practically zero marketing and production - something fishy happened here.
 

Daruk

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Sounds like it was an elaborate scam.
That's the first thing that comes to mind. I'd like to know what percentage of capital was provided by the Yekani, what percentage was provided by private shareholders and what percentage DTI put in. And that money from Yekani, i assume that came from mostly DSTV decoder building proceeds.... now where has the money gone since then.
 

Ice2Cool

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That's the first thing that comes to mind. I'd like to know what percentage of capital was provided by the Yekani, what percentage was provided by private shareholders and what percentage DTI put in. And that money from Yekani, i assume that came from mostly DSTV decoder building proceeds.... now where has the money gone since then.
From what I understand, there was no capital provided by Yekani. Which sounds ridiculous to me. The building was rented from someone else. And from my homework the capital cost of the equipment is less than R500m. So definitely someones pockets were lined quite nicely.
 

aleksandar

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"According to Davies, the dti provided R350 million for the construction of the company’s infrastructure through the Special Economic Zones Fund at the ELIDZ and a R50 million grant under the Black Industrialists Programme for the machinery. "
link

Apparently now CEO is blaming government for not providing enough support?! WTF
 

jambai

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Can almost guess that this is something under the black industrialist program. You can’t just throw money and then you create the next johann Rupert . You need the right products at right time with skill
 

Daruk

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From what I understand, there was no capital provided by Yekani. Which sounds ridiculous to me. The building was rented from someone else. And from my homework the capital cost of the equipment is less than R500m. So definitely someones pockets were lined quite nicely.
"The funding for this project was a concerted effort from various stakeholders, which included the Department of Trade and Industry and private financial institutions, with a significant portion coming from Yekani’s coffers. "
 

Geoff.D

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That's the first thing that comes to mind. I'd like to know what percentage of capital was provided by the Yekani, what percentage was provided by private shareholders and what percentage DTI put in. And that money from Yekani, i assume that came from mostly DSTV decoder building proceeds.... now where has the money gone since then.
Some of it to BMW.
 

Arthur

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There in the first sentence is the error: factories don't compete. People do. No matter how shiny your factory, you need smart capable and entrepreneurial people to drive the business. I suspect that's where this operation suffered a major deficit. It also seems as if they traded on skin colour, which isn't a good indicator of ability.
 

braailekker11

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Nov 28, 2019
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There in the first sentence is the error: factories don't compete. People do. No matter how shiny your factory, you need smart capable and entrepreneurial people to drive the business. I suspect that's where this operation suffered a major deficit.
The 30% pass mark.
 

ISP cash cow

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There was never any business case for this factory and it made absolutely no sense. It was previously Vektronix which had 2 production lines. It was then taken over and became Yekani where they built this Goliath factory with IDC money and 10 production lines with the same 2 customers. Just to put this into context, there was more capacity in this factory then the rest of the country combined (by a long shot). The fact that it went under almost a year after opening is NO surprise to anyone who comes from the industry.

Oh and btw, they never produced a cellphone, tablets or laptops (although they wanted to). Mainly just electric metering and set top boxes / decoders.

It was most certainly a state of the art factory and was world class but had zero business case to support its existence - especially in EL.
Sounds to me like someone was using this to siphon money from the government and private initiatives
 
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