Mara Group to open R1.5bn smartphone factory in SA

South Africa’s first fully fledged smartphone factory is to open at Dube TradePort Special Economic Zone (SEZ) north of Durban, as pan-African investment conglomerate Mara Group proceeds with its plans to invest R1.5 billion into the project.

The group’s decision to locate the high-tech factory at Dube TradePort was revealed by Sihle Zikalala, KwaZulu-Natal (KZN) MEC for economic development and tourism in his address during the State of the Nation (Sona) debate in Parliament in Cape Town on February 13.

Zikalala, noting that the group pledged the investment during President Cyril Ramaphosa’s investment summit in October, said it had signed a lease agreement and was “proceeding with the implementation of this investment”, which is anticipated to create some 500 jobs.

“KZN came to the Presidential Investment Summit last year with its investment booklet for potential investors,” he said. “The booklet contains a total of 25 bankable projects covering a wide range of sectors including agro-processing, film and media, manufacturing, logistics, medical, property development and tourism. [The] investment value is estimated at $19.1 billion.”

Lease signed

Mara Group boss Ashish Thakkar and Dube TradePort CEO Hamish Erskine both confirmed to Moneyweb on Friday that a lease had been signed for the new ‘Maraphone’ factory to be based at the SEZ, which surrounds King Shaka International Airport.

Thakkar, the Ugandan-born self-made billionaire behind the Mara Group, declined to comment at first, saying he is in Europe on business. However, he later confirmed via text: “Yes, the plant is happening and is on track. It is at DTP [Dube TradePort].”

It is understood the plant will be in operation later this year. Mara Group also has plans for a smartphone plant in Rwanda, which is anticipated to come online ahead of the one in SA, which will make it Africa’s first fully-fledged smartphone factory.

The plan to manufacture smartphones in Africa is backed by the African Development Bank (AfDB). During the Africa Investment Forum hosted by the bank in Johannesburg in November, Thakkar was joined by AfDB president Akinwumi Adesina in announcing more details on the Maraphone.

According to a report on the bank’s website, the Maraphone will be “the first made-in-Africa, full-scale smartphone”. It added: “The initial target market for the phones would be first-time African smartphone users, while the first manufacturing plants are to be located in Rwanda and South Africa.”

Affordable smartphones made in Africa

Thakkar said at the AfDB forum: “This project will show the potential and ability that Africa can produce high quality and affordable smartphones in Africa, by Africans, for Africans and for the rest of the world. We are extremely grateful for the African Development Bank’s push in this sector.”

The exact financial value of the AfDB’s support has not been revealed.

Erskine says a site has been identified within the existing first phase of the TradeZone at the SEZ.

“Securing Mara Group’s smartphone factory is a major deal for us, but we can’t share much more information until the facility is launched later this year,” he adds. “We have already attracted investments worth R3.2 billion into the entire Dube TradePort SEZ, with the majority of investment going into the manufacturing-focused TradeZone.”

Other investors in the first phase include South Korea’s Samsung (LCD TVs), HBM-SA Health (condoms), Chinese optic cable manufacturer Yangtze Optics Africa Cables, Indian automaker Mahindra’s new semi-knockdown assembly plant, gearbox manufacturer Rossi SA, laundry line manufacturer Retractaline, polypropylene bags maker Tufbag SA, and bearing manufacturer Amsted Reelin.

‘Airport city’ to follow

Phase One of the TradeZone is virtually full, and work on a new 45 hectare site known as TradeZone 2 has commenced. “We are targeting electronics and pharmaceutical investors for this site,” says Erskine. “It is part of our overall plan to lure R18 billion worth of investment over the next five years into Dube TradePort.”

Erskine adds that since opening in 2010, Dube TradePort has almost doubled its landholding around the airport – to around 3 950 hectares. It has purchased adjacent land from local farmers and landowners, including 534ha from JSE-listed sugar and property group Tongaat Hulett.

Its future plans include a joint venture with Tongaat Hulett on Phase 3 of its TradeZone on land adjacent to the Watson Highway, near Tongaat Hulett’s headquarters.

Tongaat Hulett Developments MD Michael Deighton says Dube TradePort is doing a “fantastic job” in not only attracting investment, but in its master-planning around developing an “aerotropolis” or ‘airport city’.

“As a major landowner around Dube TradePort and on KZN’s North Coast, Tongaat Hulett sees itself as a partner to collaborate with them in realising the development of an aerotropolis,” he says. “We see an opportunity for considerable formal business collaboration, as it is more productive than just selling land.”

Brought to you by Moneyweb

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