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

Daruk

Honorary Master
Joined
Jul 18, 2008
Messages
46,193
I believe the place is more advanced than much of MBSA. All for squat. The money had gone SOMEWHERE. No doubt in the hands of one or two people.
 

RedViking

Nord of the South
Joined
Feb 23, 2012
Messages
28,703
I remember the article on this when it opened.

Should have grown the business over a period of time before dumping a massive amount of money on it and think it will just work.

Anyways.... Someone made a lot of money and disappeared probably.
 

Supervan II

Expert Member
Joined
May 8, 2011
Messages
1,158
"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
Hmmm, similar to the Coega IDZ then. Plenty of new buildings going up and remaining unoccupied. The huge DCD Wind Towers site still lying dormant for more than three years already - replete with dedicated machinery standing outside to eventually Rust In Pieces.

Interesting story:
There is a facility called Eastern Cape Biomass Fuel Pellets which opened its doors around 2009. Not even 18 months later it closed down, despite all the "innovative ideas" and "solid, long-term contracts" - R70m down the drain. It's still registered though: to an obscure address (looks like an RDP-house) in Motherwell.

So it would not surprise me in the least that this is what is meant by BBEEE.
 

roadcat

Expert Member
Joined
Mar 23, 2006
Messages
2,264
Hmmm, similar to the Coega IDZ then. Plenty of new buildings going up and remaining unoccupied. The huge DCD Wind Towers site still lying dormant for more than three years already - replete with dedicated machinery standing outside to eventually Rust In Pieces.

Interesting story:
There is a facility called Eastern Cape Biomass Fuel Pellets which opened its doors around 2009. Not even 18 months later it closed down, despite all the "innovative ideas" and "solid, long-term contracts" - R70m down the drain. It's still registered though: to an obscure address (looks like an RDP-house) in Motherwell.

So it would not surprise me in the least that this is what is meant by BBEEE.
Rust in Peace
 

Swa

Honorary Master
Joined
May 4, 2012
Messages
24,822
Hmmm, similar to the Coega IDZ then. Plenty of new buildings going up and remaining unoccupied. The huge DCD Wind Towers site still lying dormant for more than three years already - replete with dedicated machinery standing outside to eventually Rust In Pieces.

Interesting story:
There is a facility called Eastern Cape Biomass Fuel Pellets which opened its doors around 2009. Not even 18 months later it closed down, despite all the "innovative ideas" and "solid, long-term contracts" - R70m down the drain. It's still registered though: to an obscure address (looks like an RDP-house) in Motherwell.

So it would not surprise me in the least that this is what is meant by BBEEE.
Ha, when I said a year or so ago that these are all ghost buildings with no real occupants I was told by some on here this isn't the case and businesses are lining up to invest. Seems I called it.
 

Geoff.D

Honorary Master
Joined
Aug 4, 2005
Messages
15,271
That factory was supposed to make millions of STBs for the DTT migration, none of which were ever required.
Then the plan was that the black business owners would sit back and wait for other govt electronic contracts to be awarded. With these sort of guarantees, why would anyone actually do any work to look for business??
I mean all the capacity was already booked?
Besides the fact that much of what was manufactured was of such poor quality despite the state of the art facilities.
A terrible terrible waste. It led also to the closing down of other factories in other parts of the country.
 

Gary Waterworth

Expert Member
Joined
Jan 31, 2005
Messages
1,028
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.

Sounds to me like you have some info

What goes on in the back of my mind is the following.
This was in East London. Not exactly the hub of activity. How many Qualified (Light Current Electronics type) people did they actually have ?
Being BEE I would'nt be surprised if most of them had no knowledge, qualifications and experience in that field.
Also probably overpaid for what they did have.
 

Ice2Cool

Expert Member
Joined
Feb 22, 2009
Messages
1,508
Sounds to me like you have some info

What goes on in the back of my mind is the following.
This was in East London. Not exactly the hub of activity. How many Qualified (Light Current Electronics type) people did they actually have ?
Being BEE I would'nt be surprised if most of them had no knowledge, qualifications and experience in that field.
Also probably overpaid for what they did have.
To be honest the bulk of the factory workers would be relatively unskilled. They'll be doing things like inserting components and a small amount of hand soldering and mechanical assembly (inserting a pcb into the housing etc). The skilled operators would be the machine operators - but since they're running the same product day in and day out they would be relatively "unskilled"because all they would be doing is loading components onto the machines. Yekani chose one supplier to supply all equipment in their factory (Panasonic) even though a lot of the equipment was not Panasonic. The nominated supplier then purchased equipment from other suppliers to complete the factories requirements. This same supplier spent a year and a half in these premises essentially training and running the equipment. From what I understand Yekani never really became self sufficient. They also hired top staff from Altech UEC to manage the operations of the business. Even the testing and programming of the units is relatively automated. Plug in, press button, wait and see result. If fail, hand over to a technician. If pass, next and carry on.

Also remember, Yekani was previously Vektronix, a well established business - so they already had trained staff available. I don't really believe much employment was created thereafter.

I think what's more upsetting is that the government invested so much without understanding the ramifications to the rest of the industry. Given how much capacity Yekani had, technically they could have taken on almost all of the countries work at huge detriment to the existing businesses. So its another example of the government not doing its job - and its a reminder of the Samsung factory in Dube. Existing manufacturers were producing the Samsung tv's prior to Samsung deciding to open up shop in Dube. Many businesses closed down and a lot of people lost their jobs all so a foreign company can set up shop, use the same unskilled labour but bring in their own highly paid managers and supervisors and overall the government would give tax relief to this company by being in an IDZ and receive less tax revenue as a result. Just sounds idiotic to me.
 

Wasabee!

Executive Member
Joined
Apr 5, 2012
Messages
5,187
It used to. DSTV moves production to a factory on the East Rand.
Assembly, not production. They just assemble here to minimise import taxes + get some BEE points. We can't do anything cheaper than China ito production.
 

Ice2Cool

Expert Member
Joined
Feb 22, 2009
Messages
1,508
Assembly, not production. They just assemble here to minimise import taxes + get some BEE points. We can't do anything cheaper than China ito production.
Thats incorrect. All production is done in SA from PCB population to final assembly. China being cheaper is a misnomer. The machines are the same. The wage rates are the same (infact SA is lower). The only possible difference would be productivity. Also DSTV does not award the contract. An American company holds the rights for the Explora. They subcontract to SA manufacturer. Multichoise purchases decoders from the American Company (CommsScope)
 

Ice2Cool

Expert Member
Joined
Feb 22, 2009
Messages
1,508
The one in Durban also pretty much also closed.
It didn't close. They used to produce the Explora at Altech UEC in Durban. Altech decided to compete and came out with a competing device called the Altech Node (you may remember the adverts on TV). The product was a huge failure and the company that awards the Explora contract moved its manufacturing to Vektronix (now Yekani). Altech UEC then started manufacturing Panasonic TV's but the volumes were not high enough to save them. Altech UEC struggled thereafter and was eventually sold to Skyworth. Skyworth is a Chinese company that manufacturers their own products such as Media Players, STB's and TV's. You will see many of their products on our shelves.
 

Gary Waterworth

Expert Member
Joined
Jan 31, 2005
Messages
1,028
To be honest the bulk of the factory workers would be relatively unskilled. They'll be doing things like inserting components and a small amount of hand soldering and mechanical assembly (inserting a pcb into the housing etc). The skilled operators would be the machine operators - but since they're running the same product day in and day out they would be relatively "unskilled"because all they would be doing is loading components onto the machines. Yekani chose one supplier to supply all equipment in their factory (Panasonic) even though a lot of the equipment was not Panasonic. The nominated supplier then purchased equipment from other suppliers to complete the factories requirements. This same supplier spent a year and a half in these premises essentially training and running the equipment. From what I understand Yekani never really became self sufficient. They also hired top staff from Altech UEC to manage the operations of the business. Even the testing and programming of the units is relatively automated. Plug in, press button, wait and see result. If fail, hand over to a technician. If pass, next and carry on.

Also remember, Yekani was previously Vektronix, a well established business - so they already had trained staff available. I don't really believe much employment was created thereafter.

I think what's more upsetting is that the government invested so much without understanding the ramifications to the rest of the industry. Given how much capacity Yekani had, technically they could have taken on almost all of the countries work at huge detriment to the existing businesses. So its another example of the government not doing its job - and its a reminder of the Samsung factory in Dube. Existing manufacturers were producing the Samsung tv's prior to Samsung deciding to open up shop in Dube. Many businesses closed down and a lot of people lost their jobs all so a foreign company can set up shop, use the same unskilled labour but bring in their own highly paid managers and supervisors and overall the government would give tax relief to this company by being in an IDZ and receive less tax revenue as a result. Just sounds idiotic to me.

Some valid points , esp on the skills requirement
But if you need anyone with some skills , being in East London is just going to make it harder just from a availability pov

Going from 2 factory lines to 10 and not being able to keep them busy just sounds like a fubar business case
 

dualmeister

Honorary Master
Joined
Oct 15, 2005
Messages
25,123
It didn't close. They used to produce the Explora at Altech UEC in Durban. Altech decided to compete and came out with a competing device called the Altech Node (you may remember the adverts on TV). The product was a huge failure and the company that awards the Explora contract moved its manufacturing to Vektronix (now Yekani). Altech UEC then started manufacturing Panasonic TV's but the volumes were not high enough to save them. Altech UEC struggled thereafter and was eventually sold to Skyworth. Skyworth is a Chinese company that manufacturers their own products such as Media Players, STB's and TV's. You will see many of their products on our shelves.
Cool :thumbsup:
But, there is also a manufacturer in Gauteng making decoders as well?
 
Top