Manufacturer moves plant to China over forex, other challenges
A telecommunication and agritech services provider, Tingo International, which hitherto produced Tingo-branded phones in the country, yesterday, disclosed that it has relocated to China after shutting down its manufacturing plants in Nigeria.
The company said it has struck a deal with UGC China to have its Tingo-branded devices temporarily produced in the Asian country. Tingo International Group CEO, Dozy Mmobuosi, said in a release that the deal was made pending the acquisition of Yekani Manufacturing, a South African-based manufacturing company that indicated an interest in acquiring the brand earlier this year.
Mmobuosi disclosed that the electricity and foreign exchange crisis remain key challenges affecting business operations in the country and that the company could only return if the problems are addressed.
Tingo’s partnership would enable the company to meet its obligations, Mmobuosi noted. He added that despite being a temporary measure, the manufacturing deal would allow Tingo to ship up to 9.4 million devices to Nigeria by January 2021.
Expressing confidence about the South African manufacturing company, Mmobuosi said the acquisition is close to its final stage and will ensure that the Tingo-branded devices are manufactured in Africa.
“We should be able to finalise the deal in a couple of months,” he affirms. Mmobuosi revealed that Tingo International had sold over 21million mobile phones to farmers and other players in the Nigerian agricultural value chain within the last decade. Interestingly, most of the devices were assembled in Tingo manufacturing plants located in Nigeria.
Until October 2018, Tingo International owned and operated two mobile phone manufacturing plants in Nigeria before shutting them down in 2018. The shutdown was credited to foreign exchange gaps as well as the high cost of running the plants.
“We needed to be smart about it, so we shut them down and continued to work with our partners in China,” Mmobuosi said. When asked if Tingo International would consider setting up an assembly plant in Nigeria again, the founder of Tingo International said the company would have to provide a cheaper and more sustainable source of energy while paying attention to foreign exchange.
Mmobuosi further revealed that the acquisition of the South African-based Yekani Manufacturing would make business sense for Tingo International. It is also believed that assembling Tingo-branded devices in South Africa would open up new market opportunities for the company beyond its current West African markets.