Egypt, South Africa get Samsung manufacturing plants ahead of Nigeria
CITING economies of scale, improved infrastructure and tax reliefs, among others, Samsung Electronics has sited its first two African manufacturing plants in South Africa and Egypt ahead of Nigeria.
Though, Samsung has not ruled out the possibility of a manufacturing plant in Nigeria, the firm however, disclosed that Egypt’s plant would be serving Nigeria and other West African countries, while the South African plant would cater for the region and part of East Africa.
The firm, disclosed this during an interaction with the media at the just concluded Samsung Africa Forum in Monaco on Wednessday.
Samsung Regional Product Manager, Corrie Labuschange, who admitted that Nigeria’s market is very strategic to the South Korean firm, said hopefully in the future, a plant can be located in the country because the firm has the capacity.
“Nigeria is a strategic market to Samsung and would remain so, but because of larger economies of scale, well developed infrastructure network and tax reliefs, we had to start with South Africa and Egypt”, he stated.
He however, disclosed that the firm does some manufacturing in Nigeria, “though not Samsung owned plant, but a kind of knock down assembly business with some partners.”
Giving more insight into Samsung’s operations in Nigeria, Head of Corporate Marketing, Koye Sowemimo, disclosed that the South Korean firm already has an engineering academy in Nigeria, which is operated in partnership with the Lagos State government.
He also disclosed that the firm in April 2015, launched its first digital village in Oban, Cross Rivers state, providing innovative healthcare and education services to community members.
While the firm said it will use the engineering academies, which are also in South Africa and Kenya to churn out 1000 engineers yearly, Sowemimo said the target in Nigeria was to have 100 graduate engineers per academic year from the academy. He stressed that as part of follow up, Samsung will after the process, employ some of the engineers and also provide other forms of opportunities for others.
The firm, which currently has 39 manufacturing plants spread across the globe, explained that it’s target was to empower 84,000 young people with necessary ICT skills from 2013 to 2019, across the globe.
Furthermore, the firm said the engineering academies are expected to fast-track the entry of African youths into the electronics job market and thereby reduce the shortage of scarce skills in the IT industry.
Chief Executive Officer and President, Samsung Africa, Yoo Young Kim, said the forum was packaged yearly to give African consumers more choice and new products, stressing that the firm also uses the gathering to unite and strengthen the region’s market.
Young Kim, who gave this year’s theme as: ‘One Beat, Rise Above’, said Samsung was very keen on meeting the diverse needs of people in Africa with technology so that the continent can rise above the present level.
The firm, which claimed to contribute 29 per cent to South Korea’s Gross Domestic Product, disclosed that it plans to spend about $490 million in social responsibilities activities across its markets in 2016.
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52 Comments
Nigeria should increase the tariffs on these products coming into Nigeria.
It time to leverage the huge market opportunities available in Nigeria.
You think Samsung would care? Nigerians sometimes overestimate how important Nigeria is. There is no more petro-dollars. Without that, nobody gives a hoot about Nigeria.
You have no idea about the potentials of Nigerian population.
Population of illiterates that cannot even manufacture a simple bicycle spoke. A huge population does not a good economy make.
IF THEY DONT CARE , WHY ARE THEY TARGETING NIGERIAN MARKET, WHY ARE THEY TARGETING WEST AFRICA? SAMSUNG PRODUCTS WILL BE BAN FROM NIGERIA MARKET AND THEY CAN GO AND SELL THEIR PRODUCT IN SYRIA OR IRAN.
They (Samsung) already have. Look at where they are sighting the new factories in Africa (Egypt and South Africa) to see that they don’t give a ‘darm’ about the self-made giant of Africa.
Buhari and his FEC just continues to lie to Nigerians about the value of the useless travels he seems to embark on every other day. Why would the largest economy in Africa be shunned by Samsung irrespective of the huge market? Buhari. No body in the world believes the sham called government in Nigeria.
With the Naira crashing every day and the government pretending that it is not and still giving investors N197 to $1. Who would want to be scammed in broad day light like that. Even Nigerians abroad have stopped remitting money home. They now prefer to carry the Dollar with them physically when they are traveling than the government exchanging it for them at the fraudulent rate of N197 to $1.
it all comes to one thing, where there is light, there is life. There is no light in Nigeria and nor-matter how profit the market in Nigeria is, companies need lights to operate and not generators.
And whereas, Nigeria is where the market is. Meaning that the products’ destination is Nigeria at extra cost and provision of employment for Egypt and SA.
For each $ they invest, the government will only make half of the value available for them. ($1 = N197), instead of the real value of their Dollar which is N387.00 to $1 as at 18/02/2016. That is what the ruling cabal has failed to understand. No investor will even think of putting their hard earned money in Nigeria right now unless they are money doublers. That is how toxic the investment climate is in Nigeria right now.
@Fuzio your comments makes no sense. I hope the federal government impose heavy import tariffs on Samsung.
I do not work for Samsung neither do I own any stocks in that company. Whatever your government does to Samsung will have zero effect on me. But what is keeping Samsung away from Nigeria is also keeping thousands of other companies away from the country. A huge population of illiterates will not be enough incentive to lure investors.
@Fuzio, A Chinese phone maker is currently manufacturing phones in Osun State, well assembled from parts. Nigeria is getting more FDI than South Africa. Your comments makes no sense. This is bad press for Samsung. Nigerians will boycott Samsung like flies. The Nigerian government should impose a 40 percent import duty on Samsung products.
You think Samsung would care about your boycott? Don’t overestimate how important your country where an average person makes less than $1 (according to the World Bank and IMF) a day is. Samsung is a private company driven by the motive to make money. Now tell the whole world how much money you can make from people that earn less than $1 a day.
Nigeria is very important. Nigeria population is projected to reach 250 million soon. The biggest economy in Africa. Only a fool will think Nigeria is not important.
Continue to proliferate like rabbits. What counts is the quality of life and not the number of children. With a population of 250 million, where will they live? Who will feed them and what arrangements are you making to get them educated and gainfully employed? A large population of illiterates and unemployed adds no value to the global economy.
MTN(South Africa owned telecom company) biggest market is Nigeria not South Africa. I guess $1 a day goes a long way. You are a moron that read and believe everything that is written by the western press.
forget that bigbang guy please. empty vessels make the loudest noise
stop embarrassing yourself
Heavy import duty on Samsung products.
FULL BAN WILL BE BETTER.
The problem with Nigerians is we don’t want to hear the
truth. I have said it in several forum that Nigeria is not ready to be a
manufacturing center. Our leaders pay lip service to encouraging manufacturing
but what they are really doing is instituting protectionist policy for their
cronies.
A country without regular power supply and necessary infrastructure cannot be
selected ahead of those which have the basic infrastructure in place which is
why Egypt and South Africa were chosen by Samsung to host their manufacturing plants.
All the apologists of the automotive manufacturing industry take note. All that
was done by the previous government automotive policy was protecting the
business interest of Stallion group and other cronies and not in the interest
of Nigeria.
If a major player in the appliance industry like Samsung which has far less
power requirements than automotive manufacturing cannot site a manufacturing
plant in Nigeria their largest consumer market then who are the automotive
manufacturers claiming to set up manufacturing plants in Nigeria deceiving? The
so called manufacturers are guaranteed
to continue to bleed Nigerians dry with the 70% import duty on fully
built imported vehicles new or used. It is time to do away from such arcane
policy.
Mexico became the largest automotive manufacturing country
in the Western Hemisphere after the United States producing more than 1,000,000
vehicles a year for export not be instituting protectionist policy and imposing
prohibitive duties on import. They did it by creating industrial clusters and
providing them with necessary infrastructure like power, water, roads, and sea ports
and removing all man made impediments
you find at Nigerian ports.
It is time we take of heads out of the sand and start telling ourselves the
truth about the situation of things in Nigeria.
Cheers,
Alade Manuel
I dont agree. Generally Nigeria is a bad operating t environment but not if you locate in industrial layouts or free zones which guarantee factories steady power. However the decision to establish in a country takes lots of hand holding and soft skills diplomacy which Nigeria sorely lacks.
As I mentioned earlier having industrial clusters with infrastructure is key. But most of the industrial clusters and free trade zones in Nigeria are lagging behind including LFTZ.
Definitely lack of soft skills diplomacy is part of the truth we don’t tell our-selves. Our leaders make the wrong assumption that talking about Nigeria huge population number is enough to bring investors. Which is a fallacy. Investors would only invest in a country that has adequate infrastructure and a condusive investment environment even with some population size e.g. Estonia
Let me enjoy my good tecno phone jare.
Low investment driven economy. No electricity, multiple taxation, no manufacturing infrastructure, etc. Why would Samsung and any other foreign investor invest in this high cost manufacturing? If Nigerian government intents to encourage and invest in the youth, it must fulfill its basic social promises. Otherwise, the economy continues to be foreign dominated, diminishing local productive power.
Who will want the government to give them N197 to $1 when inside Nigeria on the ground the real equivalent of $1 is N400. No sane investor will even think twice about avoiding that kind of country. That is the pseudo economy we are operating in Nigeria folks. Worse is yet to come. They think that they are putting Igbos out of business. They forgot that there is no way you can put Igbos out of business without putting Nigeria out business.
I thought if Naira is low investors will come to Nigeria to set up export business in the county. Too many Naira are chasing few dollars, it is simple law of supply and demand. Government can not manufacture for sale because oil is main source of Nigeria earning. As long as rich nigerians are sourcing to send to their families in USA and to pay for their children school fee dollars will remain in high demand and nothing can do about it. My brother predicted last year summer that $1=400 naira by April and I almost fight him in Toronto. Nigeria can not have both way.
NO. The government is maintaining two tiers of Naira exchange. One official, the other parallel. Let me explain to you how it hurts investors. Say you want to invest $1million in Nigeria. The Nigerian government will exchange that $1 million at the official rate of N197 for you. So you will get N197 million to invest. But when you get into Nigeria to start the investment you discover that the true value of the Naira is N400 to $1 and not N197 to $1. You have to buy land, pay workers and do other things that cost money in Nigeria. All these expenses have been effected by the true value of the Naira which is N400 to $1. So now you have already lost a huge chunk of your investment money even before setting foot on Nigerian soil. That is what is driving investors away. Besides if they brave it and set up their factory, they will not be able to remit their profit (which is the main reason why they are in Nigeria) home because that is not a priority of the Nigerian government. So they have to go to the parallel market and buy Dollar at N400 to $1.
On top of that, there is no electricity, running water, roads and security in the country. Who wants to mess with that kind of country?
Egypt also has a two tier forex regime and forex scarcity issues and a city that is as bad as Lagos in traffic congestion. South Africa has xenophobic people and lots of state corruption. Nigeria which accounts for around 30% of Samsungs sales in Africa did not do a good job of selling itself. Samsung could have established at the Lekki Free Zone and gotten steady power, water and tax free business environment like many of the companies that established there.
I THINK THEY ARE PLAINLY RACIST. FULL STOP.
That is a tired old line. Racist against who? Your country, Nigeria simply lacks the infrastructure to support a Samsung factory that guzzles electricity in Megawatts.
You forgot the elephant in the room. Lack of electricity. Samsung factories are electricity guzzlers. They don’t wand to pour a huge chunk of their investment money into building infrastructure (generating electricity) that the Nigerian government ought to have provided and which has nothing to do with their core business.
Agbara layout, lekki free trade zone all have steady power. I think there is something called the nuisance factor which samsung is avoiding by not ramping up its operation. Things like Lagos horrible traffic, the logistics of managing the factory, inventory, sourcing forex, etc. They have a thin sales office in Nigeria like many multinationals where they sell to Nigerian companies who suffer at the logistical end.
Insecurity is the primary fear. Fear of political instability and war, threats of seccession, corruption, multiple taxation, bueacracy in the public service. Take these away and there is no better country in Africa than Nigeria.
AND INVESTMENT IN WAR RAVAGED EGYPT AND POLITICAL TUMULTUOUS IS A WISE DECISION EH? AND WHAT STOPPED THEM FROM GOING TO GHANA AND SET UP MANUFACTURING PLANT THEIR? . NIGERIA SHOULD GO AHEAD AND BAN SAMSUNG PRODUCT INTO NIGERIA MARKETS AND INVITE THEIR BIGGEST RIVAL.
For some reason, they believe they can get better returns on their investment from Egypt compared to Nigeria. It is a profit motivated private company. It is all about returns on investments. Nothing more. They are not there to develop your country. If your country develops while they are making money, all the better.
Do we truely need investors so desperately. There are many money bags in Nigeria stinking with looted funds who only needed to invest locally. Also millions of Nigerians who are wanna be Europeans in their taste.
Who will grow your economy when you wont?
IGBOS ARE NOT NIGERIAN THEY ARE BIAFRAN, THEY SHOULD CONCENTRATE ON BUILDING THEIR CURRENCY AND STOP ROUND-TRIPPING OF NAIRA. WHAT IS THEIR CURRENCY CALLED BY THE WAY? I CAN SUGGEST A NAME “”BIAFRA FOOLISHNESS””
You once again display crass ignorance of what is happening in Nigeria. The BDC and the black market operators are more than 99% Hausa/Fulani. That is why no one is taking them on. It is a protected sector. In the old days they use to cluster around Bristol Hotel in Marina. Even when Buhari made possession of foreign currency illegal in 1983, no law enforcement dared enforce that law around that hotel. You will continue to blame Igbos even when you cut yourself while shaving.
Does our law enforcement agencies enforce any law when money is to be made. There is nothing ethnic about it.
Does it occur to you that you can buy more in Nigeria with your dollars than you could before? In reality our economy is at risk of a foreign takeover.
Igbo’s are mostly importers, not manufacturers, that’s why they are worse hit.
Have you heard of the word ‘Igbo made’? It did not emerge out of thin air. Go to Aba, Onitsha, Nnewi and others and you see Igbos engaged in large scale manufacturing with no expatriate assistance. Some of their products even find their way to other African countries where they are not encumbered by tribal considerations.
What is your point?
Igbos are the only ethnic group in Nigeria that has the culture of making something.
Then you must be the greatest ethnicity in Nigeria. Then why try to run away? Its a failure and a coward at that, that runs home in the face of a challenge, like a dog with its tails tucked between its legs.
Why cant nigerian digital multinationals manufacture such needed products by franchise systems etc via vertical integration?
If I have my way, I would go get SONY (talk to JAPAN to bring their plants to Nigeria) and ban SAMSUNG products in Nigeria. Any product from SAMSUNG will have to be destroyed. That way no one takes Nigeria for granted.
This is an open letter to President Buhari. We have the population, we have the market and must use it to get the respect that duly belongs to us.
I THINK I AGREE WITH YOU.
NIGERIA SHOULD GO AHEAD AND BAN EXPORTIONG OF ALL SAMSUNG PRODUCTS INTO NIGERIA MARKET AND ALLOW THEIR BIGGEST COMPETITORS TO COME IN.
VODACOM WAS GIVING THE SAME SILLY EXCUSE OF A REASON IN THE 1990″S UNTIL MTN CAME IN. HIT THEM HARD ON THE ECONOMY OF SCALE TOO.
I think Samsung setting up three factories in Africa can not be considered an overkill… Lets keep our finger crossed… I believe Buhari’s Economic team surely would not be taking this development lightly…
We will review and take appropriate action.