R1-billion South African electronics factory shutting down – Here’s what happened

Yekani Manufacturing’s R1-billion electronics factory in East London could soon close its doors for good.

The 28,000 square-metre facility, which forms part of the Yekani Group, was opened by former Minister of Trade and Industry Rob Davies in the city’s Developmental Zone in June 2018.

It produced a number of electronic products, including mobile phones, tablets, laptops, and decoders.

Liquidation processes have now been initiated after Yekani was unable to make payments to Standard Bank for a large loan.

Workers at the factory have not been paid in five months, and the facility did not resume operations this year.

Yekani responds

MyBroadband reached out to Yekani Manufacturing for comment on the state of the company.

Yekani confirmed that it has been placed under provisional liquidation, but that no final liquidation order has been handed down.

“In the event that Yekani is put under final liquidation, approximately 500 direct jobs will be lost,” the company said.

It did not detail the issues which led to the dire situation but claimed it had made “huge efforts” to reach a positive outcome to the financial challenges.

Employee salaries

When asked whether factory workers had received their salaries, Yekani explained that since employees had been on “short time” since August, they had been at their homes and without an income.

“The employees have been claiming for UIF from the Labour Department. Further to this and should Yekani be placed under final liquidation, those employees with valid claims against the company will be able to submit their claims with the liquidators,” Yekani stated.

It claimed that the workers were kept abreast of the pressing problems at the company.

“A week before Christmas break a staff meeting was called where employees were updated on everything including the provisional liquidation status and the CEO explained in detail the challenges the company is facing,” Yekani said.

Yekani CEO Siphiwe Cele apologised to the company’s employees, suppliers and customers for the situation.

“Yekani deeply regrets the impact that this has had on our employees who have fought so hard to make Yekani a success and sincerely apologises for same,” Cele said.

“Further and similarly so, Yekani would like to apologise to our suppliers who have been very understanding, supportive and patient, stuck to our business in good and bad times and are now faced with difficult financial choices of their own and lastly, would like to apologise to our customers who are adversely affected by this,” he added.

Standard Bank

With regards to the money owed to Standard Bank, Yekani said the amount is “far less than R200 million”, but added that since the matter is sub judice, it cannot comment further. This was in reference to reports that the company owed R200 million.

Standard Bank spokesperson Ross Linstrom told MyBroadband that it cannot disclose client details with other parties.

The photos below show the factory after its opening in 2018.

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R1-billion South African electronics factory shutting down – Here’s what happened