OEM will open television, laptop and printer assembly plant in East Africa by the end of the year, with Nairobi being the hub of its operations.
Africa Review reports that Samsung will open a plant in Nairobi, Kenya that will employ around 900 people directly and over 1,000 in its supply and marketing chains to expand business in the East African region; with a further plant planned to be built in Addis Ababa to serve the market in Ethiopia.
The plant will be used to assemble Samsung televisions, laptops and printers and is the latest in a chain of Samsung plants established in Africa recently, including locations in South Africa, Sudan and Senegal. It will mean that rather than shipping finished products to Kenya, Samsung will ship in assembly kits to the new facility, “increasing the efficiency of its supply chain and possibly cutting the cost of its products”.
According to Robert Ngeru, COO in East Africa for Samsung, the OEM is negotiating for tax incentives with the Ministry of Trade and Kenya Revenue Authority (KRA) which will determine how much the company will invest in the plant.
The aim of the move is to allow Samsung to gain business in the East and Central African market, which consists of 142 million people, and to increase its sales in the region to Sh 170 billion ($2 billion/€1.5 billion) from 2011’s sales figure of $250 million (€192 million).
Ngeru reportedly stated that Samsung’s future growth plan in Africa “is hinged on market segmentation and localisation of products according to the rising needs”. In particular, Ethiopia’s emerging middle class, which has been growing at “eight percent annually in the past five years”, will be targeted by Samsung.
Samsung supplies 16 African countries from its Nairobi headquarters, which was established in 2011, with the addition of the assembly plant expected to strengthen the company’s position in Africa’s rapidly growing market. According to the article, the electronics market in the region is predicted to grow at an average annual rate of 11 percent over the next 10 years
Ngeru added that positioning the plant in Kenya means that Samsung can “take advantage of the comparatively better skills base to build structures for knowledge transfer and get easy access to the regional market”.